Chong Tony 1. ) Sunsiri Sdn. Bhd. 2. ) Loh Yoke Chai 3. ) Phan Yau Kam 4. ) Loh Poh Yee

Chong Tony 1. ) Sunsiri Sdn. Bhd. 2. ) Loh Yoke Chai 3. ) Phan Yau Kam 4. ) Loh Poh Yee

Disposal of the company's sole asset without prior shareholder approval contravened s.223 CA 2016; that statutory contravention denied the plaintiff's fundamental right to vote and was inherently oppressive; subsequent ratification could not cure the unlawful act; transfer of sale proceeds to the 2nd defendant's personal account evidenced personal benefit and an intention to exclude the plaintiff, establishing oppression under s.346; accordingly the court allowed specific reliefs (prayers 1,3,4,5 and 7) with costs.

Citation
WA-24NCC-312-06/2023 (Mahkamah Tinggi)
Parties
Plaintiff: CHONG TONY; 1st Defendant: SUNSIRI SDN. BHD.; 2nd Defendant: LOH YOKE CHAI; 3rd Defendant: PHAN YAU KAM; 4th Defendant: LOH POH YEE
Court
High Court
Jurisdiction
Malaysia
Judgment Date
27 November 2023
Case Number
WA-24NCC-312-06/2023 (Mahkamah Tinggi)
Procedural Posture
Originating Summons Under Companies Act 2016 S.346 (oppression Petition) / Judgment on Originating Summons (grounds of Judgment Dated 13 March 2024)
Outcome
Plaintiff's petition under s.346 allowed in part; plaintiff established oppression by the 2nd to 4th defendants; costs awarded to plaintiff.
Legal Topics
Oppression, Shareholder Remedies, Breach of Statutory Procedure, Directors' Duties, Ratification
Source Language
Malay/English
Company Law Commercial Law Equity Oppression Shareholder Remedies Breach of Statutory Procedure Directors' Duties Ratification

Case Brief

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Parties

CHONG TONY

Plaintiff

SUNSIRI SDN. BHD.

1st Defendant

LOH YOKE CHAI

2nd Defendant

PHAN YAU KAM

3rd Defendant

LOH POH YEE

4th Defendant

Procedural Posture

Originating Summons Under Companies Act 2016 S.346 (oppression Petition) / Judgment on Originating Summons (grounds of Judgment Dated 13 March 2024)

Legal Issues

  1. 1 Whether disposal of the company's sole asset without shareholder approval constituted oppressive conduct under s.346 CA 2016
  2. 2 Whether contravention of s.223 CA 2016 could be cured by subsequent ratification
  3. 3 Whether transfer of sale proceeds to a director constituted self-dealing and evidence of oppressive conduct

Ratio Decidendi

Disposal of the company's sole asset without prior shareholder approval contravened s.223 CA 2016; that statutory contravention denied the plaintiff's fundamental right to vote and was inherently oppressive; subsequent ratification could not cure the unlawful act; transfer of sale proceeds to the 2nd defendant's personal account evidenced personal benefit and an intention to exclude the plaintiff, establishing oppression under s.346; accordingly the court allowed specific reliefs (prayers 1,3,4,5 and 7) with costs.

Court Disposition

Plaintiff's petition under s.346 allowed in part; plaintiff established oppression by the 2nd to 4th defendants; costs awarded to plaintiff.

Orders

  • Declaration that the 1st Defendant's resolution dated 13.1.2023 is null and void and of no effect
  • Order that the 2nd to 4th Defendants jointly and severally purchase the Plaintiff's 300,000 shares in the 1st Defendant at fair value or in such manner as ordered by the Court