Jamhirah Ali JC:

GROUNDS OF JUDGEMENT

INTRODUCTION

[1]The Plaintiff, a member of the 5^th Defendant, commenced an action for minority oppression pursuant to Section 346Companies Act 2016^st, 2^nd, 3^rd and 4^th Defendants purchase all the Plaintiffs shares in the 5^th Defendant or that the 5^th Defendant be wound up.

[2]The issue before this Court is whether there was oppression of minority shareholders as complained of by the Plaintiff and if the answer to this issue is in the affirmative, then this Court is to decide what are the suitable remedies.

BRIEF FACTS

[3]Sometime in 1984, the 1^st and 2^nd Defendants incorporated the 5^th Defendant, a private limited company. Pursuant to the Share Sale Agreement (SSA) dated 15.08.2018, the Plaintiff agreed to buy the 1^st Defendant’s shares in the 5^th Defendant, which represented 14.28%, and subsequently, the Plaintiff acquired another 10.72% shares in the 5^th Defendant and increased his shareholding to a total of 25%.

[4]As such, the Plaintiff is a minority shareholder of the 5^th Defendant holding 500,000 shares representing 25% of the total issued and paid-up share capital of RM2,000,000.00. While the 1^st, 2^nd and 4^th Defendants are the majority shareholders holding 1 ,500,000 shares representing 75% of the total issued and paid-up share capital of the 5^th Defendant.

[5]The 1^st to the 4^th Defendants are also the Directors of the 5^th Defendant. The Plaintiff was also appointed as the Director of the 5^th Defendant on 03.10.2018 and subsequently on 01.03.2019 he was appointed as the Managing Director on a fixed-term basis.

[6]The Plaintiff was removed as the Managing Director and Director of the 5^th Defendant on 10.05.2021 and 25.05.2021 respectively. His removal as Director triggered the commencement of this action under Section 346CA

[7]The Plaintiff has raised six (6) oppressive acts in his application, which are as follows:-

a.the issuance and allotment of share capital resulting in dilution of the Plaintiff’s shares in the 5^th Defendant;

b.the 5^th Defendant’s resolution to pay the 1^st Defendant the sum of RM2,000,000.00;

c.the appointment of the 4^th Defendant as a Managing Director of the 5^th Defendant and the forgery and/or the wrongful alterations of invoices by the 4^th Defendant;

d.the removal of the Plaintiff as a Director of the 5^th Defendant;

e.failure to acquire the Plaintiff’s shares by the majority shareholders; and

f.continued disposal of the 102 vehicles/departure from the New Business Model.

[8]In light of the abovementioned complaints, the Plaintiff is claiming, inter alia, for the 1^st to the 4^th Defendants to purchase the Plaintiffs shares in the 5^th Defendant based on the conditions as set out by the Plaintiff in prayer 2 of the Originating Summons. The Plaintiff also claimed for general and exemplary damages to be awarded to him against the 1^st to the 4^th Defendants.

ISSUES FOR DETERMINATION

[9]The main issue for this Court to decide is whether the acts of oppression complained of by the Plaintiff entitle him to relief under Section 346CA

THE LAW

[10]Section 346CARe Kong Thai Sawmill (Miri) Sdn. Bhd; Kong Thai Sawmill (Miri) Sdn. Bhd. & Ors v Ling Beng Sung

“...for the case to be brought within S. 181 (1) (a)Companies Act 1965, at all, the complaint must identify and prove “oppression” or “disregard”. The mere fact that one or more of those managing the company possessed a majority of the voting power and, in reliance upon the power, made policy or executive decisions, with which the complainant does not agree, was not enough. Those who take interest in companies limited by shares have accepted the maioritY rule. It is only when maiority rule passes over into a rule oppressive of the minority, or in disreqard of their interests that section can be invoked. As was said in a decision upon the United Kingdom section there must be a visible departure from the standards of fair dealing and a violation of the conditions of fair play which a shareholder is entitled to expect before a case of oppressio