bJUDGMENT

James Foong J:

Introduction

The disputes in this case involve boardroom intrigues, corporate takeovers and commercial wrestles between competing individuals, business rivals and market adventurers. In order to understand the claims, counter-claims and claims to counter-claims of the parties to this suit, it is necessary to begin with the chronology of events that occurred between the early part of January of 1996 till approximately September of that year to a corporation known as Concrete Engineering Products Bhd (CEPCO).

CEPCO is listed on the second board of the Kuala Lumpur Stock Exchange (KLSE). Its founder and substantial shareholder was one Wong Kong Nam (Wong). He held the position of managing director in the company and was aided by a board of directors. The next most senior executive in company was one Mr Ang Yeow Hwa (Ang). He was in charge of production. The core business of CEPCO (hereafter referred to as the "core business") is, and, at all material times was, manufacturing and sales of pre-stressed spun concrete piles and poles in Malaysia. Before the episode began, CEPCO held 25% market share of this business in this country. It closest rival was another corporation, the Industrial Concrete Products Bhd (ICP), which commanded 65% of the market share. The managing director of ICP was one Lim Yong Kiat (Lim).

To control CEPCO, Wong, by himself, his family and nominees, held around 50% of the issued and paid up shares in the company. These included 19% moratorium shares possessed by a private limited company known as Progressive Metal Works Sdn Bhd (PROGRESSIVE) in CEPCO.

In the early part of 1996, a group of corporate takeover adventurers headed by a person known as Low Thean Hock ("Repco Low", as one of the witnesses addressed him as) offered to purchase Wong's controlling interest in CEPCO. The go-in-between for this deal was a person with some experience in finance and corporate takeovers called Tay Way Bok (Tay Way Bok). The payment for Wong's block of shares, this court was told, amounted to a staggering sum of RM120 million, roughly pricing each CEPCO share at approximately RM8.

To complete this deal, Repco Low and associates had to purchase from another substantial shareholder in CEPCO called Dato Fasir Samsuddin (Dato Fasir) some shares in CEPCO. By this sale, dated 19 January 1996, Dato Fasir shareholding in CEPCO was reduced to 12.5% from approximately 20%.

Once these purchases were completed, Repco Low installed one Choo Chin Thye (Choo) as his nominee in CEPCO. Choo, who had legal training (having been called to the Malayan Bar, and joined the corporate sector thereafter) was made a director of CEPCO on or about 22 January 1996 as well as a mandatory signatory to the company's banking instruments.

In a board meeting of CEPCO held on 8 February 1996, and chaired by Choo, two other nominees of Repco Low: Raja Zainal Abidin and Dato' Mustaffa Mohd were made directors of CEPCO. The resolution recorded of this meeting reveals: the resignation of two former directors before Raja Zainal Abidin and Dato' Mustaffa Mohd were accepted; and the relinquishment by Wong of his managing directorship in CEPCO. He however remained as an ordinary director on the board together with two other directors of the former board who did not resign: Tan Sri Amar Stephen Young (Tan Sri Stephen) and Enche Hamidun Masuod (Hamidun).

In March 1996, Choo, through Tay Way Bok, met up with Lim. At this meeting, Choo indicated to Lim that the group whom he represents was the majority shareholders of CEPCO. They have a corporate plan for a reverse takeover of CEPCO by the State Economic Development Corporation of Sabah (SEDC) who would inject into CEPCO a clinker plant. By this process, the core business of CEPCO would no longer fit into the corporate program and should be sold. Since ICP was in this same line of business as CEPCO, Choo proposed to ICP to acquire CEPCO's core business.

Lim was interested in this business proposit