1. CHUAH SEONG KEAT (NRIC NO. :- 650228-08-5835) 2. PAU KAA THIAM (NRIC NO.:- 640422-10-7509) 3. THUAN CHEW BOON (NRIC NO.:- 730623-06-5113) 4. LAI YIP POON (NRIC NO.:- 650409-08-5463) 1. DIN TAN YONG CHIA (NRIC NO.:- 930223-14-6551) 2. DIO

IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE FEDERAL TERRITORY OF WILAYAH PERSEKUTUAN (COMMERCIAL DIVISION) ORIGINATING SUMMONS NO.: WA-24NCC-559-12/2020 In the matter of Thai Odyssey Sdn Bhd and its group of companies or companies related thereto And In the matter of the Joint Venture Agreement dated 21.5.2004 And In the matter of the trademark “Thai Odyssey” and its equivalent in Chinese Characters and/or other trademarks or marks related thereto And In the matter of Section 346 of the Companies Act 2016 And In the matter of Orders 7, 11 and 88 of the Rules of Court 2012 BETWEEN 1. CHUAH SEONG KEAT (NRIC NO. :- 650228-08-5835) 2. PAU KAA THIAM (NRIC NO.:- 640422-10-7509) 3. THUAN CHEW BOON (NRIC NO.:- 730623-06-5113) 4. LAI YIP POON (NRIC NO.:- 650409-08-5463) ...PLAINTIFFS AND 1. DIN TAN YONG CHIA (NRIC NO.:- 930223-14-6551) 2. DION TAN YONG CHIEN (NRIC NO.:- 900107-14-6127) 3. JARED ANG TZER SHEN (NRIC NO.:- 860623-56-6423) 4. DIANA TAN SHEIK NI (NRIC NO.:- 860611-56-6274) 5. JEFFREY TAN SIEW YANG (NRIC NO.:- 730508-04-5061) 6. WONG MON FONG (NRIC NO.:- 850524-14-5958) 7. THAI ODYSSEY SDN BHD (CO. NO.:- 199401025563 (311244-V) 8. SPA ODYSSEY SDN BHD (CO. NO.:- 201001023990 (907762-V) 9. THAI ODYSSEY GROUP SDN BHD (CO. NO.:- 201001038163 (922087-M) 10. THAI ODYSSEY SPA & CAFE SDN BHD (CO. NO.:- 201701026680 (1240846-U) 11. SPA ODYSSEY GROUP SDN BHD (CO. NO.:- 201801005904 (1267918-V) 2 12. SPA ODYSSEY PROCUREMENT SDN BHD (CO. NO.:- 201901011381 (1320709-W) 13. SPA ODYSSEY JV SDN BHD (CO. NO.:- 201901032715 (1342045-X) 14. SPA ODYSSEY VENTURE BERHAD (CO. NO.:- 201701037084 (1251255-M) 15. STELLAR REGION SDN BHD (CO. NO.:- 200501032516 (714654-K) 16. TOUCHES DE SIAM SDN BHD (CO. NO.:- 200301003335 (605755-W) 17. DASAR POTENSI SDN BHD (CO. NO.:- 200201006992 (574655-U) 18. DAY DREAM SDN BHD (CO. NO.:- 200701036855 (794884-P) 19. RIBUAN BUDAYA SDN BHD (CO. NO.:- 200501006611 (683658-T) 20. REGION BEYOND SDN BHD (CO. NO.:- 200401000320 (638823-K) 21. BAAN KUN YA SDN BHD (CO. NO.:- 201501014431 (1139763-A) 22. FOOD COUTURE BERHAD (CO. NO.:- 201801034510 (1296537-T) ...DEFENDANTS GROUNDS OF JUDGMENT (NO. 3) 3 Introduction [1] The Plaintiffs’ application in Enclosure 39 (‘R&M Application’) is for the appointment of an interim Receiver and Manager (‘R&M’) over the entire assets and undertaking of Thai Odyssey Sdn Bhd (‘D7’), Thai Odyssey Group Sdn Bhd (‘D9’) and SPA Odyssey Venture Sdn Bhd (‘D14’), pending the full and final disposal of their Oppression Action in Enclosure 1. [2] The R&M Application is made pursuant to Order 30 of the Rules of Court 2012 (‘ROC 2012’) and/or Section 25(2) and Paragraph 6 of the Courts of Judicature Act 1964 (‘CJA’) and/or Section 43 of the Specific Relief Act 1950 and/or the Inherent Jurisdiction of the Honourable Court. [3] By consent of all parties, the Court only heard submissions on whether an R&M should be appointed. Only in the event the R&M Application is allowed would the parties submit on the issue of the candidacy of the R&M, which given the decision herein was rendered unnecessary. Brief factual background [4] Enclosure 1 is filed by the Plaintiffs on 16.11.2020 pursuant to Section 346 of the Companies Act 2016 (‘CA 2016’) on the grounds that the Plaintiffs were oppressed or their interests as members of the 7th to 22nd Defendants were disregarded and/or unfairly discriminated. 4 [5] The primary allegations of oppression pleaded by the Plaintiffs are essentially as follows: - (a) Termination of the 1st Plaintiff (‘P1’) as D7’s Group Managing Director; (b) Appointment of additional directors; and (c) The RM 9 million capital call (‘the 2nd Capital Call’). [6] The Plaintiffs have sought the following reliefs in Enclosure 1, largely against the 1st to 6th Defendants (‘Individual Defendants’) as follows: (a) An order that the RM 9 million ‘capital call’ be revoked; (b) A declaration of oppression be made against the Individual Defendants; (c) An order that the D7 to D22 be wound up or alternatively an order that the Individual Defendants to purchase the Plaintiffs’ shares in the 7th to 22nd Defendants at fair value; and (d) An inquiry into damages suffered by the Plaintiffs and an order that damages be paid personally by Individual Defendants. [7] Almost 4 months later, the Plaintiffs belatedly filed this R&M Application on the ground that: (a) The Individual Defendants have taken steps to deprive the Plaintiffs’ of their entitlement and rights over Thai Odyssey business by making continuous capital calls to further dilute 5 the Plaintiffs’ shares in the Companies (‘Alleged Share Dilution’); (b) The Individual Defendants have caused irreparable mischief to Thai Odyssey business and placed its assets in jeopardy, allegedly due to the following acts:- (i) Misuse of funds from Capital Call of RM9 million; (ii) Closing of various outlets in an allegedly haphazard manner; (iii) Mismanagement of outlets in China, Indonesia and Thailand; and (iv) Breaching contract with third party investors. [(b)(i) to (iv) are collectively identified as the ‘Alleged Mismanagement’] Law on appointment of Receiver & Manager [8] Section 25(2) of the CJA reads together with Paragraph 6 of Schedule provides that the appointment of an interim receiver is to preserve the property the subject matter of any cause or matter:- “Schedule - (Section 25 (2)) Additional Powers of High Court:- (6) Preservation of property Power to provide for the interim preservation of property the subject matter of any cause or matter by sale or by injunction or the appointment of a receiver or the registration of a caveat or a lis pendens or in any other manner whatsoever.” 6 [9] Section 43 of Specific Relief Act 1950 provides that the Court’s power to appoint R&M is discretionary: - “s 43. Appointment of Receivers discretionary The appointment of a Receiver pending a suit is a matter resting in the discretion of the court. The mode and effect of his appointment, and his rights, powers, duties, and liabilities, are regulated by the law relating to civil procedure.” [10] The principle for an appointment of R&M pending determination of the main action is well-settled where the Court must be satisfied that the following 3 requirements have been established:- (a) there is a good prima facie claim of title by the applicant; (b) the property is in jeopardy; and (c) the applicants will be in a worse situation if the appointment of a receiver is delayed. [See: Yeoh Eng Kong v Dato’ Nik Ismail bin Nik Yusoff & Ors [2016] MLJU 936 at paragraph [37]; and Dato' Sri Andrew Kam Tai Yeow v Tan Sri Dato' Kam Woon Wah & Ors [2018] MLJU 1470 at paragraph [31]] [11] To justify the appointment of an interim R&M, the application must be supported with solid and credible evidence that there is a risk of dissipation of assets. In this regard in Ng Yong Long v Qua Hock Leong & Ors [2006] 5 MLJ 768 Abdul Wahab Said Ahmad J (as his Lordship then was), said:- 7 “[36] A mere assertion that there was a risk of dissipation is not good enough. There has to be credible, solid evidence to substantiate the alleged risk. A member must show that the Company's assets are in jeopardy as a result of serious disputes between shareholders in the Company (see Federal Transport Service Co Ltd & Ors v Abdul Malik & Ors [1973] 1 MLJ 216). [12] The appointment of R&M pursuant to Order 30 of ROC 2012 is a drastic remedy and the Court must exercise strict judicial discretion. The following passage in Yeoh Eng Kong (supra) at paragraph 110 is apposite:- “The appointment of a receiver and manager is a drastic remedy. The judicial discretion to permit the same must without exception only be exercised with prudence and great circumspect. The danger, loss or jeopardy the appointment seeks to avoid or deal with must be sufficiently imminent and compelling, if not clear and present.” [13] As such, the Plaintiffs’ case only succeeds if the Plaintiffs lead cogent evidence that the assets of the companies are being dissipated and or in danger and that the reliefs that they seek would be frustrated if an R & M is not appointed in the interim pending the determination of Enclosure 1. [14] In the instant case, learned counsel for the Plaintiffs candidly conceded that there is no evidence to show that the assets of the companies in this case are being dissipated or in danger. 8 [15] The crux of the Plaintiffs’ complaints in relation to the assets of the companies is that the 2nd Capital Call was unnecessary and that the funds derived therefrom could have been utilised differently. Such contentions however concern more with management decisions and or policies, which is an area that would be inappropriate for the Court to interfere. If an authority is needed, the following passage in Soh Choo @ Soh Ai Choo & Anor v. Unico-Desa Plantations Berhad & Ors [2011] 1 LNS 1101 suffices: “[61] From the contemporaneous documents related to the two disposals or sales of UHB shares, it is quite clear to me that these matters or concerns as set out in the rationale were not imagined. In addressing these concerns, the Respondents made certain business judgments and reached certain business decisions. Ultimately, those business decisions were translated into business objectives as reflected in the proposal and of utmost importance, those objectives were indeed realized. This is significant as it supports and confirms the Respondents' contention that these transactions and disposals were but business and commercial decisions. Such decisions have oft been said by courts in many jurisdictions as generally been inappropriate for intervention by the court. The Federal Court reiterated this stance in Pan-Pacific Construction Holdings Sdn Bhd v. Ngiu-Kee Corporation (M) Bhd [2010] 6 CLJ 721, 734 when it referred back to its own earlier decision in Owen Sim Liang Khui v. Piasau Jaya Sdn Bhd & Anor [1996] 4 CLJ 716. The Court of Appeal in Soh Jiun Jen v. Advance Colour Laboratory Sdn Bhd & Ors [2010] 4 CLJ 897; [2010] 5 MLJ 342, 355 too repeated this and I can do no better than to set out that reminder. After citing Lord Wilberforce's observations in Re Kong Thai Sawmill (Miri) Sdn Bhd [1978] 1 LNS 170; [1978] 2 9 MLJ 227(PC) and the rule in Foss v. Harbottle [1843] 2 Hare 461, the Court of Appeal said: "The court, under the pretext of minority protection under s. 181, should be slow from interfering or enquiring into the desirability or wisdom of the acts of those who control or manage the company's affairs. It cannot be the function of the court to take management decisions and to substitute its opinions for those of the directors and the majority of the members". … [75] With evidence shown to the contrary that disproved the Petitioners' concerns, I agree with the submissions of learned counsel for UDP that it would be "dangerous and misleading to analyze the financial consequences of the impugned transactions in terms of hypothetical loss, in isolation from other material factors such as how the proceeds were utilized". From the evidence, I am not only inclined but I am satisfied that the disposals of the UHB shares were purely business decisions that did indeed ultimately benefit UDP as reflected in the dividends declared for the years 2007 and 2008. [16] It is an established principle that the Court would not readily appoint R&M over the company if the company is able to manage its own affairs. In Rajabali Jumabhoy & Ors v Ameerali R Jumabhoy & Ors [1997] 2 SLR (R) 486, the Singapore High Court held that the applicant who sought to appoint R&M over the company itself must show that the company was unable to manage its own affairs. This principle was adopted by in Yeoh Eng Kong (supra) and in Dato' Sri Andrew Kam Tai Yeow (supra). 10 [17] In the instant case, there is no deadlock in the management of D7. D9 and or D14. There is no reason for the companies’ Boards of Directors to be stripped off and to surrender their management powers and authorities to third parties – the proposed joint R&M, including their powers to run and carry on the Thai Odyssey business. [18] As at the date of hearing Enclosure 39, the companies remain going concerns. There are no less than 720 staff and therapists currently under the employment of D7. Operational wise, it was business as usual until the implementation of the various phases of Movement Control Order (‘MCO’) since March 2020 which had caused the Thai Odyssey outlets to have to close at intervals. As at 28.06.2021, the MCO Period is as follows:- No. MCO Periods Outlets Closed 1. 18.03.2020 to 30.06.2020 All outlets in Malaysia 2. 07.10.2020 to 12.11.2020 All outlets in Sabah 3. 13.01.2021 to 04.03.2021 All outlets in Malaysia - Negeri Sembilan and Sabah (closed until 24.02.2021) 4. 06.05.2021 to 28.06.2021 All outlets in Malaysia - Selangor (closed from 06.05.2021) - Kuala Lumpur and Johor Bahru (closed from 07.05.2021) - Penang and Negeri Sembilan (closed from 10.05.2021) - Sabah (closed from 01.06.2021) As and when the spa and reflexology industry was allowed to operate, the Companies had generated respectable and healthy 11 revenues as seen in the Revenue Table of the Companies from January 2020 to May 2021:- Period D7’s Revenue (RM) D9’s Revenue (RM) January 2020 2,677,297.91 2,663,855.86 February 2020 1,993,022.72 2,070,256.94 March 2020 1,029,488.32 1,001,754.64 April 2020 -1,462.80 0.00 May 2020 0.00 0.00 June 2020 3,660.40 0.00 July 2020 1,117,607.09 1,201,659.65 August 2020 1,275,953.04 1,335,157.68 September 2020 1,246,756.41 1,240,721.83 October 2020 744,979.49 859,206.58 November 2020 737,791.73 787,428.45 December 2020 996,108.20 1,054,686.04 January 2021 377,463.21 387,021.61 February 2021 119,530.87 92,276.21 March 2021 1,921,123.07 1,551,916.16 April 2021 1,287,958.00 1,175,150.00 May 2021 178,447.00 146,633.00 [19] Thus, there is no reason to interfere into the businesses of D7, D9 and D14 with the appointment of a R&M at all. [20] In respect of the 2nd Capital Call, the issue must be juxtaposed against the disruption caused by the various movement control orders and curtailment of health spa business operations. The Court can take judicial notice of the impact of the various on-going movement control orders on many industries including the health spa industry. 12 [21] It is true that the Plaintiffs and the Individual Defendants hold different positions on the purpose for the 2nd Capital Call. The Individual Defendants say that the 2nd Capital Call is necessary to ensure the sustainability of D7 and D9 in the midst of pandemic where the business operations were severely curtailed and disrupted. [22] The Plaintiffs on the other hand say that there was “absolutely no need” for the 2nd Capital Call of RM 9 million due to the following reasons:- (a) The 1st Capital Call of “RM 2 million” (which was inaccurate as only RM 1.7 million was raised) was more than sufficient to last until December 2020 based on the projected sales revenue of RM 3 million to RM 5 million which would be enough to cover the estimated monthly expenses of approximately RM 4 million; (b) The “RM 2 million” would have suffice to cover cashflow from July and August whereas the projected sales collection for August to September would have covered operational costs up until December 2020. [23] Accordingly, the Plaintiffs’ case is that the 2nd Capital Call was designed to dilute the Plaintiffs’ shares in D7 and D9 and as such necessitate the appointment of an interim R&M. [24] Whilst the question regarding the true purpose of the 2nd Capital Call will be determined when Enclosure 1 is heard, for the present purpose, the focus is whether the funds raised from the 2nd Capital 13 Call are in danger of being dissipated or that the Plaintiffs would be in a worse position if no interim R&M is appointed. [25] With respect to learned counsel for the Plaintiffs, both these prerequisites have not been shown to persuade this Court to look favourably on their application in Enclosure 39. It is also pertinent that the Plaintiffs have not taken up the option to subscribe for the shares of the companies under the 2nd Capital Call. This means that if there is indeed a misuse of the additional funds raised thereunder, it did not at all involve any monies injected by the Plaintiffs. [26] There must be strong evidence of dissipation in an application for the appointment of an interim R & M. In Wong Luen Hang & Anor v. Chan Yuk Lung & Ors [2017] HKCU 97, the Court held that the “solid evidence” of a real risk of dissipation of assets is distinct from inferring such a risk from the conduct or commercial morality of the defendants:- “[74] I bear in mind that there must be "solid evidence" of the risk of dissipation. A receivership order is a serious infringement of rights and is only justified on appropriately clear and strong facts and risks. The standard of proof of the real risk of dissipation is relatively high: see Colman J in Laemthong International Lines Co Ltd v Artis [2005] 1 Lloyd’s Rep 100 at §60 citing Thane Investments Ltd v Tomlinson [2003] EWCA Civ 1272. That standard is applicable to all applications whether inter partes or ex parte. 14 [75] In the present case admittedly there are past questionable transactions. However, I am not persuaded that there is "solid evidence" of the risk of dissipation on the facts as presented as distinct from inferring such a risk from the conduct or commercial morality of the defendants.” [27] Quite apart from the aforesaid, there is an allegation that P1 and P3 are now involved in a direct and competing business. Although this is vehemently disputed, it is more prudent not to allow this R&M Application so as not to risk any possibility of the Plaintiffs getting access to companies’ accounts and books and/or other sensitive information concerning pricing strategy and competitive advantage for their personal benefit which would jeopardize D7 and D9 in the event the allegation turns out to be true. Given that the assets of the companies are not in danger or being dissipated, the preservation of the status quo until the final determination of Enclosure 1, to my mind, would better serve the justice of the case. Should an interim R&M be appointed over D7 and D9, it will cause irreparable hardship and damage to the business of the companies given the stigma associated with such appointment. [28] It is not necessary for this Court to deal with the specific Alleged Mismanagements raised by the Plaintiffs pertaining to the closures of certain outlets and training center, the decision to dissociate from PT Thai Odyssey Indonesia, the allegation relating to the management agreement with one Qi Odyssey Sdn Bhd or the issue involving the breach of agreement with a joint venture partner. To my mind, these issues, even if true, do not merit the 15 drastic step of appointing an interim R&M pending the determination of Enclosure 1. Conclusion [29] For the reasons above, Enclosure 39 is dismissed with costs. Dated the 13th day of September 2021 ONG CHEE KWAN Judicial Commissioner High Court of Kuala Lumpur, NCC2 COUNSEL: 1. Mr. Alvin Tang together with Ms. Teo Ju-li, Mr. Tan Chong Lii, Mr. Evan Lee Sian Wen and Ms. Tuan Earn Yee for Plaintiffs Messrs. Tan Chong Lii & Co. (Petaling Jaya) 2. Mr. HR Dipendra together with Mr. Yap Vern - Chieh Gary, Ms. Hoo Kit Yee and Ms. Tong Joe Jye for 1st to 6th Defendants Messrs. Koh Dipendra Jeremiah Law (Kuala Lumpur) 3. Mr. Yee Mei Ken together with Ms. Caitlin Tan Hui Yi an Ms. Eunice Soo (Intern) for 7th and 9th Defendants Messrs. Shearn Delamore & Co. (Kuala Lumpur) 4. Mr. Yee Jun Hong for 11th to 14th Defendants Messrs. JH Yee & Co. (Kuala Lumpur) 16 CASE REFERENCE: 1. Yeoh Eng Kong v Dato’ Nik Ismail bin Nik Yusoff & Ors [2016] MLJU 936. 2. Dato' Sri Andrew Kam Tai Yeow v Tan Sri Dato' Kam Woon Wah & Ors [2018] MLJU 1470. 3. Ng Yong Long v Qua Hock Leong & Ors [2006] 5 MLJ 768 4. Soh Choo @ Soh Ai Choo & Anor v. Unico-Desa Plantations Berhad & Ors [2011] 1 LNS 1101. 5. Rajabali Jumabhoy & Ors v Ameerali R Jumabhoy & Ors [1997] 2 SLR (R) 486 LEGISLATION REFERENCE: 1. Section 25(2) and Paragraph 6 of the Courts of Judicature Act 1964 2. Section 43 of the Specific Relief Act 1950 3. Section 346 of the Companies Act 2016 4. Order 30 of the Rules of Court 2012 17