1. Application for interlocutory injunction to restrain an extraordinary general meeting for the removal of directors pending a suit challenging share sale agreements based on fraudulent misrepresentation. (Para 1 , 5 , 6 , 7 , 8 , 9 , 10 )
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2026 MarsdenLR 1204
HIGH COURT MALAYA KUALA LUMPUR
MOHAMAD REDZUAN IDRUS, JC
TEE WEE SIONG & ANOR – Appellant
Versus
MIDIOS SDN BHD & ORS – Respondent
[Originating Summons No: WA-24NCC-253-05/2025]
Petitioner Advocates:Mohd Rizal Bahari Md Noor ,Respondent Advocate: Wong Kar Chun,Edmond Teh,Wong Yi Ying
An interlocutory injunction will not restrain the statutory right of shareholders to convene an EGM and remove directors unless such action destroys the subject matter of pending litigation, as courts generally avoid interfering in the internal management of a company.
Headnote:(A) Companies Act 2016 - Sections 206 and 310 - Removal of directors and convening of meetings - Rules of Court 2012 - Order 29 Rule 1 and Order 92 Rule 4 - Interlocutory injunction - Application to restrain the convening of an Extraordinary General Meeting (EGM) for the removal of directors - Statutory rights of shareholders to convene meetings and remove directors are substantive and not lightly restrained (Paras 20, 25).
(B) Interlocutory Injunction - Principles for grant - Court must consider in sequence: whether there is a bona fide serious question to be tried, where the balance of convenience lies, and whether damages would be an adequate remedy (Para 19).
(C) Administration of Justice - Conduct intended to impede a fair trial or cause the wanton destruction of the subject matter of an action may be restrained as an interference with the due administration of justice, even where the act is not expressly prohibited by an existing injunction (Para 21) - Principle not applicable where the removal of directors does not destroy the substratum of the main action, such as the validity of share sale agreements (Paras 31, 32).
Facts of the case:
Plaintiffs sought an interlocutory injunction to restrain the convening of an EGM for their removal as directors of a public company. A related suit was pending regarding the rescission of share sale agreements on grounds of fraudulent misrepresentation. A previous interim injunction in that related suit had restrained the appointment of new nominee directors but did not address the removal of existing directors. The requisitionists for the proposed EGM held approximately 15.66% of the issued share capital, meeting the statutory threshold to convene a meeting and propose the removal of directors.
Findings of Court:
The court found that while a bona fide serious issue to be tried existed regarding the related suit, the requisitionists were prima facie entitled to exercise their statutory rights under the Companies Act 2016. The previous injunction was narrow in scope and did not prohibit the removal of directors. The removal of the Plaintiffs from the board did not constitute the destruction of the subject matter of the related suit, as the validity of the share sale agreements remained the central issue.
Issues: Whether the Plaintiffs established a serious issue to be tried; whether the requisitionists were entitled to exercise statutory rights to convene an EGM and remove directors; whether the EGM constituted an interference with the administration of justice in the related suit; and where the balance of convenience lay.
Ratio Decidendi: The court will not interfere with the internal management of a company or pre-empt the exercise of bona fide statutory rights of shareholders unless such conduct destroys the substratum of pending litigation. Since the subject matter of the related suit (the validity of share sale agreements) is not destroyed by the removal of directors, the balance of convenience favors the exercise of statutory rights, and damages are an adequate remedy for interim removal from office (Paras 32, 33, 36).
Result: Application dismissed.
Legal Category Hierarchy
Table of Contents
2. Plaintiffs allege the meeting is a veil for a board takeover interfering with justice; Defendants assert statutory rights to convene meetings and remove directors under the Companies Act. (Para 11 , 12 , 13 )
3. The court found statutory shareholder rights are substantive, the existing injunction was narrow, and removing directors does not destroy the subject matter of the related litigation. (Para 23 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 35 , 36 , 37 , 38 )
4. Statutory rights of shareholders to convene meetings and remove directors are not lightly restrained unless such conduct causes the wanton destruction of the subject matter of pending litigation. (Para 20 , 21 , 31 , 32 , 33 )
5. Application for interlocutory injunction dismissed. (Para 39 , 40 )
6. When can the court interfere with the internal management of a company regarding the removal of directors?
Generally, courts do not interfere with internal management or statutory shareholder rights. However, under the Monatech principle, restraint is possible if conduct is intended to impede a fair trial or cause the wanton destruction of the subject matter of an action, rendering a future judgment nugatory. (Para 20 , 21 , 31 , 33 )
7. What is the effect of a narrow interlocutory injunction on subsequent corporate actions?
Injunctive orders are strictly construed. A narrow injunction restraining the appointment of new directors does not automatically extend to the removal of existing directors or prohibit the convening of future general meetings. (Para 29 , 30 )
8. What evidence is required to pierce the corporate veil at an interlocutory stage?
Piercing the corporate veil requires clear and cogent material. Bare assertions of agency or shadow directorship are insufficient to disregard separate legal personalities, especially where affidavit evidence is contested. (Para 26 , 27 )
9. How is the balance of convenience assessed when statutory shareholder rights are at stake?
The balance tilts toward the defendants when an injunction would suspend clear statutory rights of lawful shareholders, whereas the plaintiffs' feared injury is contingent and remediable through the main suit or damages. (Para 35 , 36 )
JUDGMENT
(Enclosure 3 — Application For Interlocutory Injunction)
I. Introduction
[1] This Court is seised of an inter parte application by way of Notice of Application (Enclosure 3) filed by the Plaintiffs, Tee Wee Siong ("P1") and Tee E Va ("P2"), seeking an interlocutory injunction to restrain the Defendants from convening an Extraordinary General Meeting ("EGM") of the 15th Defendant, Eduver Education Berhad, scheduled for 25 May 2025. The sole agenda of the proposed EGM is the removal of the Plaintiffs as directors of the 15th Defendant.
[2] The application is made pursuant to O 29 r 1 and O 92 r 4 of the Rules of Court 2012 and the inherent jurisdiction of this Court.
[3] The principal question for decision is whether the convening of the proposed EGM constitutes such an interference with the due administration of justice in the related suit, WA-22NCC-61- 01/2025 ("Suit 61"), as to warrant this Court overriding the long- established rule against judicial interference in the internal management of a company and the statutory rights of shareholders to convene meetings and remove directors.
[4] Having heard learned counsel for both sides and having carefully considered the cause papers, the affidavit evidence and the authorities cited, this Court has come to the considered view that the application must be dismissed. The reasons follow.
II. Background Facts
[5] The 15th Defendant, Eduver Education Berhad, is a public company carrying on the business of preschool education under the "Eduwis" brand which the 1st Plaintiff and his late wife developed between 1987 and 1994.
[6] By two Share Sale Agreements dated 9 November 2018 and 16 May 2019 ("the SSAs"), the 1st Plaintiff exchanged his shares in the 15th Defendant for shares in the 2nd Defendant, Kedios Berhad. Following the implementation of the SSAs, the 2nd Defendant came to hold approximately 87.78% of the issued share capital of the 15th Defendant. The 2nd Defendant subsequently allocated approximately 13.9% of those shares to its wholly-owned subsidiary, the 1st Defendant, Midios Sdn Bhd.
[7] In early 2025, the 1 st Plaintiff instituted Suit 61 seeking, inter alia, rescission of the SSAs on the grounds of alleged fraudulent misrepresentation and conspiracy.
[8] By notice dated 11 January 2025, the 2nd Defendant requisitioned an EGM to be held on 12 February 2025 to appoint four additional nominee directors. The Plaintiffs successfully obtained an interim injunction in Suit 61 on 7 March 2025 ("the Suit 61 Injunction") restraining the 15th Defendant from giving effect to the resolutions proposed at that EGM. The four-director composition of the Board was thereby preserved.
[9] By notice dated 24 April 2025, a fresh EGM was requisitioned, this time for the express purpose of removing the Plaintiffs as directors of the 15th Defendant. The notice was issued by the 1st Defendant together with the 3rd to 13th Defendants (collectively, "the Requisitionists"), being shareholders said to hold an aggregate of approximately 15.66% of the issued share capital of the 15th Defendant outside the holdings of the 2nd, 14th and 15th Defendants.
[10] By letter dated 5 May 2025, the Plaintiffs' solicitors demanded the unconditional withdrawal of the EGM notice. The demand was rejected by letter dated 7 May 2025. The present application followed on 8 May 2025.
III. The Parties' Submissions
A. The Plaintiffs' Submissions
[11] Learned counsel for the Plaintiffs submitted that the proposed EGM is a thinly-veiled attempt by the 2nd Defendant, acting through its wholly-owned subsidiary the 1st Defendant and its allied shareholders, to achieve indirectly what was prohibited by the Suit 61 Injunction — namely, the takeover of the Board of the 15th Defendant.
[12] It was urged upon this Court that:
a) the 1st Defendant's shareholding in the 15th Defendant derives directly from the very SSAs impugned in Suit 61;
b) the 14th Defendant is the controlling mind of both the 1st and 2nd Defendants
