Leonard David Shim J:

GROUNDS OF DECISION

Introduction

[1]This is an action by the Plaintiff against the Defendants for oppression by the majority shareholders (1st to 5th Defendants) in SMART/6th Defendant of minority shareholder/Plaintiff (Suit 65/8) which is jointly tried and heard together with a derivative action (Suit 45/7) premised on fraud, conspiracy and breach of directors’ fiduciary and statutory duties involving the same facts and parties. The Plaintiff/Liu Tung Ming is a Taiwanese citizen and primarily resides in or conducts business in Taiwan.

[2]Except for the 5th Defendant, the other Defendants opposed both actions mainly on the grounds that the shares swap and assets sale executed when the Plaintiff was allegedly incommunicado was a genuine group corporate restructuring and streamlining exercise made to, inter alia, avoid the risks of claims by Plaintiff’s creditors, other risks or liabilities which are inherent to the operations of SMART, risk of being closed down by the Tourism Ministry and similar share swap offer was made to Ultramontaine (a nominee company of Liu Tung Ming/Plaintiff incorporated in Hong Kong) but not taken up. The Defendants also contend that the Plaintiff lacks locus standi to institute both Suits and the same are barred by limitation and under the doctrine of laches.

[3]The 5th Defendant/Liang disputed liability and contended that he is a minority shareholder and has no control over the majority headed by the 1st Defendant/Robert. Liang further contends that prior to the restructuring, he and Orson (whose shares are held by his wife, the 4th Defendant) had suggested to Robert to open a trust account for the Plaintiff’s benefit to hold the Plaintiff’s share of the profits that was diverted from the SMART group of companies to the 9th Defendant/Fadilaju but Robert disagreed with this suggestion and refused to open the trust account.

[4]After the trial of both Suits had concluded, the 2nd Defendant/Lee passed away and was substituted by Lee San Wei, the Executrix of the deceased’s estate pursuant to a Court Order dated 11.6.2025 (Encl. 295).

Brief Factual Background

[5]The Plaintiff, a Taiwanese, was invited by his long-time friend, to invest in a diving resort when he visited Sabah in 1993. His friend is Lo Ming Hoe (“Robert”), the 1st Defendant.

[6]The Plaintiff, believing Robert, agreed to the venture. He placed his investments through a nominee company in Hong Kong, Ultramontane Limited. At the material time, Robert and his then wife, Elaine resides in Hong Kong and they permitted their residential address in Hong Kong to be used as Ultramontane’s registered address.

[7]His fellow shareholders in SMART were eventually–

(a)Robert’s brother, Lo Ming Yong @ Frederick Lo (“Fred”), the 3rd Defendant,

(b)Robert’s sister-in-law, Leong Kui Fui, the 4th Defendant (nominee for Robert’s brother, Lo Ming Liong (“Orson”)),

(c)Lee Boon Biang @ Lee Bon Chung (“Lee”), the 2nd Defendant, and

(d)Liang Sie Shiong, the 5th Defendant (“Liang”).

[8]The Plaintiff never became a director and that was upon Robert’s advice. Robert advised him not to because he was not in the country. Robert assured him that his interest will be looked after by him.

[9]The Plaintiff provided funds to start the company - Sipadan - Mabul Resort (Sabah) Sdn. Bhd (“SMART”). He brought in business. He put in funds when other shareholders were not prepared to.

[10]The Plaintiff took a back seat to manage the financial fallout when the Straits crisis hit Taiwan in 1995/1996. He trusted Robert and the other shareholders to look after his interest.

[11]However, in March 2000, unbeknownst to him, Robert, Fred, Lee, Orson/Leong, and Liang embarked on a “restructuring” exercise which is in reality a fraud on the minority. The Federal Court explained the case of fraud on the minority in Datuk Seri Timor Shah Rafiq v Nautilus Tug & Towage Sdn Bhd & Another appeal

[8] Of course, there may arise some difficulties with the application of these principles such as