1. ) Dato' Sri Gandi A/L Muthusamy v Venkateswara Rao A/L Krishnan (WA-22NCC-188-05/2022)

FWG GLOBAL SDN BHD [Company No.: 369624]

SARASVATHY A/P GOPALU [NRIC No.: 710113055160]

CHANDRAKUMANAN A/L ARUMUGAM [NRIC No.: 611111085215]

CITY HEALTH CARE CLINIC SDN BHD [Company No.: 1317485W] …DEFENDANTS (Heard Together With) IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE FEDERAL TERRITORY, MALAYSIA (COMMERCIAL DIVISION) SUIT NO.: WA-22NCC-188-05/2022

DATO' SRI GANDI A/L MUTHUSAMY [NRIC No.: 661015055425]

FWG GLOBAL SDN BHD [Company No.: 369624-X]

Datin Sri Sarasvathy A/p Gopalu [NRIC No.: 710113055160]

Datuk Chandrakumanan A/l Arumugam [NRIC No.: 611111085215] … PLAINTIFFS AND VENKATESWARA RAO A/L KRISHNAN [Identity Card No.: 670729086359] …DEFENDANT JUDGMENT Introduction [1] On 11.5.2022, Dr Venkateswara Rao (“Dr Rao”) filed a minority oppression action under s 346 of the Companies Act 2016 vide the Originating Summons No. WA-24NCC-655-05/2022 against FWG Global Sdn Bhd (“FWG Global”), Datin Sri Sarasvathy a/p Gopalu (“Datin Sri Sarasvathy”), Datuk Chandrakumanan a/l Arumugam (“ Datuk Chandrakumanan”) and City Health Care Clinic Sdn Bhd (“CHC”) seeking an order that FWG, Datin Sri Sarasvathy and Datuk Chandrakumanan do purchase all his 576,000 shares in CHC at the market value or alternatively for CHC to be wound up (“OS 655”). [2] OS 655 was in fact filed two days after Dato’ Sri Gandhi a/l Muthusamy (“Dato Sri Gandhi”), FWG Global, Datin Sri Sarasvathy and Datuk Chandrakumanan had filed the civil suit WA-22NCC-188- 05/2022 against Dr Rao for an order of specific performance of an agreement reached on 28.11.2020 where Dr Rao had agreed to transfer all his 576,000 shares in CHC to Dato’ Sri Gandhi or his nominees for RM 1 million (“Suit 188”). [3] As the defences raised by Dr Rao in Suit 188 are substantially the same as the issues raised by him in OS 655 as grounds for his oppression action, sometime on 27.7.2022, an order was made by the Court in OS 655 for the action to be consolidated with Suit 188 and for OS 655 to be heard together or heard after Suit 188. [4] At the date of the trial of Suit 188 before this Court, counsel for the parties agreed for Suit 188 to be proceeded with and for counsel to put in their respective written submissions in respect of the Suit 188 together with the written submissions for OS 665 (which would proceed based solely on affidavits filed without any cross examination of the deponents) for this Court’s consideration. The determination of the issues in Suit 188, where relevant, will be binding on the parties in OS 655. [5] After perusal of the relevant cause papers, written submissions filed and upon hearing the oral submissions by learned counsel for the parties, I allowed the claims in Suit 188 and dismissed the OS 655 with costs. [6] In this judgment, I shall first set out my grounds for Suit 188 and thereafter I shall deal with the OS 655. The parties shall be referred to as the “Plaintiffs” and the “Defendants” in their original capacities as expressed in the respective legal proceedings. [7] The OS 655 has brought to the fore the novel legal question whether a bare trustee of shares, whilst being a registered shareholder of a company, has the locus standi to bring an action for oppression under s 346 of the Companies Act 2016. SUIT NO.: WA-22NCC-188-05/2022 (“Suit 188”) Background Facts [8] Sometime between Mac to June 2019, the Defendant (Dr Rao) held discussions with the 1st Plaintiff (Dato’ Sri Gandhi) with the view for the 1st Plaintiff to invest and become a shareholder of City Health Care Sdn Bhd (No. Company: 201901008157 (1317485-W)) (CHC), which operates a medical clinic business at Lot 2-02, Level 2, Menara HLA No. 3, Jalan Kia Peng, 50450 Kuala Lumpur. [9] During the discussions, the Defendant had represented to the 1st Plaintiff that: a) he owned 20 clinics out of which he had sold 17 clinics and he was still managing the remaining 3 clinics; b) the clinics were managed by licensed doctors and his wife was also assisting in the management of the clinics; c) CHC has a few existing panel clients; d) he would protect CHC’s interest and would not place himself in a conflict of interest position although he is running other clinics as well. [10] The Defendant further represented that CHC was worth around RM2.4 million, that CHC owned a lab worth around RM1.5 million, was fully equipped with, inter alia, X-ray, Mammogram and stress test facilities. [11] Pursuant to the aforesaid, an agreement dated 14.8.2019 between the following parties was entered: a) FWG Global (2nd Plaintiff) and Datin Seri Sarasvathy (3rd Plaintiff) as Group A, b) the Defendant as Group B; and c) Datuk Chandrakumanan as Group C (4th Plaintiff) as Group C. (“the Partnership Agreement”) [12] It was agreed that Group A was to pay a sum of RM600,000.00 as allotment of new CHC shares and RM400,000.00 as working capital for CHC, totaling RM1 million. The fact that RM600,000.00 was paid by the Plaintiffs for the allotment of shares and RM400,000.00 was paid for working capital are agreed facts. [13] The paid-up capital of CHC was increased from 500,000 shares to 1,200,000 shares. It was agreed that Group A and Group B would be holding equal shares in CHC and both Group A and Group B would give 2% of their respective shares to Group C, the 4th Plaintiff as he would be managing the business of CHC. Thus, the respective shares of each parties after the allotment of shares are as follows: The Defendant 576,000 shares [48%] FWG Global Sdn Bhd 372,000 shares [31%] Datin Sri Sarasvathy a/p Gopalu 204,000 shares [17%] Datin Sathiyavani a/p Palaniandy 48,000 shares [4%] (the 4th Plaintiff’s wife) For completeness, the Defendant was supposed to pay RM 100,000.00 as additional capital but it is not in dispute that he did not do so. [14] Clause 2(f) of the Partnership Agreement states that Group A’s investment is subject to a precondition that CHC obtains a valid ACC license from the Ministry of Health. Until the ACC license is obtained, any investment by Group A shall be considered as personal loan to the Defendant which sum shall be recovered as such by Group A. [15] In addition to the investment into CHC, the 1st Plaintiff also provided a loan to the Defendant who informed the 1st Plaintiff that he needed a sum of RM1.2 million to settle his personal debts. [16] Based on the Defendant’s request, the 1st Plaintiff advanced to the Defendant the sum of RM 1 million with the Defendant providing his property registered under HS(D) 124078 PT No. 1571 Mukim Damansara, Petaling Selangor (“the Damansara Property”) as security for the loan. The Defendant represented that the market value of the Damansara Property was RM4.85 million and the same was at the material time charged to Affin Bank Berhad for an outstanding sum of RM3,242,270.89. [17] As security for the 1st Plaintiff’s loan for the RM 1 million loan, the Defendant allowed the 1st Plaintiff to lodge a private caveat on the Damansara Property. [18] The 1st Plaintiff informed the Defendant that if he wanted to borrow an additional sum of RM200,000.00, the Defendant would need to secure another property valued at approximately RM600,000.00. However, as the Defendant did not produce any property, the 1st Plaintiff only gave the said loan of RM1 million to the Defendant. [19] The friendly loan of RM1 million was paid out by the 1st Plaintiff from his own CIMB account to his lawyer, Messrs Shariff & Khoo on 6.8.2019. Messrs Shariff & Khoo then issued an Alliance Bank cheque No. 000556 dated 7.8.2019 for the sum of RM900,000.00 and a further Alliance Bank cheque No. 000549 dated 7.8.2019 for a sum of RM100,000.00 to the Defendant. Both cheques were cleared by the Defendant. [20] Subsequent to the investment and the loan, the Plaintiffs discovered: a) the Defendant had rented the premises where CHC was operating through his own company, Swiss Capital Sdn Bhd and the said company had failed to pay the outstanding rentals amounting to RM134.154.81. After the Plaintiffs stepped in to the management of CHC, they had to negotiate with the landlord in order for them to continue renting the premises to CHC, they also had to pay a sum of RM298,410.00 as bank guarantee for future payment of rentals. The landlord also required a top up of an additional sum of RM66,885.00 as deposit and a further outstanding rental of RM7,316.90 had to be settled; b) CHC does not own the lab as represented by the Defendant. In fact, the lab was renting part of the premises from CHC; c) many of the equipment were obsolete and in poor condition resulting in CHC having to purchase new machines and equipment. [21] The 1st Plaintiff also repeatedly requested for marketing proposal from the Defendant as CHC was making losses. In fact, the Defendant had requested the Plaintiffs to invest more money in the company. [22] As at 8.11.2019, the Plaintiffs had released RM1,908,410.00 into CHC and a further sum of RM337,710.00 to be released, totaling RM2,246,120.00 which exceeded the investment amount of RM2.2 million. On top of that, the Defendant still requested a further sum of RM200,000.00. Indeed, the 1st Plaintiff raised his concerns to the Defendant via his email dated 8.11.2019. [23] All these events led to a Board of Director’s meeting held on 20.5.2020 where the 1st Plaintiff expressed concerns about the payments made by the Plaintiffs and the high expenses for the clinic. Two options were given to the Defendant: a) Option 1 - the Plaintiffs would pull out as investors and directors, and CHC to settle the shareholding funding of RM2 million and the additional loan of RM257,000.00; b) Option 2 - all future funding for CHC’s operation would be borne by the 1st Plaintiff and the Defendant on a 50%-50% basis. [24] However, the parties were unable to reach a consensus. The meeting was adjourned and parties agreed to discuss further at the next meeting. [25] At the next Board of Directors’ meeting on 24.5.2020, the 1st Plaintiff agreed to fund the clinic business but subject to, inter alia, the following conditions: a) the Defendant agreeing to give a 100% commitment to CHC and to act in the best interest of the company as the Defendant had spent most of his time at his own clinic, Klinik Sri Prima and had approached CHC’s patients to visit his own clinic. b) the Defendant agreeing to work in a transparent and professional manner and to ensure no conflict of interest which would implicate CHC operationally and financially. [26] Another Board of Directors’ meeting was held on 7.6.2020 where there were discussions either for new shareholders to be brought in to settle the sum of RM3.2 million to 1st Plaintiff (“1st Proposal”) or for the Defendant to remain as shareholder but to resign as company’s director, remaining as a medical director for the purpose of using his name for the medical related licenses and ACC license for which he would receive a remuneration of RM2,500 per month for 1 year (June 2020 to May 2021) and RM5,000 (June 2021 onward) provided that the company is profitable (“2nd Proposal”). [27] The Board of Directors, including the Defendant, unanimously agreed to the 2nd Proposal. The Board of Directors also resolved that the 1st Plaintiff would be appointed as the executive director of the company and the decision maker with immediate effect. [28] It is not in dispute that pursuant to the aforesaid Board of Directors’ aforesaid meeting, the Defendant tendered his resignation as a director of CHC. [29] However, as the operation of CHC remained unsatisfactory, sometime on 28.11.2020, an extraordinary general meeting of CHC was convened (“the EGM”). At this EGM, two options were discussed: Option 1 The 1st Plaintiff asked for RM3.1 million in lieu of all the investment and shareholdings in the company for which, the Defendant counter-offered a sum of RM2.5 million. Option 2 The Defendant was willing to let go his 576,000 shares in CHC for RM1.3 million for which the 1st Plaintiff had countered offered RM 1 million. [30] After considering both options, the Defendant accepted Option 2 and agreed to give up his 576,000 shares in CHC at RM 1 million. The company secretary was directed to prepare the relevant transfer documents to effect the transfer. [31] The 1st Plaintiff is contending that the RM1 million to be paid to the Defendant as consideration for his 576,000 shares in CHC was settled through a set-off from the personal loan of RM 1 million that the 1st Plaintiff had given to the Defendant alluded above. [32] In addition to the transfer of the Defendant’s 576,000 shares in CHC, the Defendant also agreed for CHC to continue to use the Defendant’s medical license for its business and that the Board of Directors would undertake the responsibility to apply for a new medical license within 4 months. In the meantime, CHC agreed to pay the Defendant (as agreed in the previous Board of Directors’ meeting) for utilization of the Defendant’s license. [33] As the RM1 million loan was being set-off for the shares transfer, the 1st Plaintiff also agreed to withdraw his private caveat over the Damansara Property. Indeed, the caveat was removed on 25.10.2021. There was a delay as the Defendant had failed to produce the receipt for the assessment for the said property [34] The Plaintiffs contended that the fact as regards the set-off from the RM1 million personal loan has been confirmed by the Defendant in writing vide an email dated 30.3.2021 where the Defendant stated thus: “I wish to highlight that till todate the agreed issues during the EGM held on 28/11/2020 are yet to be fulfilled. Among other matters, the following issues were agreed and promised during the EGM on 28/11/2020:-

A sum of RM2,500 per month as my Medical Director’s Fees will be remunerated to effective from date of incorporation of CHC;

The removal of caveat on property addressed at No. 29, Jalan PJU 1A/33, Ara Damansara, 47301 Petaling Jaya, Selangor;

That I shall relinquish my shares from City Health Care Sdn Bhd (CHC) without any consideration given to myself;

That I have tendered my resignation as Medical Director effective from 30/10/2020 from CHC and I am not involved in any company matters or decision making;

That I shall not whatsoever involved in the management, procurement, accounts controlling and etc of CHC effective from 28/11/2020 as agreed amicably on 28/11/2020. It is within your kind attention that all the above agreed issues have been envisaged and minuted during the meeting. … I would appreciate that all these agreed matters shall be settled within next few days to allow all parties to move forward.” [35] Notwithstanding that the caveat over the Damansara Property has been removed, the Defendant has refused to sign the relevant transfer form to effect the transfer of his 576,000 shares in CHC as agreed at the EGM and acknowledged in his own email dated 30.3.2021. [36] Despite numerous reminders being sent by the company’s secretary requesting the Defendant to collect his salary payment as well to execute the transfer forms, the Defendant has refused to do so. [37] The Plaintiffs contended that the Defendant has failed to fulfill his part of the bargain. He has received the sum of RM 1 million as personal loan from the 1st Plaintiff, benefitted from the removal of the caveat over the Damansara Property but steadfastly refused to execute the transfer his 576,000 shares in CHC to the 1st Plaintiff. [38] Accordingly, in this Suit 188, the Plaintiffs are seeking an order that the Defendant specifically performs his agreement reached at the EGM to transfer to the 1st Plaintiff or his nominee(s) all his 576,000 shares in CHC and for damages to be assessed. The Defendant’s Defence [39] Against the Plaintiffs’ claims in Suit 188, in his Defence, the Defendant contended that his agreement to transfer his 576,000 shares in CHC was made subject to the following conditions: a) that the 1st Plaintiff and or CHC shall procure for the Defendant his license within four months from the date of EGM; b) that the 1st Plaintiff shall pay to the Defendant all the outstanding fees due to him; c) that the 1st Plaintiff shall pay to the Defendant the fees for utilising the Defendant’s medical license for CHC’s operation; d) that the First Plaintiff shall remove the private caveat by end of March 2020. [40] The Defendant further contended that his agreement at the EGM was made without prior knowledge that the 1st Plaintiff had wrongfully and fraudulently withdrawn and siphoned out from CHC a sum of RM 3 million. [41] Based on all of the above, the Defendant contended that the agreement made at the EGM is void and ought to be set aside. Court’s Deliberations [42] In the Defendant’s written submission, it is contended that the discussion at the EGM did not give rise to a binding agreement as the transfer of the Defendant’s 576,000 shares in CHC was subject to the 1st Plaintiff identifying the transferee(s) to the Defendant’s shares. [43] However, this was never the Defendant’s pleaded case at all. The Defendant never denied the fact that there was an agreement reached between parties during the EGM. [44] The Defendant’s aforesaid contention is also inconsistent with the contents in his email of 30.3.2021 reproduced above. [45] As regard the Defendant’s claim that the agreement made during EGM does not bind him anymore by reason of the alleged misappropriation of fund of RM3 million taken out from the company’s account without his knowledge, the Defendant has failed during the trial of this action to substantiate the allegation. [46] On the contrary, the Plaintiff has satisfactorily explained that the payments of RM 3 million was in fact a deposit made by one Kertas Global in respect of a transaction for the purchase of gloves which did not go through. As a result, CHC had to return the said sum of RM 3 million to Kertas Global. There was no misappropriation as contended by the Defendant. [47] In fact, from the documentary evidence and testimonies of the witnesses before this Court, what has been shown is that not only has the Defendant failed to demonstrate that the Plaintiffs had wrongly misappropriated monies from CHC, the Plaintiffs had made various advances to the company in order to sustain its operation. [48] The Plaintiffs, from time to time, had invested monies into the company which had been duly acknowledged by the Defendant, and such monies were treated as loans until the ACC license was obtained as per clause 2(f) of the Partnership Agreement. This can be shown as follows: Dear Dr Rao, As spoken by Dato Sri Gandi today, kindly indicate your acknowledgement and confirmation that so far for the below monies released to City Health Care Clinic Sdn. Bhd., shall be treated as loan until the approval for license is obtained successfully -

17.9.2019 - RM298,410.00 (Bank Guarantee for Tenancy)

20.9.2019 - RM110,000.00 [49] The Defendant via his email dated 10.10.2019 had confirmed that CHC had received such money from the Plaintiffs. His email reads thus: Dear Datin Sri, Yes Datin I am aware of the fund received for City Health Care for all the expenditure and rental deposit and other expenses. Here with I am agree with terms and the condition. Thank You With Regards Dr Rao [50] The advances by the Plaintiffs are also reflected in CHC’s financial statement for the year 2020, which shows an advance from a director in the sum of RM2,184,756.00. The Defendant during cross- examination had agreed that the advances were from the 1st Plaintiff. [51] In any case, the RM 3 million transaction was one that had taken place subsequent to the EGM on 28.11.2020. It is disingenuous for the Defendant to rely on event post the EGM as a basis to invalidate the agreement reached at the meeting. [52] As regards the Defendant’s claims that his fees were not paid to him, this again is not borne out by the evidence. The parties had agreed that the Defendant’s fee will be at the rate of RM2,500.00 for the first year, that is, for the period from June 2020 to May 2021 and RM5,000.00 per month starting June 2021 onwards subject to the condition that the company becomes profitable. This is reflected in the minutes of meeting dated 7.6.2020. The Plaintiffs have also testified that CHC had obtained its license after registering with the Ministry of Health. [53] There is evidence that the cheque for the sum of RM37,667.00 being the outstanding fees due to the Defendant was handed to the company secretary to be collected by the Defendant. This covers all fees, including medical fees due to the Defendant. The evidence before the Court shows that the secretary had sent numerous emails to the Defendant and requested the Defendant to collect his cheque. However, the Defendant refused to collect the cheque. [54] In fact, the Defendant did not testify at the trial that the agreed fee for the use of his medical licence had not been paid at all, neither in his witness statements or when additional questions were asked during his examination in chief. On the contrary, the Defendant testified during cross examination that a cheque was send to the company secretary but he did not collect the same. The Defendant also did not put the issue of non-payment of his medical fee to the Plaintiffs’ witnesses. Accordingly, I also see no merits to the Defendant’s contention regarding the non-payment of his medical fees. [55] As regard the removal of the caveat over the Damansara Property, there is no dispute that the caveat has been withdrawn. What the Defendant is contending before this Court is that the private caveat was supposed to be removed in Mac 2020 (which was during the outbreak of covid-19 when the country was under the movement control order) but was only removed on 25.10.2021. [56] In this connection, the Plaintiffs have explained that the delay was in fact caused by the Defendant’s failure to settle the quit rent and assessment for the Damansara Property. More specifically, Dato’ Shariff [SP-2], who was the solicitors for the Plaintiffs, testified that the Defendant only paid for the withdrawal of caveat on 27.9.2021, and the payment for quit rent and assessment were only made by the Defendant on 7.10.2021. [57] In any event, it is my judgment that the Defendant, having agreed to and accepted the removal of the caveat in October 2021, can now no longer relied on the delay as a ground to refuse the transfer of his 576,000 shares. If indeed, the parties had intended that the time for the removal of the caveat was to be of the essence, such requirement would have been waived and treated as no longer of the essence by the Defendant when he agreed to the removal in October 2021 and has thereafter obtained the benefit of the said removal. It is trite that parties may by their conduct waived the condition that time is of the essence. [58] In Hock Huat Iron Foundry (suing as a Firm) v Naga Tembaga Sdn Bhd [1999] 1 MLJ 65, the party in breach of non-delivery on an agreed date was allowed to remedy the breach, to complete and deliver at a later date. The Court of Appeal held that the innocent party cannot thereafter, insist on the earlier completion date being of the essence. “In Webb v Hughes (1870) LR 10 Eq 281, Malins V-C said, at p 286: But if time be made the essence of the contract, that may be waived by the conduct of the purchaser; and if the time is once allowed to pass, and the parties go on negotiating for completion of the purchase, then time is no longer of the essence of the contract. Since the defendant did not rescind the contract under s 56(1) of the Contracts Act 1950 when the plaintiff failed to complete on 31 January 1981 but instead had allowed the completion date to pass and had even allowed the plaintiff to remedy his default by permitting him to continue to work on the project until it was wholly completed, time was no longer to be regarded as of the essence of the contract. And when time is no longer of the essence of the contract, s 56(1) (which is only applicable to cases where the parties to the contract have intended that time is essential) no longer applies” [emphasis added] [59] In his written submission, the Defendant has also contended that no consideration was paid for his 576,000 shares in CHC by the 1st Plaintiff. In this regard, the Defendant contended that the sum of RM 1 million that was disbursed to him as personal loan was not from the 1st Plaintiff but from the 2nd and 3rd Plaintiffs as stipulated in the Partnership Agreement. [60] With respect, the Defendant’s said contention is disingenuous. At all times, it was known to the Defendant that both the 2nd and 3rd Plaintiffs were mere nominees of the 1st Plaintiff. In fact, this was expressly acknowledged by the Defendant during cross examination: “KD Yes. Dato’ can you also confirm that this agreement is with Dato’ Sri Gandi because Dato’ Sri Gandi was actually or put it the other way round, because FWG Global and Dato’ Sri Gandi’s wife were actually nominees. Correct? VENKA Yes”. [61] The fact that the consideration of RM 1 million for the Defendant’s 576,000 shares would be paid by way of a set-off from the sum owed by the Defendant to the 1st Plaintiff is confirmed by the Defendant himself when he stated in his email of 30.3.2021 that “I shall relinquish my shares from City Health Care Sdn Bhd (CHC) without any consideration given to myself.” Further, the set-off is also evidenced by the fact that the 1st Plaintiff would have to remove the caveat over the Damansara Property as a condition for the transfer of the Defendant’s 576,000 shares in CHC. [62] Moreover, the Defendant’s own subpoenaed witness, Mr. Pooneswaran (DW-2), who was CHC’s accountant and who was present during the EGM expressly confirmed the RM1 million that was agreed as consideration for the Defendant’s 576,000 shares in CHC was to be settled by way of a set-off from the personal loan given to the Defendant by the 1st Plaintiff. Pihak-pihak telah berbincang berkenaan RM1 juta ini sebagai offset kepada pinjaman kepada Defendan? POONES Ya, betul. POONES Ya, betul. So, pada masa masalah ini berlaku dalam syarikat kerana pinjaman itu, rumah Doktor telah dikaveat. So, apa yang cuba kita selesaikan disini adalah pinjaman itu akan bertukar menjadi konsiderasi kepada share yang sebanyak RM576,000. Walaupun dalam perkara itu, option 2 itu, Dr Rao actually meminta menambahkan tawaran. Selesai yang RM1 juta itu, selebihnya bagi RM300,000 kepada Doktor. Tetapi, Dato’ Sri bermati-mati tidak ingin beri RM1 lebih daripada RM1 juta itu. So, tapi RM1 juta itu adalah offset kepada pinjaman? POONES Itu pemahaman saya. Right. Dan syaratnya kaveat akan dikeluarkan dan pindah milik saham? POONES Ya, betul” [63] In the present case, it is clear that the 1st Plaintiff has fulfilled his obligations to the Defendant in that all the conditions for the purchase of the Defendant’s 576,000 shares in CHC as agreed at the EGM have been duly performed. What is left is for the Defendant to perform his agreed part of the bargain. [64] In Jalani Mohamed & Anor v Shahrom Abdullah & Anor [2024] 2 MLRA 933, the Court of Appeal held that the decree of specific performance ought to be granted if there are no legal prohibitions against the same and the innocent party remains able, willing and capable of completing their part of the bargain. More specifically, the Court of Appeal at para [108] cited with approval the following passages by Mary Lim JCA (as she then was) from the case of Ooi Siew Eng @ Ooi Siw Eng & Ors v. Link Ventures Sdn Bhd & Anor Appeal [2018] 2 MLRA 622 where her Ladyship held thus: “[23] In the present appeal, the learned Judge had refused the remedy of specific performance on the basis that the appellants in the first appeal had not fully paid the purchase price. With respect, this is not a proper exercise of discretion as it does not accord with the settled and firm principles in this respect. Following from a pronouncement that the first set of SPAs is valid, the remedy of specific performance ought to have been granted, given that the evidence show that the appellants remained able, willing and able to complete their part of the SPAs [24] It is our respectful view that the decree of specific performance ought to have been granted as the legal prohibitions under s 21(2) were not present”. [emphasis added] [65] In our case, not only is the 1st Plaintiff remaining capable, able and willing to perform his part of the bargain, the 1st Plaintiff has in fact fully performed all his obligations under the agreement reached at the EGM. [66] This is therefore an apt case for an order for specific performance of the agreement made at the EGM to be made against the Defendant. [67] In addition to specific performance, the Plaintiffs have also prayed for damages to be assessed. [68] Section 18 of the Specific Relief Act states that:

Any person suing for the specific performance of a contract may also ask for compensation for its breach, either in addition to, or in substitution for, its performance.

If in any such suit the court decides that specific performance ought not to be granted, but that there is a contract between the parties which has been broken by the defendant and that the plaintiff is entitled to compensation for that breach, it shall award him compensation accordingly.

If in any such suit the court decides that specific performance ought to be granted, but that it is not sufficient to satisfy the justice of the case, and that some compensation for breach of the contract should also be made to the plaintiff, it shall award him such compensation accordingly. [69] In South Asia Noble Sdn Bhd v Corak Prospek Binaan Sdn Bhd & Anor [2018] MLJU 1260, Justice Darryl Goon (as he then was) held that where the right to damages co-existed with the right to specific performance, such compensation may be assessed in such manner as the court may direct. The Court allowed the decree of specific performance as well as compensation in addition to the specific performance and the damages be assessed by the Registrar. His Lordship succinctly explained the right to damages at para [102] to [104] thus: “[102] These cases were, however, to do with the refusal of specific performance and the award of damages in substitution thereof. Would the same reasoning apply, where damages are awarded in addition to specific performance? Where damages in addition to specific performance are sought, it must be the case that damages is being sought for a breach of the contract which did not result in its termination. It is trite that a breach of contract does not necessarily result in its termination. There may be a breach of a warranty that only entitles the innocent party to damages. On the other hand, there may be a breach of a condition which would entitle the innocent party to elect either to terminate the contract and seek damages or to merely seek damages without terminating the contract. In a case such as the present, where damages in addition to specific performance is sought, it must necessarily mean that the Plaintiff has not terminated the contract, wants specific performance of it and in addition, damages for its breach. That being the case, the reasoning and the legal premise upon which the decisions in Lee Chee Wei, Souster and Bosaid were based would not seem to fit. Where damages are granted in addition to specific performance, it would not be on the basis that the contract was brought to an end by the refusal of specific performance, whereupon, the right to damages is granted. The right to damages would have co-existed with the right to specific performance. Only then would both remedies lie. This then would lead to the conclusion that the Plaintiff in this case should have proven its claim to damages (in addition to specific performance) during the trial. [103] However, apart from the common law‘s approach to this issue, there is section 18(4) of the Specific Relief Act 1950. [104] Section 18(4) provides as follows: “(4) Compensation awarded under this section may be assessed in such a manner as the court may direct.” “Compensation awarded under this section” must necessarily mean compensation awarded under section 18. This would include compensation awarded under section 18(1), that is to say compensation awarded in addition to and in substitution of, specific performance. As worded, section 18(4) contemplates a situation where damages or compensation has already been awarded and the Court is then to decide the manner of its assessment – precisely the situation at hand. Therefore, I am of the view that it is entirely within the purview of the Court‘s discretion to order damages to be assessed in the circumstances of this case.” [70] In the present case, the Defendant has steadfastly refused to transfer his 576,000 shares notwithstanding that the 1st Plaintiff had performed his part of the bargain thereby depriving the 1st Plaintiff or his nominee(s) from becoming the registered owners of the shares. Any loss or damages that may be occasioned by the Defendant’s aforesaid breached must be compensated. Conclusions [71] In the premises, this Court in exercise of its discretion under s 21(2) of Specific Relief Act, hereby makes the following orders against the Defendant: a) the Defendant to forthwith execute all relevant documents to cause the transfer of his 576,000 shares in CHC to the 1st Plaintiff and or his nominee(s) within 14 days from the date of this Order; b) the Senior Assistant Registrar of the High Court at Kuala Lumpur is empowered to execute all relevant documents for the transfer of the Defendant’s 576,000 shares in CHC to the 1st Plaintiff and or his nominee(s) in the event that the Defendant default in obeying the order made herein within the time stipulated; c) the Defendant to pay the 1st Plaintiff general damages to be assessed; d) the Defendant to pay the Plaintiffs the costs of the Suit 118 fixed at RM 75,000.00 subject to payment of allocator. SUIT NO.: WA-24NCC-655-05/2022 (“OS 655”) Background Facts [72] The background facts enumerated in Suit 188 also form the background facts to the OS 655. For this part of the judgment, the Plaintiff is Dr Rao and the 1st, 2nd, 3rd and 4th Defendants are FWG Global, Datin Sri Sarasvathy, Datuk Chandrakumanan and CHC respectively. [73] The gist of the Plaintiff’s complaints in OS 655 is that the Defendants had in the management of CHC, misappropriated funds from the company bank accounts by withdrawing large sums of money and paying them to parties unrelated to the affairs of CHC. The Plaintiff referred to the withdrawals of sums amounting in excess of RM 6 million which included the sum of RM 3 million which is alluded to in paragraph 40 above. [74] The Plaintiff also referred to various payments made to other third parties and to Dato’ Sri Gandhi by the company in support of his contention that the majority shareholders had misappropriated the funds of the company, thus oppressing him as the minority shareholder. Court’s Considerations [75] In Suit 188 above, I have found and determined that the Plaintiff has agreed on 28.11.2021 to transfer all his 576,000 shares in CHC to Dato’ Sri Gandhi and or his nominees with the consideration being the set-off from the sum of RM 1 million that the Plaintiff owed to Dato’ Sri Gandhi. [76] By the aforesaid, the Plaintiff was no longer the beneficial owner of his 576,000 shares in CHC at the time the OS 655 was filed. What this means is that the Plaintiff, at the time of filing of the OS 655, was a bare trustee of the 576,000 shares in CHC. Dato’ Sri Gandhi has become the beneficial owner of the said shares. Thus, whilst it is the presumption that a registered owner of the shares is also the beneficial owner of the same in an oppression action, the presumption can be rebutted and indeed, the present case is one where the Plaintiff does not have any beneficial interest in his 576,000 shares [See: Mascarenhas v Karim & Anor [2022] IECA 48]. [77] This raises the issue as to whether the Plaintiff as a bare trustee of the 576,000 shares in CHC can bring an action for oppression vide OS 655 against the Defendants therein, in particular, the 1st and 2nd Defendants who are nominees of Dato’ Sri Gandhi. In fact, Dato’ Sri Gandhi could have been made a party to the OS 655. The fact that Dato’ Sri Gandhi was not a registered shareholder of CHC does not mean that the Plaintiff could not have made him a party to the oppression action [See: Auspicious Journey Sdn Bhd v Ebony Ritz Sdn Bhd [2021] 4 CLJ 721, Mascarenhas v Karim & Anor [2022] IECA 48]. [78] Significantly, the alleged oppressive acts, namely, the withdrawals of the various sums of monies from CHC as contended by the Plaintiff, are said to be acts of Dato’ Sri Gandhi. The Plaintiff’s Submission in Reply expressly stated that “the Company was at the total control and behest of Dato’ Sri Gandhi being D1 alter ego”. Accordingly, although Dato’ Sri Gandhi is not a party to OS 655, he is nevertheless, identified as the actual oppressor. Thus, does the Plaintiff have the locus standi to file an oppression action that is directed against the very person for whom the Plaintiff is acting as trustee of the beneficial interest of the shares? [79] As a general rule, a claimant wishing to bring a minority oppression suit under s 346 of the Companies Act 2016 must be a registered member of the company. A non-registered beneficial shareholder does not have standing to bring a suit under s 346 although this is not an immutable rule [See: Kitnasamy s/o Marudapan v Nagatheran s/o Manogar [2000] 1 SLR(R) 542 at [26]–[27]; and Owen Sim Liang Khui v Piasau Jaya Sdn Bhd [1996] 1 MLJ 113 at 135, Gue See Sew v Heng Tan Hai [2020] MLJU 46] [80] In Atlasview Ltd v Brightview Ltd [2004] EWHC 1056 (Ch), [2004] 2 BCLC 191 at [37]–[38], the English High Court held that a registered shareholder who was a bare trustee and who held shares where the beneficial interest in the same was owned by a third party could file an oppression action against the oppressors. Mr Jonathan Crow sitting as Deputy Judge of the High Court in the said case addressed the issue of locus standi in the following manner: “[35] The next point taken by the applicants was that, although JGR is registered as a member, it cannot complain of any prejudice to its ‘interests’ under s 459 because it is a bare nominee and as such it has no economic interest in the value of the shares in Brightview registered in its name. In support of this line of argument, the Reedbest parties relied on a string of factors which they say show that s 459 cannot be available to JGR in this case. They said that the petition is based on an alleged breach of the investment agreement, to which JGR is not a party. They pointed out that the dispute is essentially one between Mr Barton and Mr Shalson, and that JGR is not a nominee for Mr Barton. They said that Brightview is not a quasi-partnership company, and that JGR cannot ‘carry’ or otherwise rely upon the other Barton parties’ complaints. [36] Even accepting the truth of all these various factors, the legal submission which they are said to support is in my judgment plainly wrong. The ‘interests’ which s 459 is able to protect include matters going beyond the economic interest of the legal owner in the shares registered in his name. This is clear from one of the Reedbest parties’ own authorities, O’Neill v Phillips [1999] 2 BCLC 1 at 10–11, [1999] 1 WLR 1092 at 1110–

The phrase ‘legitimate expectations’ has long been used in this context. For example, they may embrace matters such as an understanding as to the governance of the company, including an understanding that someone other than the registered shareholder should be involved in management: Hoffmann J said as much in Re a company (No 003160 of 1986) [1986] BCLC 391 at 396, and the fact that his remark was obiter does not detract from its force as a matter of logic. To suggest otherwise, as the applicants do, would involve imposing an arbitrary restriction on the scope of the word ‘interests’ in s 459. As a matter of statutory interpretation, there is no justification for doing so. Indeed, it would in my judgment be a thoroughly retrograde step to do so: it would mean that, in a case like this, no matter how disgracefully Mr Shalson might have behaved, Mrs Barton would have an interest but no locus, and JGR would have locus but no interest, so neither could complain. There is no reason at all to infer that the parliamentary draftsman intended such an arbitrary result. [37] It is striking that this specific point, relating to a nominee shareholder as petitioner, seems never to have been argued or decided before. However, it is also striking that numerous cases have been argued and decided on the assumed basis that a nominee shareholder is fully entitled to complain under s 459 about any diminution in value of the shares registered in its name, and that its ‘interests’ are for these purposes co-extensive with the interests of the beneficial owner: see Estill v Cowling Swift & Kitchin [2000] Lloyd’s Rep PN 378 at [101], Arrow Nominees Inc v Blackledge [2000] 1 BCLC 709 at 711, Lloyd v Casey [2002] 1 BCLC 454 at [48]–[49], and Rock Nominees Ltd v RCO (Holdings) plc [2003] EWHC 936 (Ch) at [2]–[3], [2003] 2 BCLC 493 at [2]–[3]. It is, I suppose, entirely possible that all the learned counsel and judges involved in those cases (including, in Lloyd v Casey, junior counsel for the Reedbest parties in this case) completely failed to miss a knock-out point, but it seems highly unlikely. More probably, the point was never taken in any of those earlier cases because it is simply wrong. [38] For the purposes of this strike-out application, all I have to decide is whether it is properly arguable that the ‘interests’ of a nominee shareholder under s 459 are capable of including the economic and contractual interests of the beneficial owners of the shares. In my judgment, based on both the language of s 459 and the authorities mentioned above, I consider it to be well arguable: indeed, if I had to decide the point, I would find that it was correct”. [emphasis added] [81] Accordingly, a registered member may bring proceedings for oppression notwithstanding that he is merely a nominee shareholder holding the shares for a third party if the shares are held on a bare trust because in such a situation, the interests of the registered member are regarded as being co-extensive and wholly aligned with the beneficial owner’s interests. Recently, in Marten, Joseph Matthew v AIQ Pte Ltd [2023] SGHC 361, Mavis Chionh Sze Chyi J also held the same view as Mr Jonathan Crow in Atlasview Ltd v Brightview Ltd. [82] For completeness of this analysis, where a registered shareholder has freely disposed of his shares and has ceased to be registered as a member, he will no longer have the locus standi to file a case for oppression [See: Lim Seng Wah and another v Han Meng Siew and others [2016] SGHC 177 (at [13])] [83] In our present case, however, the party that is alleged to have committed the oppressive acts happened to be the beneficial owner of the shares held by the Plaintiff. This means that by the Plaintiff filing the oppression action, the Plaintiff is asserting a claim against the oppressor who is said to be oppressing his own interest. This is because the Plaintiff is not asserting that he has an interest otherwise than the economic interest in the shares that he is seeking to protect by the oppression action. [84] It is my judgment that in a case such as the present where it is meaningless to press a case for oppression against oneself, the Plaintiff, notwithstanding that he is the registered owner of the shares, simply has no locus standi to file such an oppression action. This is because the Plaintiff is not contended that he has any other interest to protect which are matters going beyond the economic interest of the Plaintiff as the legal owner of the shares registered in his name. [85] In any case, even if it can be maintained that the Plaintiff as the registered shareholder can still file an oppression action under s. 346 of the Companies Act 2016, it is an action that is bound to fail. The object of an oppression action is for the Court to make appropriate orders that will bring an end the matters complained of. This is not obviously not possible where the interests of the oppressed and the oppressors are aligned. [86] Notwithstanding the aforesaid conclusion, it is also my judgment that on the facts of this case, the Plaintiff has also failed to establish any oppressive conduct by the Defendants herein. As I have found in Suit 188, there is simply no merits to the claim of misappropriation of funds made by the Plaintiff in support of the OS 655. [87] The sum of RM 3 million has been satisfactorily explained as refunds for the purchase of medical gloves which did not go through. As regards the other withdrawals, the Defendants have also explained that these withdrawals from the company’s account were payments to suppliers and repayment of advances made by Dato’ Sri Gandhi to the company. With regards to the latter, there is produced a resolution by the Board of Directors of CHC dated 4.12.2020 that Dato’ Sri Gandhi is entitled to make withdrawals to repay his loans made to the company whenever there is surplus money in the account. The Plaintiff did not dispute the resolution at all. [88] Furthermore, even if there are indeed some withdrawals that were made which have not been satisfactorily explained, such wrongful withdrawals, if at all, would constitute mismanagement or wrongs done to the company where the appropriate redress will be for the company to commence an action against the wrongdoers., if necessary by derivative action. The Plaintiff as a shareholder cannot bring a claim for the diminution in value of his shares resulting from a loss suffered by the company for a wrong done to the company. This will be against the reflective loss rule. [89] For the above reasons, I would also dismiss the OS 655 with costs fixed at RM 25,000.00 subject to allocator. Dated the 19th day of July 2024 ONG CHEE KWAN Judge of the High Court of Malaya High Court of Kuala Lumpur, NCC2 & Admiralty Counsel:

Mr. Krishna Dallumah together with Yong Yoong Hui for Plaintiff in

Messrs. Krishna Dallumah & Indran (Shah Alam) Mr. Syamsul Azhar bin Ab. Aziz together with Azizudin Adam bin Mudin and Sasha Nameera binti Sabtu for Defendant in Suit 188 (Defendants in OS 655)

Hock Huat Iron Foundry (suing as a Firm) v Naga Tembaga Sdn Bhd [1999] 1 MLJ 65 2. Jalani Mohamed & Anor v Shahrom Abdullah & Anor [2024] 2 MLRA 933 3. Ooi Siew Eng @ Ooi Siw Eng & Ors v. Link Ventures Sdn Bhd & Anor Appeal [2018] 2 MLRA 622 4. South Asia Noble Sdn Bhd v Corak Prospek Binaan Sdn Bhd & Anor [2018] MLJU 1260 5. Mascarenhas v Karim & Anor [2022] IECA 48 6. Auspicious Journey Sdn Bhd v Ebony Ritz Sdn Bhd [2021] 4 CLJ 721 7. Mascarenhas v Karim & Anor [2022] IECA 48 8. Kitnasamy s/o Marudapan v Nagatheran s/o Manogar [2000] 1 SLR(R) 542 9. Owen Sim Liang Khui v Piasau Jaya Sdn Bhd [1996] 1 MLJ 113 at 135 10. Gue See Sew v Heng Tan Hai [2020] MLJU 46

Atlasview Ltd v Brightview Ltd [2004] EWHC 1056 (Ch), [2004] 2 BCLC 191 12. Marten, Joseph Matthew v AIQ Pte Ltd [2023] SGHC 361 13. Lim Seng Wah and another v Han Meng Siew and others [2016]

Section 346 of the Companies Act 2016 2. Sections 18 and 21(2) of the Specific Relief Act 3.