JUDGMENT

Ramly Ali J:

[1] The petitioner (who claimed to be a beneficial shareholder of respondent 1) files a petition (encl. 1) against all the respondents under s. 181 of the Companies Act 1965, in that the affairs of respondent 1 were conducted and the powers of the directors were exercised in a manner which is oppressive; and/or in disregard of his interest; and/or which unfairly discriminates against; and/or is otherwise prejudicial to one or more members of the 1st respondent.

[2] The petitioner further contends that the affairs of the 1st respondent should not be conducted in a manner likely to defeat the legitimate expectations of one or more its members. The petitioner contends that it was always intended that all parties would act in utmost goodfaith and that 1st respondent was formed on the basis of personal relationship involving mutual confidence. The petitioner further contends that the nature of the 1st respondent is one in which there is an understanding that all the shareholders would participate in management and share in the profits of the 1st respondent.

[3] The petitioner also contends that 1st respondent acting through the 2nd, 3rd and 4th respondents has breached its obligations imposed by law, equity and under the shareholders agreement.

[4] The respondents filed an application (vide notice of motion in encl. 8) to strike out the petition pursuant to O. 18 r. 19(1)(b), (c) or (d) of the Rules of the High Court 1980; and/or under the inherent jurisdiction of the court; or s. 221(2)(f) of the Companies Act 1965, on the basis that:

(a) the petitioner has no locus standi to present this petition as he is not a registered member of the 1st respondent;

(b) the petitioner is estopped by his conduct in the previous proceedings filed by him (in the Kuala Lumpur Sessions Court) from filing and proceeding with the petition on the basis that he is a shareholder or member of the 1st respondent with the rights of a shareholder/member.

Factual Background

[5] On or about August 1996 the petitioner (who was a partner of a business known as Kontad Interior Decorations) with one Mr. Kew Thin Song ("Kew") and Brunswood Industry Sdn. Bhd. ("BISB") decided to form a joint venture company for the purpose of undertaking and providing marketing and services involved in the business of interior decoration.

[6] A shareholders agreement was drawn up and dated 12 August 1996 between the petitioner and BISB and pursuant to the said agreement the 1st respondent was incorporated. It was at all times believed by BISB that the petitioner was entering into the agreement on behalf of himself and Kew as partners of Kontad Interior Decorations.

[7] It was a term of the agreement and was at all times the intention of the parties that the contribution of capital towards the 1st respondent's issued and paid up capital by the petitioner, Kew and BISB would be as follows:

(a) The petitioner would contribute fixed assets, a factory, plant and machinery, office equipment, motor vehicles, stocks etc. to the 1st respondent ("the assets") valued at RM500,000 and would receive the sum of RM300,000 and 40% equity in the 1st respondent. The value of the 40% equity was pegged at RM200,000. The petitioner would therefore have capitalised his interest in the 1st respondent by transferring the assets worth RM500,000 to the 1st respondent and receiving 40% of the paid up capital of the 1st respondent together with cash of RM300,000 from BISB.

(b) Kew had a separate arrangement with the petitioner that he would receive half of the 40% equity that the petitioner would be allocated in the 1st respondent ie, 20% share in the 1st respondent. It has since transpired that Kew has waived his right to the 20% vis a vis the petitioner.

(c) BISB will capitalise its interest in the 1st respondent by paying the petitioner the RM300,000 for the assets that the petitioner would invest into the 1st respondent, (such payment being made by BISB on the 1st respondent's behalf)