The first defendant (‘the company’) owned certain premises and its sole business was the letting of the premises. Through a director’s resolution, the premises were sold off for RM25 million. The plaintiff, a minority shareholder, wanted to dispose of its shares and subsequently, attempted to sell the shares to the second defendant, the majority shareholder. However, the offer to sell was not accepted. The plaintiff proceeded to file originating summons under s. 181 of the Companies Act 1965 against the company and the second defendant for an order that the shares be purchased by the second defendant or the company. The plaintiff further sought that in the event the company purchases the shares, there would be a reduction of capital of the company or the company would be wound up. It was the plaintiff’s contention that it became the shareholder of the company as it had the intention of being involved in the letting of premises but since the premises had been sold off, there was no longer such business. The plaintiff further submitted that to be forced to continue with any other business that the company might venture into, would be an act of oppression as well as in disregard of the plaintiff’s interest. Against the second defendant, the plaintiff’s complaints were that (i) as a majority shareholder, the second defendant had failed to indicate what were the businesses being contemplated to be ventured into by the company; and (ii) the second defendant had thwarted even the attempt to sell the plaintiff’s shares to persons or other companies other than the existing shareholders and immediate family of persons registered as shareholders.
Held:
(1) An affidavit sworn and affirmed by a director and shareholder of the second defendant showed that the second defendant had acted in disregard of the plaintiff’s interest and had acted in an oppressive manner against the plaintiff. In the face of this clear admission, it would be wrong for the court to find that the plaintiff’s interest had not been disregarded and that there were no actions which were oppressive against the plaintiff. (paras 23 & 25)
(2) The directors of the second defendants themselves were in disagreement and the episodes of disagreements showed that they were not minor disagreements but were serious in nature that could affect the operation of the company and had in any event affected the interest of the plaintiff as a minority shareholder of the company. The incidents were not isolated cases that would not materially affect the operation of the company but taken as a whole, the instances of serious disputes and disagreements among the directors of the second defendant could seriously hamper the smooth-running of the company and in any event, the plaintiff should not be burdened and be caught unnecessarily in these disputes. (paras 36 & 37)
(3) In an extraordinary general meeting of the company, the plaintiff had enquired what business venture would the company undertake in the future after the premises for letting had been disposed of. This meeting was held more than one year since the shareholder’s resolution to sell the premises. Yet, in this meeting, the directors representing the second defendant did not answer the question what was the business which the company wanted to be involved in but merely said that there were many businesses the company could venture into as stated in the clauses of the company. (paras 40, 41 & 42)
(4) The decision of the plaintiff was reasonable and fair in wanting to leave the company as the company itself was no longer involved in any business. It was not reasonable for the company to let the plaintiff be guessing for so long on the business it wants to be involved in. There was element of oppression for the company to still insist that the plaintiff remain as shareholder when the company itself had not decided on whatever business venture it wants to be involved in. The plaintiff could not be expected to remain as the shareholder of the company indefinitely after the successful disposal of the premises and the company could no longer demand the participation of the plaintiff if it could not itself determine its future direction in terms of business. (paras 45, 46 & 47)
(5) There was, on the balance of probabilities, evidence of oppression suffered by the plaintiff in the hands of the company in the turning down of the request by the plaintiff to sell its entire shares to any person or company other than the existing shareholders and immediate family of persons registered as shareholders. The rejection by the company was evidence of oppression on the part of the company against the plaintiff as it was fully-aware that it was not engaging in any business at that point of time yet it refused the reasonable proposal by the plaintiff to sell its shares. (paras 52 & 54)
(6) The plaintiff, as a substantial shareholder, had every right to reap the rewards of the profitable sale of the premises and exit the company or use that proceeds to venture into other business on its own. The plaintiff was deprived of these opportunities when the company took longer than the reasonable time to decide on its new business. (para 62)
Source: Rahya Trading Sdn Bhd v. Tong Khin Company Sdn Bhd & Anor [2014] 5 CLJ 726. High Court Kuala Lumpur. Abu Bakar Jais JC
==============================
*如果您需要聘请律师处理法律事务，您可以联系我们。
*如果您需要法律咨询(付费)，您可以联系我们。
*我们的律师楼拥有超过15年的执业经验。我们处理民事纠纷 (打官司/法庭诉讼)、商业纠纷、追讨债务、遗产分配、立遗嘱、离婚、抚养权、赡养费、产业分配、领养小孩、拟商业合约、拟买卖合约、银行贷款、法律咨询、法律顾问、等法律事务。全马的案件，我们皆都处理。
*We have more than 15 years of experience in the legal profession. We handle matters such as commercial disputes, civil litigation, debt recovery, probate & letter of administration, will, divorce, children custody, maintenance/alimony, adoption, distribution of matrimonial assets, drafting commercial agreement, drafting sale and purchase agreement, process loan documentations, legal consultation, legal advisory, miscellaneous legal works.
*Wilson Kuek是“法律与你同行 Law & Justice”面子书群组的创办人。“法律与你同行”是马来西亚最大的法律平台。我们每天为无数的平民百姓免费解除各类的法律困扰。
*浏览我们律师楼的法律文章: www.kuekong.com
*浏览我们律师楼的法律文章: www.kuekongklg.com
*订阅我们的YouTube: http://bit.ly/lawnjustice
*加入 我们的“法律与你同行”FB 群组: http://bit.ly/fblawnjustice
*Like 我们的“法律与你同行” FB Page: http://bit.ly/lawnjusticefbpage
*加入我们的网络论坛: www.queco.org
*Kuek, Ong & Associates. Advocates & Solicitors. No.86-1, Jalan Mahagoni 1, Bandar Botanic, 41200 Klang, Selangor Darul Ehsan. Klang Lawyer. 巴生(吧生)律师楼。#Kuek, Ong & Associates #Kuek Ong & Associates #Kuek Ong Associates #郭汪律师事务所 #郭汪律师楼
#Chinese Lawyer in Malaysia #Malaysia Lawyer #Klang Lawyer #KL Lawyer #divorce lawyer #马来西亚华人律师 #懂华文的律师 #懂华语的律师 #巴生律师 #吧生律师 #KL律师 #吉隆坡律师 #民事诉讼律师 #打官司的律师 #打离婚案的律师 #离婚律师
Oppression – Minority shareholder – Company solely involved in business of letting of premises – Premises sold off – Minority shareholder attempted to dispose of and sell shares to majority shareholder – Offer to sell shares not accepted by company – Minority shareholder forced to continue with any other business company might venture into – Whether amounted to minority oppression – Whether disregard of minor shareholder’s interest – Companies Act 1965 s. 181