A Ganasan A/L K Arumugam v Syed Yusof Bin Syed Mohd (BA-24NCC-113-10/2025)

A GANASAN A/L K ARUMUGAM [NRIC No.: 730813105753]

ABDUL HAFIZ BIN ABDUL RASHID @ ABD KHALID [NRIC No.: 860522566491] … PLAINTIFFS AND SYED YUSOF BIN SYED MOHD [NRIC No.: 810822075349] … DEFENDANT GROUNDS OF JUDGMENT

This judgement involves a dispute between shareholders of VSD Automation Sdn. Bhd. The Plaintiffs, A Ganasam A/L K Arumugam and Abdul Hafiz Bin Abdul Rashid @ Abd Khalid, are seeking various reliefs, including an injunction to restrain the Defendant, Syed Yusof Bin Syed Mohd, from convening an Extraordinary General Meeting (EGM) and a declaration that certain EGM notices are invalid. The Plaintiffs allege oppressive conduct by the Defendant, who is the majority shareholder and Managing Director.

The Defendant, in his defence, denies the allegations of oppression and argues that the Plaintiffs'' claims are based on a false premise. He asserts that the shareholding structure and his role in the company were established through legitimate means, and that the Plaintiffs'' actions, such as attempting to convene EGMs and proposing resolutions to remove directors, are within his statutory rights as a majority shareholder.

This judgement concerns three (3) applications namely: - I. Enclosure 1, the Originating Summons filed by the Plaintiff under Section 346 of the Companies Act 2016: II. Enclosure 47 filed by the Defendant to set aside and or vary the injunction order granted on the 30.10.2025 by this court. III. Enclosure 54, the recusal of the Plaintiff’s solicitors by the Defendant.

During the hearing of all 3 applications on 18.12.2025, this court directed parties to file further submissions to the new issues raised by the Defendant. The court notes that some of these issues were raised for the first time, by Defendant during the counsel’s oral submissions. These issues were not pleaded or raised specifically in any of the affidavits filed by the Defendant in reply, primarily to Enclosure

The Plaintiffs argued that the general rule, that there should not be any element of surprise.

Subsequently, the court observed that there were factual disputes raised orally, as well as rebuttal arguments by both counsels during the hearing. To prevent miscarriage of justice, especially where affidavits alone cannot conclusively resolve those factual disputes, this court maintains its judicial discretion to address these conflicts.

In conclusion, this court directed the parties to file further and additional written submissions based on both counsels’ respective arguments.

The disagreement between the Plaintiffs and Defendant stemmed from the overall management of the Company, resulting in a strained and tensed working environment. The Defendant consequently opted to work remotely and considered selling his shares subject to a fair valuation. However, the initial offer of RM5 million for the Defendants shares, were regarded as unreasonably low given the Company’s 2024 profit of approximately RM10 million, total assets of about RM106 million, and its 14-year business standing and good will.

Consequently, both parties were in total disagreements as to the day-to-day running of the company and the Defendant alleged that he was completely excluded from the management meetings. On 11 September 2025, the Defendant requested the former company secretary to convene an Extraordinary General Meeting (“EGM”) to discuss the Company’s direction and share valuation.

The Defendant later discovered that Plaintiffs and two (2) other Directors had passed a resolution on 30 September 2025 to remove the Defendant as an authorised signatory of the Company’s accounts. In light of the continuing exclusion and lack of transparency, the Defendant proposed that an EGM be convened on 28 October 2025 to remove all other Directors and to restore proper governance and accountability within the Company.

As at all material times, the Company has an issued share capital of 10,000,000 shares. The present shareholding structure as at June 2025 is as follow based on the SSM search dated 29.08.2025:-

The primary legal basis for the Plaintiff’s claim is pursuant to Section 346, of the Companies Act 2016, namely an oppression action. It empowers the Court to grant relief where the affairs of a company are conducted in a manner where the majority shareholders or directors act unfairly prejudicial, discriminatory, or disregards the interests of minority shareholders.

The key elements to establish oppression under Section 346 are: a) The affairs of the company are being conducted in a manner oppressive, unfairly prejudicial, or unfairly discriminatory against a member. b) The conduct departs from the standards of fair dealing and violates the legitimate expectations of the member. c) The conduct is targeted directly and specifically against the minority shareholder, resulting in injury to them in their personal capacity.

The Defendant’s objections for the Plaintiffs Application in Enclosure 1 is mainly on the following: -

Illegality

Non-Joinder of Parties Illegality 14. The Defendant argues that the Plaintiffs’ claim is founded on an illegal Ali Baba arrangement, where shares were allegedly transferred to satisfy Bumiputera requirements, which is contrary to public policy and Section 24 of the Contracts Act 1950. Court’s View 15. The Defendant relied on the cases of like Kondapuram Raghuram and Norman Disney to support these contentions: - I. Kondapuram Raghuram v Soo Peng @ Yew Soo Peng [2006] 7 MLJ 510 II. Norman Disney & Young v Affifi bin Hj Hassan [2014] 1 MLJ 236

On this point, the Court observes, that the Plaintiff’s claim here is pursuant to Section 346 of the CA 2016, which is based on the Defendant’s alleged oppressive conduct in attempting to remove directors and seize control by calling for an EGM. This suit filed by the Plaintiffs is not to enforce any issues regarding illegal arrangement as in Enclosure 1.

The Court finds that the Defendant has failed to establish that the Plaintiff’s claim is fundamentally founded on illegality that would bar relief under this application. The cases cited by the Defendant, mainly Kondapuram Raghuram and Norman Disney are distinguishable as they involved claims directly seeking to enforce illegal agreements. Non-Joinder of Parties 18. The Defendant argues that the Company and other minority shareholders, were not joined as parties to the proceedings, and therefore, the Court lacks jurisdiction to grant the reliefs sought, particularly concerning the restoration of shareholding structure. Court's View

The Court acknowledges the general rule that orders cannot be made against non-parties. However,any proceeding under Section 346 of the CA 2016 are primarily concerned with the conduct between the complainant shareholder and those in control. The Court has discretion to grant relief even without the formal joinder of all parties, especially when the oppression is directed towards the Plaintiffs by the Defendant.

The Court finds that the absence of the Company and other minority shareholders as formal parties does not deprive the Court of jurisdiction to address the alleged oppression between the Plaintiffs and the Defendant. The reliefs sought can be fashioned to address the oppression without necessarily binding absent parties in a way that prejudices their rights.

In the case of Trudy Ranjini Ganendra v Dennis Ganendra & Anor [2022] 1 LNS 3338, the courts held that the non-joinder of other shareholders does not deprive the Court of jurisdiction in oppression proceedings.

The case of Concrete Parade Sdn Bhd v Apex Equity Holdings Bhd & Ors [2021] 9 CLJ 849 held that the Court’s power under Section 346(2) is wide and flexible, allowing it to fashion appropriate remedies even if not specifically prayed for.

Furthermore, the case of Lee Yee Wuen v Lee Kai Wuen & Ors [2020] MLJU 1902 supports the Court’s broad powers under Section 346(2) to grant relief beyond what is prayed for. THE LAW Courts Analysis of Oppression Claim 24. The Plaintiff’s action provides a remedy for members who have suffered unfair prejudice or oppressive conduct. The core of the Plaintiff’s case rests on demonstrating that the Defendant’s actions have been:

Oppressive: Conduct that is burdensome, harsh, or wrongful, or that unfairly prejudices a member.

Unfairly Prejudicial: Actions that unfairly discriminate against or are otherwise prejudicial to a member.

Disregard of Interests: Conduct that disregards the interests of a member.

In the case of Low Cheng Teik & Ors v Low Ean Nee & Ors [2024] 9 CLJ 171, the Federal court held that: - [67] The oppression remedy is presently governed by section 346 of the Act. More particularly, section 346(1) reads as follows: “346 Remedy in cases of an oppression

(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.” [Emphasis added] [68] It is clear from the express wording of section 346(1) that relief under this provision is available to a member and the member sues for relief in their own right to protect their interests qua member. [69] More specifically, section 346(1) envisages oppressive conduct as being established in four circumstances:

(i) Limb (a) of section 346(1) refers to the conduct of the affairs of the company or the exercise of the powers of the directors in a manner that is either oppressive “to one or more of the members” or in disregard of “his or their interests as members” ; and

This Federal Court case, establishes that oppression requires conduct that causes direct, immediate, and distinct harm to the minority shareholder, not merely reflective loss suffered by the company. It also highlights that misconduct targeting the minority or benefiting the majority at the expense of the minority is actionable.

The Defendant’s actions, as detailed in the Plaintiff’s affidavits and the Company’s own documents, strongly suggest a pattern of conduct that aligns with oppressive behaviour as contemplated by Section 346 of the Companies Act 2016. Equal Participation and Understanding:

The court would agree with the Plaintiffs that the Company was operated on a mutual understanding of parity in management and control between the 1st Plaintiff and the Defendant. This is evidenced by their historical shareholding, joint personal guarantees for financing, and the initial 50:50 shareholding position.

In my opinion, the Plaintiffs have presented substantial volume of evidence including contemporaneous documents and communications, to support their claim of a long-standing understanding of equal participation and control between the parties. The Defendant’s own actions, such as expressing an intention to exit, engaging in share valuation discussions, and later attempting to remove directors, contradict his own actions and undermine the Plaintiff’s legitimate expectations. Abuse of Majority Power:

The Defendant’s attempt to convene EGMs with the primary purpose of removing the Plaintiffs and their allies from the Board, while appointing his own nominees, demonstrates a clear abuse of his majority shareholder status. This action, if successful, would effectively alienate the minority shareholders and eliminate any checks and balances on the Defendant’s power. Breach of Fiduciary Duty:

The Defendants allegations of the unauthorized transactions and the lack of proper justification for payments to Adinur Enterprise raise serious concerns about the Defendant’s responsibility and adherence to his fiduciary duties to act in good faith and in the best interests of the Company.

The documentary record shows that the payment was a routine, approved, and properly supported vendor transaction, processed within the Company’s established financial workflow.

Based on the evidence presented in the affidavits and supporting documents, there is a strong prima facie case that the Defendant has engaged in conduct that is oppressive and unfairly prejudicial to the Plaintiffs, in their capacity as shareholders and directors of the Company.

The Defendant’s actions appear to be aimed at consolidating unilateral control, excluding the Plaintiffs from management, and potentially mismanaging the Company’s finances, all of which are contrary to the principles of good corporate governance and the protections afforded to minority shareholders under Section 346 of the Companies Act 2016.

The Plaintiff’s application in Enclosure 1 is hereby allowed in terms of the prayers sought in the Originating Summons.

It is therefore ordered that the Notice of Application dated 21.11.2025 in Enclosure 47 and Notice of Application dated 25.11.2025 Enclosure 54 filed by the Defendant herein be struck out with cost to Plaintiffs for RM15,000.00. Dated : 6 March 2026 sgd SHOBA DORAI RAJAH JUDICIAL COMMISSIONER SHAH ALAM HIGH COURT Solicitor for the Plaintiffs: Ranjit Kaur with Elyna Madeonus [MESSRS A S DHALIWAL (KUALA LUMPUR)] Solicitor for the Defendant: Nadesh Ganabaskaran with Azri Malek Haron, Nasriyah [MESSRS MALEK, GAN & PARTNERS (KUALA LUMPUR)]