Winding up of a family company is justified when mutual trust between directors breaks down irretrievably, regardless of existing litigation.

[1] This is a petition by the Petitioner to wind up the Respondent, New Future Capital Sdn Bhd ("NFC") under s 465(1)(h) of the Companies Act 2016 on the 'just and equitable' ground. I have allowed the petition. These are the full reasons for my decision.

Salient Background Facts

[2] The late Tai Chet Siang, the late Datuk Tai E King ("DTEK"), the late Tai Ho Seng and the late Tai Swee Kian are brothers ("Brothers"). The Brothers are the first generation in the Tai family and each of them held shares and directorship in various family companies (collectively as the "Soon Seng Group").

[3] Safety Capital ("Safety Capital") is a family company within the Soon Seng Group. It was formed by the late Tai Chet Siang and DTEK on 23 November 1955 to carry on insurance business. DTEK and the late Tai Chet Siang being the oldest male siblings of the first generation of the Tai family, managed the day-to-day operations of Safety Capital.

[4] Each of the Brothers had at various times incorporated family investment companies to hold their investments in companies within the Soon Seng Group independently of each other. DTEK, with a view of keeping his investments for the benefit of the Ng Pik Lian (his wife) ("NPL") and himself and to pass on the business to the next generation, had involved his children, the Petitioner and TMC by allowing them to hold shares and directorships in the family investment companies. The companies set up by DTEK to hold his family investments are, amongst others, as follows:

(a) NFC;

(b) United Eastern Resources Sdn Bhd ("UER"); and

(c) New Way Capital Sdn Bhd ("NWC").

[5] From 2007 to 2011, DTEK and the late Tai Swee Kian on one side and also Tai Chet Siang family on the other were engaged in litigation over the affairs of Safety Capital. The litigation led to a settlement between both sides which saw Tai Chet Siang's shares being bought out from Safety Capital. After the settlement was effected, and further to an internal restructuring, UER and NFC hold 67.10 and 32.90% equity interest respectively in Safety Capital. This is also the current shareholding structure of Safety Capital.

[6] The Petitioner and TMC formed NFC together on 28 December 2005.

[7] Since then, the directors and shareholders are, and always have been just both the Petitioner and TMC, ie just the brother and sister. Based on all the Forms 49 of NFC, both the Petitioner and TMC remain as the only 2 directors since its inception. There has never been any appointment of an outsider to the board of directors ("BOD") of NFC, a fact which is not denied by TMC.

[8] The present BOD and their respective shareholdings in NFC are as follows:

[9] It cannot be gainsaid that NFC is a family company in the sense that it is being run and controlled by the siblings who are members of the Tai family. The only 2 directors holding the only 2 shares respectively each in NFC are the brother (the Petitioner) and the sister (TMC).

[10] Sometime around 2013, there has been an irreconcilable breakdown in the relations between the Petitioner, DTEK and NPL on the one hand, and TMC on the other.

[11] In particular, the two sides of the Tai family have been heavily involved in litigation comprising a number of legal proceedings regarding the family investment companies.

[12] In 2013, NPL filed a suit in Kuala Lumpur High Court Originating Summons No.: 24NCC-49-02/2013 ("OS 49") against, inter alia, TMC for oppressive conduct with rega