1. ) MERGE JATI ENGINEERING SDN BHD 2. ) HOW KEN KON @ LOW KEN KON 1. ) KANG JIT SING 2. ) NG MUI KOON 3. ) KANG KOK WEE, KELVIN 4. ) KANG KOK YONG, JASON 5. ) TONGOD OIL PALM SDN BHD 6. ) PINANGAH OIL PALM SDN BHD 7. ) WEST BORNEO RESOURCE

JA-24NCC-35-12/2022 Kand. 78 23/01/2024 08:55:44 DALAM MAHKAMAH TINGGI MALAYA DI JOHOR BAHRU DALAM NEGERI JOHOR DARUL TA’ZIM, MALAYSIA SAMAN PEMULA NO: JA-24NCC-35-12/2022 Dalam perkara mengenai West Borneo Resources Sdn. Bhd (Syarikat No: 871672-A) Dan Dalam perkara mengenai Seksyen 223 dan Seksyen 346 dan peruntukkan-peruntukkan lain yang berkaitan di bawah Akta Syarikat 2016 Dan Dalam perkara mengennai Aturan 7 dan 88 Kaedah-kaedah Mahkamah 2012 Dan Dalam Perkara bidang kuasa sedia ada Mahkamah yang Mulia ini ANTARA 1. MERGE JATI ENGINEERING SDN BHD (NO. SYARIKAT: 480344-A) 2. HOW KEN KON @ LOW KEN KON (NO. K/P: 610323-10-6175) ... PLAINTIF-PLAINTIF DAN 1 S/N i3Sr/9lTf0iNEF36bNHeHQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 1. KANG JIT SING (NO. K/P: 531111-01-5903) 2. NG MUI KOON (NO. K/P: 530717-66-5084) 3. KANG KOK WEE, KELVIN (NO. K/P: 811219-71-5035) 4. KANG KOK YONG, JASON (NO. K/P: 840801-71-5041) 5. TONGOD OIL PALM SDN BHD (NO. SYARIKAT: 200601028301 (748057-W) 6. PINANGAH OIL PALM SDN BHD (NO. SYARIKAT: 200601001516 (721264-K) 7. WEST BORNEO RESOURCES SDN BHD (NO. SYARIKAT: 871672-A) ...DEFENDAN-DEFENDAN GROUNDS OF JUDGMENT [1] The Plaintiffs applicant filed this suit seeking for remedies under section 346 of the Companies Act 20161 (the Act) on allegation of 1 Section 346. Remedy in cases of an oppression (1) Any member or debenture holder of a company may apply to the Court for an order under this section on the ground— (a) that the affairs of the company are being conducted or the powers of the directors are being exercised in a manner oppressive to one or more of the members or debenture holders including himself or in disregard of his or their interests as members, shareholders or debenture holders of the company; or (b) that some act of the company has been done or is threatened or that some resolution of the members, debenture holders or any class of them has been passed or is proposed which unfairly discriminates against or is otherwise prejudicial to one or more of the members or debenture holders, including himself. (2) If on such application the Court is of the opinion that either of those grounds is established, the Court may make such order as the Court thinks fit with the view to bringing to an end or remedying the matters complained of, and without prejudice to the generality of subsection (1), the order may— 2 S/N i3Sr/9lTf0iNEF36bNHeHQ **Note : Serial number will be used to verify the originality of this document via eFILING portal oppression in respect of the carrying the affairs of the 7th Defendant. The reliefs sought are for the following declaration: a) that the 1st, 2nd, 3rd and 4th Defendants acted jointly and/or severally: i. in conducting the affairs of the 7th Defendant in a manner that is oppressive and in disregard of the Plaintiff’s interests as members of the 7th Defendant; and ii. caused the affairs and conducts of the 7th Defendant to be done in a manner which has and/or will unfairly discriminates against or which is or will otherwise to the Plaintiff as members of the 7th Defendant; (a) direct or prohibit any act or cancel or vary any transaction or resolution; (b) regulate the conduct of the affairs of the company in the future; (c) provide for the purchase of the shares or debentures of the company by other members or debenture holders of the company or by the company itself; (d) in the case of a purchase of shares by the company, provide for a reduction accordingly of capital of the company; or (e) provide that the company be wound up. (3) If an order that the company be wound up is made under paragraph (2)(e), the provisions of this Act relating to winding up of a company shall apply as if the order had been made upon a petition duly presented to the Court by the company, with such adaptations as are necessary. (4) If an order under this section makes any alteration in or addition to any constitution, then, notwithstanding anything in any other provision of this Act, but subject to the order, the company concerned shall not have power without the leave of the Court to make any further alteration in or addition to the constitution inconsistent with the order, but subject to the foregoing provisions of this subsection, the alterations or additions made by the order shall be of the same effect as if duly made by resolution of the company. (5) An office copy of any order made under this section shall be lodged by the applicant with the Registrar within fourteen days from the making of the order. (6) The applicant who contravenes subsection (5) commits an offence and shall, on conviction, be liable to a fine not exceeding ten thousand ringgit and, in the case of a continuing offence, to a further fine of five hundred ringgit for each day during which the offence continues after conviction. 3 S/N i3Sr/9lTf0iNEF36bNHeHQ **Note : Serial number will be used to verify the originality of this document via eFILING portal b) a declaration that the Plaintiffs are “locked-in” minority shareholders in the 7th Defendant; c) a declaration that the Joint Venture Agreement dated 3.11.2022 entered between the 7th Defendant and PT Adau Agro Kalbar is null and void; d) an order that the 5th-6th Defendants do buy-out and/or purchase the 1st and 2nd Plaintiff’s shares in the 7th Defendant at a fair value based on the percentage of shareholdings of the 1st Plaintiff (Merge Jati Engineering Sdn. Bhd) 16.4% and 2nd Plaintiff (How Ken Kon) 14.25%; e) for the purpose of paragraph (4) above, an independent valuer (nominated by the Plaintiffs) and approved by this Court shall within 30 days from the date of this order, value the Plaintiffs shares in the 7th Defendant (determined value) and the valuation shall be conducted on the basis that: i. the 7th Defendant is a going concern; ii. by reference to the assets, profitability and prospects of the 7th Defendant; and iii. On the basis of willing buyers, willing sellers and on pro rata basis with no discount on minority holding of the Plaintiffs in the 7th Defendant; f) that within 7 days from the completion of the valuation of the shares held by the Plaintiffs, the valuer shall forward a copy of the report containing the Determined Value to all parties and have the same filed in Court via an affidavit pursuant to Order 40 Rule 2 of the Rules of Court 2012; g) that the 5th and 6th Defendants jointly and/or severally shall pay to the Plaintiffs the Determined Value based on the shareholding percentage in paragraph (4) above within 7 days 4 S/N i3Sr/9lTf0iNEF36bNHeHQ **Note : Serial number will be used to verify the originality of this document via eFILING portal from the expiry of the 30 days stipulated under paragraph (6) above; h) Upon the full compliance of paragraph 7 above and within 7 days, both the Plaintiffs shall resign their representative directors and to perfect the transfer of the Plaintiffs’ shares in the 7th Defendant and to deliver such transfer documents together with the original certificates to the 7th Defendant’s company secretary and the 7th Defendant’s company secretary shall forthwith use the transfer documents to transfer all of the Plaintiffs’ shares in the 7th Defendant; i) an alternative order to paragraphs (e), (f), (g) and (h) above (the same relief as per paragraph 5, 6, 7 and 8 in enclosure 1), that the 7th Defendant be wound up by this Court; j) damages to be assessed; k) parties at liberty to apply; l) cost to be borne by the 1st to 6th Defendants jointly and severally and be paid to the Plaintiffs. [2] Having perused the cause papers, having heard submissions by both parties and cross-referred to the relevant provisions of the law and authorities cited by both parties, this Court came to a finding that the affairs of the 7th Defendant were not conducted in accordance with its articles of association, there was mismanagement of the 7th Defendant’s assets by failure to handle the ‘assets’ in an honest and professional manner by failure to secure a reasonably better price for disposal of the 7th Defendant’s shares, there was mismanagement in the funds of the respondent resulting in it improperly utilized by the Defendants that gives rise to oppression, and allowed the reliefs sought albeit partially and some, with consequential modifications. 5 S/N i3Sr/9lTf0iNEF36bNHeHQ **Note : Serial number will be used to verify the originality of this document via eFILING portal Background: observation and deduction by this Court [3] For the purpose of application in section 345 in support of section 346 of the Act, the affidavit of the 1st Plaintiff was affirmed by Mr. Low Meng Koon (LMK@ Jason Low) a director and shareholder of the 1st Plaintiff, who is also the Director of the 7th Defendant and the 2nd Plaintiff Mr. How Ken Kon (HKK), a director and shareholder of the 7th Defendant (see: CCM search exhibit ‘LMK-2’ of Affidavit In Support [AIS] 1st Plaintiff enclosure 2). Both the affidavits deposed the events that transpired giving rise to the complaint by the Plaintiff of conduct by the Defendants (the family of Kang) in relation to the 7th Defendant, said to be in a manner oppressive. [4] According to the affidavits of the 1st and 2nd Plaintiff, the 1st Defendant is the leading taskmaster of the Kang family and married to the 2nd Defendant. This is based, as found by this Court, the presence of the 1st Defendant’s name in all the correspondences via e-mail and the resolutions of the 7th Defendant. The 3rd and 4th Defendant are the children of the 1st and 2nd. The 7th Defendant (WBS) was set up in 2009 by 3 sets of integral parties being: a) Kang family members; b) Merge Jati Engineering Sdn Bhd (MJE) the (1st Plaintiff); c) How Ken Kon@Low Ken Kon (HKK@2nd Plaintiff), this fact not disputed by the Defendants. [5] It is also not disputed that the 7th Defendant’s set up as an investment holding company was on the proposal by Mr. LMK and Ann Kok Seng (AKS) (directors of the 1st Plaintiff), made to the Kang Family Members and the 2nd Plaintiff (HKK), to jointly venture into business opportunity. This came about when a piece of land suitable for oil palm 6 S/N i3Sr/9lTf0iNEF36bNHeHQ **Note : Serial number will be used to verify the originality of this document via eFILING portal plantation in Indonesia was found by LMK and AKS. With the set up of the 7th Defendant ‘WBS’ on 9.9.2009, it would acquire percentage of stocks in an Indonesian company PT Sandai Makmur Sawit (PT SMS) which will then acquire the said oil palm plantation in Indonesia. [6] The 7th Defendant’s shareholders (see: CCM search exhibit ‘LMK- 2’ AIS 1st Plaintiff enclosure 2) at the time of the establishment of WBS are: a) the 5th Defendant Tongod Oil Palm Sdn Bhd: 48%; b) the 6th Defendant Pinangah Oil Palm Sdn Bhd: 25%; c) the 1st Plaintiff MJE: 12%; and d) the 2nd Plaintiff HKK himself: 15%; with the 5th and 6th Defendant owned by the Kang family as they formed the Directors and shareholders of the said companies (see: CCM search exhibit ‘LMK-3’). The defendants did not dispute this. [7] The complaints raised by the Plaintiffs centered on the act of the Defendants who were said to have come to a management decision by force and abruptly despite putting forth the issues for the Plaintiffs’ opinion, resulting in a loss to the Plaintiffs. This Court agrees as submitted by the Plaintiffs that if true, means breaches of the ‘majority rule’ principle going against the corporate democracy and good governance that would create oppressive conducts upon the minorities. [8] The Plaintiffs complaint of mismanagement by the Kang family members of the large funds collected by a third party in Indonesia to the 7th Defendant involving a sum of 65Rp billion Indonesian, the sum which was said improperly diverted into a Bangkok Bank Account. The tracing of the sum money, say the Plaintiffs shows the movement that paved the 7 S/N i3Sr/9lTf0iNEF36bNHeHQ **Note : Serial number will be used to verify the originality of this document via eFILING portal way back to the Defendants which then saw a transfer to third parties and simultaneously illegally retaining paid back sums to the Plaintiffs. [9] The Defendant Jason Kang however said all these moves and transactions were not objected to by the Plaintiffs as a WhatsApp group was created by LMK known as ‘SMS Plantation Board’ the members of the WA group are LMK, AKS, Ben Soo Han Keong (Ben Soo) all of MJE, the 1st Defendant, 3rd Defendant, Kang Kok Yong Jason (Jason Kang @4th Defendant) and HKK for the purpose of collaboration with PT SMS. [10] In 2009 WBS acquired 95% of stakes in PT SMS. As local regulatory requirement mandated Indonesian ownership in an Indonesian Company, the remaining 5% of the shareholding in PT SMS had to be owned by an Indonesia entity identified as PT Mega Sawit Abadi (MSA) who hold 5% shareholding in PT SMS. This, from the Plaintiff’s perspective means MSA was holding 5% in PT SMS as a nominee. The Defendants deposed no knowledge of any of the transactions between MJE and PT MSA. [11] As WBS was set up by 3 integral parties being the Kang family members (in relation to the 5th and 6th Defendant), Merge Jati Engineering Sdn Bhd (MJE) and How Ken Kon@Low Ken Kon (HKK@2nd Plaintiff), the Plaintiffs contend that each of the 3 have equal participation in the management of WBS’s business and affairs and this includes full and total control with mutual understanding between all 3 parties over the affairs of the wholly owned Indonesian subsidiary company. This is disputed by the Defendants to the extent that any decisions must be made by the board members of WBS. This, therefore did not materialize in favor of the Plaintiffs. 8 S/N i3Sr/9lTf0iNEF36bNHeHQ **Note : Serial number will be used to verify the originality of this document via eFILING portal [12] The Plaintiffs submitted that the contrary resulted with the Plaintiffs being the minorities are ‘locked-in’ within the 7th Defendant, without any control over the affairs and the very purpose of setting up the 7th Defendant as an investment holding company being realized, by virtue of its sale of 51% shareholding in its previous wholly-subsidiary. This, the Plaintiffs contend would move a buy-out under section 346. [13] The Plaintiffs in support of the contention, annexed documents being the (WBS) 7th Defendant’s Memorandum of Association that states the power of the company to take, buy or acquire shares, stocks, debentures or other securities, with the latest company search with CCM on the name of Directors, proof of capital investment with % of shareholding reflected as follows: a. Kang Family Members: 69.35% b. MJE: 16.40% c. 2nd Plaintiff: 14.25%. [14] In February 2020, Jason Kang (4th Defendant) via e-mail dated 4.2.2020 notified the directors and shareholders of WBS that WBS was at the stage of finalizing a term sheet agreement on a joint venture agreement (JV) for PT SMS with an Indonesia plantation source ‘Mukti Group’ (Mukti) through a company identified as PT Adau Agro Kalbar (PT AAK) (see: exhibit ‘LMK-5’ enclosure 2 for the Indicative Term Sheet). [15] According to the 1st Plaintiff, this act of Jason Kang heading the discussion with Mukti as the representative of WBS was never followed with an authorization from the board nor with any prior discussion held with MJE and HKK. The draft term sheet of the JV was opposed by LMK 9 S/N i3Sr/9lTf0iNEF36bNHeHQ **Note : Serial number will be used to verify the originality of this document via eFILING portal and HKK as the terms were not in WBS’s favor and queries were raised by LMK and HKK on why the need for participation of PT AAK in PT SMS’s move to obtain a loan, that necessitate PT AAK to purchase a 51% equity stake in PT SMS by procuring the subject company itself that is said by the Plaintiffs to be absurd. This would render the move by PT SMS to procure the loan from BNI and to pledge the assets of PT SMS as collateral for BNI. [16] The Defendant, to the contrary took the stand that shareholders of WBS have long intended to dispose PT SMS or to explore a new source of financial income to PT SMS, having viewed PT SMS as experiencing loss and is affecting WBS as the parent company. The queries suggested by LMK and HKK were responded by Jason Kang via e-mail dated 10.2.2020 and 16.10.2021 stating he was merely acting as an independent accountant and consultant (see: exhibit ‘LMK-7’ and ‘LMK-9’ enclosure 2 and affidavit Jason Kang enclosure 6). The Plaintiffs on the other hand, viewed this as indicative of the dominant position played by Jason Kang (4th Defendant) in the discussion with the Indonesia plantation source ‘Mukti’. [17] It is crucial to present the terms of the draft Term Sheet for the JV with PT AAK, it being the focus that triggered the allegation of oppression on the Plaintiffs. The alternative option was raised by Beng Soo (one of the directors of the 1st Plaintiff) with Jason Kang but was disproved, the extract of the Term Sheet amongst others, as below: “The transaction price is at Rp130 billion for 100% Enterprise Value of SMS said for the purpose of this transaction, the whole 10 S/N i3Sr/9lTf0iNEF36bNHeHQ **Note : Serial number will be used to verify the originality of this document via eFILING portal amount of Rp130 billion is deemed as shareholder loan from WBR (WBS) to SMS”. [18] With these ‘queries’ brought up and ‘addressed’, the draft Conditional Joint Venture Agreement (CJVA) and the Side Letter of the CJVA were circulated to HKK and LMK on 15.6.2021. On 21.6.2021, the CJVA was executed by WBS, MSA, PT AAK and PT SMS (see: exhibit “LMK-8” of enclosure 2). This moved changes in the shareholding of WBS and PT SMS when in October 2021, the 5% shareholding of MSA in PT SMS was transferred to WBS that sees WBS retaining a 100% shareholding, then simultaneously followed with a dilution of WBS shareholding in PT SMS from 100% to 49% and PT AAK acquired 51% of shareholding through subscription (see: exhibit “LMK-15” letter from counsel for the Defendants dated 19.9.2022 and exhibit “LMK-8” CJVA in enclosure 2). [19] As a result, the primary purpose in setting up WBS to own PT SMS being reduced in term of its shareholding in PT SMS from 100% to 49%, with the take-over of 51% by PT AAK. This, according to the Plaintiffs means that WBS looses its simple-majority and sovereign over PT SMS. The issue arising is did or did not both MJE and HKK execute the necessary documents that sees the 51% take-over by PT AAK and hence been made aware of the outcome? Role of MJE and HKK vs Conduct by the Defendants said in a manner oppressive [20] The Plaintiffs contended that although Jason Kang had provided the MJE and HKK the updates of the negotiations, the Kang Family Members have bulldozed the terms and turned a blind eye to the objections made 11 S/N i3Sr/9lTf0iNEF36bNHeHQ **Note : Serial number will be used to verify the originality of this document via eFILING portal by both MJE and HKK. This Court found this supported, as can be seen from the exchanged of e-mails between MJE via Ben Soo and HKK with Jason Kang, notifying of their intention to exit WBS as a result of this oppressive conduct (see: exhibits ‘HKK-5’ in enclosure 3, exhibit ‘LMK-5’ in enclosure 2). [21] In the e-mails exhibited as ‘HKK-5’ and ‘LMK-5’, WBS had mooted the concern on the speed the documents pertaining to the JV was handled and executed, including putting across the forecasted outcome that is seen in the JV as disposing the shareholding in WBS and a move to dispose MJE’s shares in WBS. Although contents of e-mail tact, what can be seen in this e-mail is there exist a clear concern by both MJE and HKK that questioned the said terms in the JV and a mark by both MJE and HKK to exit WBS (see: exhibit “LMK-6” of AIS enclosure 2). [22] The conduct of the Defendants against MJE and HKK being the minorities in WBS, said to be ‘in a manner oppressive’ according to the Plaintiffs can be seen in the discreet handling of the funds from the 51% take over by PT AAK into illegal bank account and other account. It is the undisputed fact (Defendant did not refute this fact) that WBS official company bank is with RHB Bank Berhad of a particular account number with 2 signatories of the 3 parties as follows: “To be signed by either one from “Group A” and either one from “Group B” Group A Kang Family Members 12 S/N i3Sr/9lTf0iNEF36bNHeHQ **Note : Serial number will be used to verify the originality of this document via eFILING portal Group B How Ken Kon@ Low Ken Kon (No. K/P: ……) Low Meng Koon (No. K/P: ……)” [23] The Plaintiffs state that the above arrangement is to ensure a check and balance mechanism amongst the 3 parties consistent with the idea when setting up of WBS initially originated. Although this is denied by the Defendants in paragraph 42 of their affidavit in reply enclosure 5, the balanced representative coming from the 3 parties respectively would, to this Court’s finding, surely formed the understanding, then. [24] The Plaintiffs contend that Jason Kang via his e-mail dated 18.1.2022 made a misrepresentation to LMK on the movement of the Rp60 Billion when he states that Rp50 Billion was released from PT SMS to WBS and the remaining Rp10 Billion will be withheld. This goes against what actually transpired when funds from BNI were illegally transferred from BNI Loan, in an illegal Bangkok bank account opened in the name of WBS, which the minorities never had knowledge nor approved. [25] The Defendants impressed on the fact that the Plaintiffs did not oppose this idea as the Plaintiffs instead, were keen to eject out as shareholders of WBS. By contrast, the directors of WBS (acting on the majority decision of the board of directors of WBS as deposed by Jason Kang in enclosure 6) had explored this idea by meeting with the investors introduced by AKS and had opportune the representatives of the Bangkok Bank with a visit to the farms of WBS, knowing no banks would be interested to offer funds to WBS without the involvement of PT AAK in the said JV for the purpose of facilitating a local guarantor in the said funding by the bank. 13 S/N i3Sr/9lTf0iNEF36bNHeHQ **Note : Serial number will be used to verify the originality of this document via eFILING portal [26] The proof to this allegation by the Plaintiffs of refuting knowledge can be found in the Director’s Circular Resolution dated 21.10.2020 and 26.11.2020 (see: “HKK-15” enclosure 7 of 2nd Plaintiff’s ‘AIR’) for the opening of the account with Public Bank Berhad and Bangkok Bank Berhad respectively, and absence of the Plaintiffs’ signature on the said resolutions to support the contention of no knowledge on their part. [27] It is not disputed that this DCR was never circulated to the Plaintiffs and therefore the Audited Financial Statement for the financial year ending 30.6.2021 relied upon by the Defendants to have been approved by the Plaintiffs on 30.12.2021 as exhibited in enclosure 6 “KKY-6” (it should read “KKY-4”) appears to miss the ‘Independent Auditors Report’ reflected as pages 31-34. The AFS that was circulated and exhibited missed this very important information. [28] The totality of what had transpired with the intention to exit by the Plaintiffs, moved the Plaintiffs to execute the legal documentation for the 51% Take-Over by PT AKK. This, the Court views it as a logical and rational explanation as to why the Plaintiffs made the said move to executing the said documents which the Defendants regarded it as an inference of an act of endorsement towards agreeing to those transaction. Whether a case of Oppression proven and Court’s finding [29] Based on the facts above, the findings made by this Court are as follows: i. The delegation of the tasks to Jason Kang to negotiate and discuss on behalf of the 7th Defendant without any resolution by the 7th Defendant being shown; 14 S/N i3Sr/9lTf0iNEF36bNHeHQ **Note : Serial number will be used to verify the originality of this document via eFILING portal ii. The straightforward view taken by the Defendants on the queries raised by the Plaintiffs pertaining to the draft conditional JV agreement without full and further engagement with the Plaintiffs, demonstrates the stand by the Defendants of ‘majority rule’ going against the Plaintiffs strong believe that WBS ought to be in full control heading future; iii. The application of the majority rule principle as against the minority in the 7th Defendant that goes against the purpose of setting up the 7th Defendant; iv. There was evidence to support absence of knowledge on the part of the Plaintiffs on the opening of accounts with the Public Bank Berhad and Bangkok Bank Berhad for want of affirmation of the DCR by the Plaintiffs; v. The transfer of the funds from BNI to PT SMS then diverted, amongst others to KJSCSB of the Defendants before finding its way back to PT SMS account, a fact not disputed by the Defendants save it was said to be a repayment of loan from WBS to KJSCSB (see: para 46 AIS Plaintiff HKK enclosure 3 and para 45 AIR Defendant Jason Kang enclosure 6) but yet, absence of such notice to the Plaintiffs. The principles in a section 346 of the Act [30] With these facts extracted above, it is next crucial to lay down the principles found in the case authorities pertaining to section 346 (or formerly section 181) of the Act. In Pan-Pacific Construction Holdings Sdn Bhd v Ngiu-Kee Corp (M) Bhd & Anor [2010] MLJU 269; [2010] 6 CLJ 721, Richard Malanjum CJSS (later CJ) held that exercise of powers of the directors in an oppressive manner, with disregard of its interests qualifies as a case under section 181 when he said as follows: 15 S/N i3Sr/9lTf0iNEF36bNHeHQ **Note : Serial number will be used to verify the originality of this document via eFILING portal “[25] Therefore, in order to succeed in its petition pursuant to s 181 the petitioner has to establish and ‘must eminently be determined according to the facts’ of this case that the affairs of the company are being conducted or that the powers of the directors are being exercised in an oppressive manner or in disregard of its interests, or to its prejudice some unfairly discriminatory or prejudicial act of the company has been done or threatened, or that some resolutions of the members, debenture holders or any class of them has been passed or is proposed to be passed. [26] In other words s 181 permits judicial remedy on four categories of conduct, namely, oppressive conduct, conduct in disregard of interests, unfairly discriminatory conduct or prejudicial conduct. [27] It may also be noted that from the wordings of s 181 its basic theme is ‘unfairness’. However, unfairness ‘does not mean that the court can do whatever the individual judge happens to think fair. The concept of fairness must be applied judicially and the content which it is given by the courts must be based upon rational principles. ‘The court … has a very wide discretion, but it does no sit under a palm tree’ (see: O’Neil v Philips [1999] 2 All ER 961)”. [31] V C George J (later JCA) in Chan Choon Ming v Low Poh Choon & Ors [1994] MLJU 351; [1995] 1 CLJ 812 on the power to act of a Director and Board as collective said as follows: “Article 90 which is one of the articles under the general heading ‘Proceedings of Directors’, has to be read in the context of the principle that the powers conferred upon directors are conferred on them collectively as a board. In that context, it is inconceivable that 16 S/N i3Sr/9lTf0iNEF36bNHeHQ **Note : Serial number will be used to verify the originality of this document via eFILING portal notice of an intended resolution of the directors need not be given to every member of the board. If upon the majority signing such a resolution it is not necessary to pass it on to the others who are present in the country there could be a situation of a company being managed, not by the board, but by a clique, no doubt consisting of the majority of the board, using article 90 type of resolutions and leaving the minority completely in the dark as to what is happening in and to the company. It cannot then be said that the business of the company is managed by the directors (as provided by article 73). In Pulbrook v Richmond Consolidated Mining company [1878] 9 Ch D 610, 612, what Jessel MR, said, in dealing with the case of a director who was improperly and without cause excluded from meetings of the board, is I think applicable to a director kept in the dark in respect of an article 90 resolution. He said: He has been excluded. Now, it appears to me that this is an individual wrong, or a wrong that has been done to an individual. It is a deprivation of his legal rights for which the directors are personally and individually liable. He has a right by the constitution of the company to take a part in its management, to be present, and to vote at the meetings of the board of directors. He has a perfect right to know what is going on at these meetings. It may affect his individual interest as a shareholder as well as his liability as a director, because it has been sometimes held that even a director who does not attend board meetings is bound to know what is done in his absence. 17 S/N i3Sr/9lTf0iNEF36bNHeHQ **Note : Serial number will be used to verify the originality of this document via eFILING portal In my judgment to make article 73 meaningful and to give effect to the collective responsibility of the board, although all that is required for an effective Art 90 resolution is that it be signed by the majority, it must be taken as implied that every member of the board has to have the resolution circulated to him or her before it can be accepted as a directors’ resolution. Which is why in board room parlance, an article 90 type of resolution is usually referred to as a circular resolution. Each of the said resolutions, notice of which was not given to the plaintiff, is, in my judgment, ineffective”. [32] In Gua See Sew & Ors v Heng Tang Hai & Ors [2020] MLJU 46, it was held that management operations of the company and specifically so the opening of bank account without the knowledge of the minority fits into act of oppression under section 346 when it says as follows: “... under s.346 for oppression has been made out when there w[h]ere changes of critical management operations within the company such as change of company secretary and change of bank signatories by the oppressors without the knowledge of the minority”: [67] Even before the filing of the OS 168, the 1st. and 2nd. Defendants have carried out a series of acts to completely exclude the Plaintiffs from the management of the company. These include: The 1st and 2nd Defendants surreptitiously caused the company secretary (Law Cheok Yin) to resign on 12.3.2019 and appointed a new company secretary on the same date. This change was done without the Plaintiffs’ knowledge and consent. As a result, the former company secretary was 18 S/N i3Sr/9lTf0iNEF36bNHeHQ **Note : Serial number will be used to verify the originality of this document via eFILING portal unable to provide any documents to the Plaintiffs as the books and records have been handed over to the new company secretary. … The 1st and 2nd Defendants surreptitiously instructed Alliance Bank to remove the Plaintiffs as authorized signatories for G&P Structures’ Alliance Account. The Plaintiffs were never informed of the change. The Plaintiffs wrote to the Defendants and the bank on 18.4.2019 to protest about the change of signatories. On 19.4.2019, the 1st and 2nd Defendants caused a legal firm i.e. Messrs Gan, Lee & Tan, to write on behalf of G&P Structures to respond to the Plaintiffs’ letter stating that the change of bank signatories was made pursuant to a board of directors’ resolution. The Plaintiffs were not made aware of such board of directors’ resolution. [Emphasis added.] [68] The aforesaid conduct by the 1st. and 2nd. Defendants are clearly a breach of the Plaintiffs’ legitimate expectation that they have the right to participate in the management of the company and in disregard of the Plaintiffs’ interests as the beneficial owners of the shares. Given that throughout the years, the 1st and 2nd Defendants have always recognized and acknowledged the Plaintiffs’ rights and interest under the Company Policy and the Shareholders’ Agreement in relation to the affairs of G&P Structures, the conduct is oppressive and come within the section 346(1) of the CA 2016”. [33] A pertinent case on point quoted by the Plaintiffs is the case of Lim Kah Keng v Teng Taim Sing & Ors [2021] MLJU 1903 where it was held 19 S/N i3Sr/9lTf0iNEF36bNHeHQ **Note : Serial number will be used to verify the originality of this document via eFILING portal that the exclusion of minorities from management without an exit offer is a clear oppression when quoted the following with approval: “[48] In Tob Chee Hoong v Tob Chee Choong & Ors [2017] 1 LNS 1256, Mohd Nazlan Mohd Ghazali J held that exclusion from management without an exit offer is clear oppression: “[105] Even if my assessment on the plaintiff having successfully proven oppression is less than accurate, I would additionally rely on that House of Lords decision of O’Neill v. Phillips which is also an authority for the proposition that any such exclusion from management would still not be construed as being unfairly prejudicial if the majority make a fair and reasonable offer to buy out the minority. This makes much practical sense for where relationship of trust and confidence has broken down, and where oppressive and prejudicial conduct is apparent, there may not necessarily be oppression in the sense stated in the statute book if a genuine, fair and reasonable buy-out offer is made to the complainant who would probably welcome the exit option. [106] However, there is no hint of any offer in this case made by either the first, second or third defendant. This manifestly is oppressive, when taken together with the entire series of conduct and decisions taken by them in sidelining the plaintiff in the fourth defendant and their removal of the plaintiff from the management of Orchard Circle. The plaintiff was clearly made to feel unwelcome in the fourth defendant as a director and shareholder. Yet the defendants steadfastly refused to permit any buy-out of the plaintiff’s stake in order to facilitate the plaintiff exiting the group. The plaintiff is 20 S/N i3Sr/9lTf0iNEF36bNHeHQ **Note : Serial number will be used to verify the originality of this document via eFILING portal thus caught in a most unenviable position. Internally he has to put up with challenges brought about by the defendants, especially his nephews. But his attempt to get them buy his shares, as he pleaded in his originating summons went wholly unheeded.” [49] Further in the case of Rahya Trading Sdn Bhd v Tong Khin Company Sdn Bhd & Anor [2014] 5 CLJ 726, the decision of the Plaintiff in wanting to leave the company was held to be reasonable and fair as the company itself was no longer involved in any business. It was held that to require the Plaintiff to remain as shareholder to venture into other businesses, which are still undecided is not the bargain the Plaintiff entered into with the company. It was further stated in that case that the rejection by the company is evidence of oppression on the part of the company against the Plaintiff as it is fully aware that it was not engaging in any business at that point of time but yet it refused the reasonable proposal by the Plaintiff to sell its shares”. [34] Based on all these authorities applied to the facts as summarized and found by this Court in paragraph 29 above, the conclusion by this Court is a case of oppression proven with the Plaintiffs being the minority shareholder ‘locked-in’ the 7th Defendant and allowed all reliefs including on a buy-out and Plaintiffs permitted an exit out of the 7th Defendant as sought in paragraph 1 of this judgment, with the exception of relief (c). Relief (c) is excluded on the basis that the declaration if allowed will be in breach of the ‘Audi alteram partem’ principle ‘the right to be heard’ as except the Defendants, no representative from PT Adau Agro Kalbar was present before the Court to argue otherwise. The Plaintiffs despite arguing 21 S/N i3Sr/9lTf0iNEF36bNHeHQ **Note : Serial number will be used to verify the originality of this document via eFILING portal that section 346 confers the Court with wide power, candidly did not push for this relief. [35] As to the alternative prayer in (i) to other reliefs in (e), (f), (g) and (h) pleaded by the Plaintiffs to declare the 7th Defendant be wound up which was granted by this Court, there is no confusion as alleged by the Defendants as to which relief takes priority as firstly relief (i) is a relief sought by the Plaintiffs as a last resort only if there is failure on the part of the Defendants to comply and satisfy with the order granted in relief (e) to (h). Secondly, for an application to wound up the 7th Defendant by this Court, it must be followed with the necessary procedure under the Companies Act and Winding-Up Rules. It is not merely a relief to make a declaration for the 7th Defendant to be pronounced and declared ‘wound up’. [36] Furthermore, relief (i) is only triggered subject to certain primary actions in relief (e) to (h) on the buy-out requirement that must be complied with by parties and subject to the willingness on the part of the Defendants to follow through with the said order, before it can be said relief (i) comes to life and be invoked. This is further demonstrated in the affidavits by the Plaintiffs stressing on all the reliefs as in (e) to (h). For these reasons, with the exception of relief (c), all the reliefs sought are allowed. Signed (NURULHUDA NUR’AINI BINTI MOHAMAD NOR) Judge High Court of Malaya Johor Bahru Dated: 22nd January 2024 22 S/N i3Sr/9lTf0iNEF36bNHeHQ **Note : Serial number will be used to verify the originality of this document via eFILING portal COUNSEL For the Plaintiffs: Ryan Chu Soon Wei Lau Zhong Yan (Samantha Au Yong Chi Yan Yap Rui Xuen (PDK) bersamanya) Messrs. Tuang, Chu & Co Advocates & Solicitors A-G-23A, Menara Prima Jalan PJU 1/39, Dataran Prima 74301 Petaling Jaya Selangor Darul Ehsan For the Respondents: Yap Chee Kai (Tania Pillai a/p Velasamy bersamanya) Messrs. Lee & Tengku Azrina Advocates & Solicitors Unit 13-01, Level 13, Menara Landmar 12 Jln Ngee Heng 80000 Johor Bahru 23 S/N i3Sr/9lTf0iNEF36bNHeHQ **Note : Serial number will be used to verify the originality of this document via eFILING portal