Section 181 of the Companies Act 1965 upholds minority shareholders' rights against oppressive conduct and allows winding-up as a remedy for oppressive acts.

[1] There are four appeals by the appellants against the decision of the Court of Appeal that had affirmed the decision of the High Court. The core issue that became the subject-matter of the appeals was the decision that granted an oppression petition under s 181 of the Companies Act 1965 against the appellants.

Leave To Appeal

[2] Pursuant to s 96(a) of the Courts of Judicature Act 1964, leave to appeal was granted on 15 October 2012, on a single question, which reads:

"Whether the test under s 181 of the Companies Act 1965 as expounded by the Privy Council in Re Kong Thai Sawmill (Miri) Sdn Bhd; Kong Thai Sawmill (Miri) Sdn Bhd & Ors v. Ling Beng Sung, [1978] 2 MLJ 227 should be reconsidered in the light of recent developments in England on the law of oppression namely the passage of s 994 Companies Act 2006 read with O'Neill and Another v. Phillips and Others [1999] 2 BCLC 1 and Re Saul D Harrison & Sons Plc [1995] 1 BCLC 14."

Background Facts

[3] The history of the protracted litigation between the parties started when the respondents presented an oppression petition under s 181 of the Companies Act 1965 , on 8 October 2010 against one Magic Telecom Sdn Bhd and the appellants vide Petition No: D-26NCVC-100-2010. Consequential to that on 30 December 2010 the appellants filed a civil suit against the respondents vide Civil Suit No: 5-NCVC-100-2010. By consent, parties agreed for the oppression petition and the civil suit to be tried together at the High Court.

[4] Magic Telecom Sdn Bhd was the subsidiary company of the 1st respondent (Numix Engineering Sdn Bhd) and the 2nd respondent (Abdul Razak bin Mohd Noor) and the 3rd respondent (Aishah binti Harun) were shareholders and Directors of Numix Engineering Sdn Bhd.

[5] Numix Engineering Sdn Bhd ("Numix") was a vehicle used by Abdul Razak bin Mohd Noor ("Razak") and Aishah binti Harun ("Aishah") to operate an existing telecommunications business referred to as the VSAT Ku Band business, in partnership with Telekom Malaysia since 2008. Numix was a holder of various telecommunication licences known as 'ASP', 'NSP' and 'NFP' licences, since September 2009 and had applied for another licence known as the "Spectrum Approval for 800 MHz" on 15 October 2009. The appellant, Looh Siong Chee ("LSC") came into the picture when Numix was in need of financial assistance. LSC then invested in Magic Telecom Sdn Bhd ("Magic") and on 28 October 2009 the one million shares in Magic were allotted in the following proportions:

[6] In January 2010, LSC entered into the following agreements:

(a) Shareholders Agreement with Magic and Numix dated 19 January 2010 ("SHA");

(b) Memorandum of Undertaking with the respondents dated 19 January 2010 ("MOU"); and

(c) Subscription Agreement with Magic and Jet Allied Sdn Bhd ("Jet Allied"), with the latter being the subscriber of redeemable convertible preference shares ("RCPS") dated 22 January 2010 ("SA").

[7] Based upon the above-said agreements, the respective obligations of the parties are as follows:

LSC

(a) To invest one million ringgit for 35% shares;

(b) To procure Jet Allied to subscribe for five million RCPS;

(c) To secure Spectrum approval of 800 MHz on or before 20 April 2010;

(d) To secure NSP and ASP licences for Magic;

(e) To secure additional investment of fifteen million ringgit RCPS for Magic.

Respondents

Upon full execution of LSC's undertakings, Numix agrees:

(a) To transfer all of its assets and KU Band business within nine months from the date of the SHA to Magic;

(b) To transfer the NFP