1. ) LIM Chee Seong v 1. ) LIM Yok Poo @ LIM Yok Poh (WA-24NCC-343-08/2021)

LIM CHEE SEONG (No. K/P: 730712-10-5279)

LIM CHEE SOON (No. K/P: 770324-10-5513)

LIM POH CHOO (No. K/P: 520516-10-5858)

LIM CHEE PEOW (No. K/P: 800405-10-5747)

INFOLITY SDN BHD (No. Syarikat: 62155-H) … PLAINTIF-PLAINTIF

LIM YOK POO @ LIM YOK POH (No. K/P: 490619-10-5629)

LIM YOK SIN (No. K/P: 560712-10-5827)

LIM CHEE SENG (No. K/P: 720821-10-5383)

LIM YORK WAN (No. Paspot: M8634865)

LIM LI WEI (No. K/P: 700628-10-5764)

GOLDEN 251 SDN BHD (No. Syarikat: 936278-M)

LIM TEOW YONG & SONS SDN BHD (No. Syarikat 8532-D) … DEFENDAN-DEFENDAN Page 2 of 34 JUDGMENT [1] This was an oppression action by Plaintiffs against the Defendants via originating summons pursuant to Section 346 of the Companies Act 2016 (“CA 2016”) (“this Originating Summons”). [2] After hearing submissions from the parties, I dismissed this Originating Summons and below are the reasons for my decision. A] SALIENT BACKGROUND FACTS [3] The Plaintiffs and the 1st to 6th Defendants are shareholders of the 7th Defendant. [4] The 7th Defendant is a forwarding and transportation company. It is managed by the 1st to the 5th Defendants, all of whom are directors of the 7th Defendant. [5] The 7th Defendant is a family run company and the parties in this Originating Summons are related. [6] The founder of the 7th Defendant is one Lim Teow Yong who started the 7th Defendant’s business as a sole trader. [7] Lim Teow Yong then instructed his sons, Lim Geok Chan (deceased) and Lim Yoke Wah (deceased) (who is also the father of the 5th Defendant) to incorporate the 7th Defendant as a body corporate on 8.4.1969 and named the company, “Lim Teow Yong & Sons Sdn Bhd”. [8] The 7th Defendant was incorporated as a body corporate so that all of Lim Teow Yong family members could enjoy the benefits of the 7th Defendant’s business. [9] The other siblings of Lim Geok Chan whom are Lim Yoke Beng (deceased) and Kim Yoke Kheong (deceased) were also members of the 7th Defendant. Page 3 of 34 [10] The following matters averred by the Plaintiffs are not within the knowledge of the Defendants who rely only on what is stated in the 7th Defendant’s Articles of Association (“Articles of Association”): i) the shares of Lim Geok Chan in the 7th Defendant was transferred to the 5th Defendant and the 5th Defendant represents the interest of the Lim Geok Chan. ii) The 1st, 2nd and 4th Plaintiffs are the children of Lim Yoke Beng (the sibling of Lim Geok Chan). iii) The 3rd Plaintiff is the wife of the Lim Yoke Keong (deceased) and represents the interest of the family of the Lim Yoke Keong. [11] The 1st to 5th Defendants are the children and grandchildren of Lim Teow Yong. [12] The Plaintiffs and the Defendants are essentially two-family fractions of Lim Teow Yong (namely, the families of Lim Geok Chan and Lim Yoke Wah) who are at odds with each other and have resulted in several litigation which are as follows: i) Derivative action by the Plaintiffs against the directors of the 7th Defendant and another subsidiary company known as Tan Hin Realty Sdn Bhd (Suit No. 22-1642-2009) (“Derivative Action”). In this Derivative Action the 1st to 5h Defendants were alleged to have misappropriating money and assets of the 7th Defendant. The Shah Alam High Court dismissed the Plaintiffs’ Derivative Action. The Plaintiffs then appealed against this decision but the Court of Appeal dismissed the appeal. The Plaintiffs then applied for leave to appeal to the Federal Court but the leave application was also dismissed by the Federal Court. The costs of the appeal and leave application have not been paid by the Plaintiffs. ii) Winding up petition against the 7th Defendant filed by the Plaintiffs (“Winding Up Petition”). The Kuala Lumpur High Court (Lim Chee Seong & Ors v. Lim Teow Yong & Sons Sdn Bhd & Ors [2012] MLRHU 932) struck out the Winding Up Petition on 22.6.2012 on the ground of multiplicity of proceedings given that the Derivative Action filed by the Plaintiffs was overlapping with the Winding Up Petition. Page 4 of 34 iii) A civil suit (No. B52-156-10/2014) by the subsidiary company of the 7th Defendant, Tan Hin Realty Sdn Bhd against the Plaintiffs on the allegation of wrongful entry of private caveats over properties belonging to Tan Hin Realty Sdn Bhd. The Sessions Court in Shah Alam ordered the Plaintiffs to pay damages in the sum of RM109,000.00 with costs, for damages arising from the removal of the caveats. The Plaintiffs appealed against the decision of the Shah Alam Sessions Court. The Shah Alam High Court dismissed the appeal by the Plaintiffs and upheld the decision of the Sessions Court. The Plaintiffs then appealed to the Court of Appeal but the appeal was dismissed with cost. iv) Shah Alam High Court Civil Suit No. 22-261/2021 initiated by the 4th Defendant against Lim Chee Kiang (a bankrupt) and his sister Lim Hooi Kheng relating to a house held on trust. The Shah Alam High Court dismissed the claim brought by the 4th Defendant and the counter claim brought by Lim Chee Kiang and Lim Hooi Kheng without any order as to costs. The 7th Defendant is not involved in this suit. v) Originating Summons No. 24NCC-123-03/2014 (“OS 123”) filed by the 7th Defendant against the 5th Plaintiff, for, inter alia, a declaration on the question of whether based on the 7th Defendant’s Articles of Association the 5th Defendant, being a corporate shareholder of the 7th Defendant, can have a non-family member as its shareholder since only family members can hold shares in the 7th Defendant. OS 123 was filed because one of the shareholders of the 5th Defendant, one Wee Kee Kim, who held 13.50% shares indirectly in the 7th Defendant is not a family member of Lim Teow Yong. The Shah Alam High Court dismissed the OS 123 and did not find it to be an abuse of process. B] THE OPPRESSIVE CONDUCT COMPLAINED OF BY THE PLAINTIFFS [13] The oppressive conduct complained of by the Plaintiffs essentially revolves around the amendment of Articles 5, 41 and 93 of the 7th Defendant’s Articles of Association. Page 5 of 34 [14] The Plaintiffs allege that following were done to enable Article 41 specifically and Articles 5 and 93 generally of the Articles of Association to be amended to oppress the Plaintiffs: i) The motion and resolution passed by the 7th Defendant on 13.12.2018 to issue new shares and the issuance of the said new shares. ii) The motion and resolution passed by the 7th Defendant on 19.9.2019 to amend Articles 5, 41 and 93 of the Articles of Association. [15] The Plaintiffs further allege that dividends were not declared by the 7th Defendant to oppress the Plaintiffs. C] THE PRINCIPLES GOVERNING AN OPPRESSION ACTION UNDER SECTION 346 CA 2016 [16] Section 346 CA 2016 which provides as follows: “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.” (own emphasis added) [17] In Re Kong Thai Sawmill (Miri) Sdn Bhd & Ors v. King Beng Sung [1978] 2 MLJ 227, the Privy Council speaking through Lord Wilberforce explained what oppression means under Section 181 Page 6 of 34 of the Companies Act 1965 (which is in pari materia with Section 346 CA 2016) as follows: “Secondly, for the case to be brought within section 181(l)(a) at all, the complaint must identify and prove "oppression" or "disregard". The mere fact that one or more of those managing the company possess a majority of the voting power and, in reliance upon that power, make policy or executive decisions, with which the complainant does not agree, is not enough. Those who take interests in companies limited by shares have to accept majority rule. It is only when majority rule passes over into rule oppressive of the minority, or in disregard of their interests, that the section can be invoked. As was said in a decision upon the United Kingdom section there must be a visible departure from the standards of fair dealing and a violation of the conditions of fair play which a shareholder is entitled to expect before a case of oppression can be made (Elder v Elder & Watson Ltd 1952 SC 49): their Lordships would place the emphasis on "visible". And similarly "disregard" involves something more than a failure to take account of the minority's interest: there must be awareness of that interest and an evident decision to override it or brush it aside or to set at naught the proper company procedure (per Lord Clyde in Thompson v Drysdale 1925 SC 311 315). Neither "oppression" nor "disregard" need be shown by a use of the majority's voting power to vote down the minority: either may be demonstrated by a course of conduct which in some identifiable respect, or at an identifiable point in time, can be held to have crossed the line.” (own emphasis added) [18] In Pan-Pacific Construction v. Ngiu Kee Corp [2010] 6 CLJ 721, the Federal Court summarised the position of the law on oppression based on section 181 CA 1965 and identified 4 categories of conduct and how they corelated to the concept of “unfairness” as the basic theme: “[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. Page 7 of 34 [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). [28] In Re Saul D Harrison & Sons plc [1995] 1 BCLC it was explained (Hoffmann LJ [as he then was]) that in ‘deciding what is fair or unfair for the purposes of s. 459, it is important to have in mind that fairness is being used in the context of a commercial relationship. The articles of association are just what their name implies: the contractual terms which govern the relationships of the shareholders with the company and each other. They determine the powers of the board and the company in general meeting and everyone who becomes a member of a company is taken to have agreed to them. Since keeping promises and honouring agreements is probably the most important element of commercial fairness, the starting point in any case under s. 459 will be to ask whether the conduct of which the shareholder complains was in accordance with the articles of association ... The answer to this question often turns on the fact that the powers which the shareholders have entrusted to the board are fiduciary powers, which must be exercised for the benefit of the company as a whole ... But the fact that the board are protected by the principle of majority rule does not necessarily prevent their conduct from being unfair within the meaning of s. 459’. (own emphasis added) [19] Having laid down the main principles that apply to an oppression action under Section 346 CA 2016, I will now deal with each the Plaintiffs’ complaints and the Defendants’ responses to those complaints below. D] ISSUANCE OF NEW SHARES AND THE AMENDMENTS TO THE ARTICLES OF ASSOCIATION [20] As stated earlier the Plaintiffs main complaint for bringing this action is the amendments that were made to Articles 5, 41 and 93 Page 8 of 34 of the 7th Defendant’s Articles of Association (“Amendments to the Articles”). [21] It is the Plaintiffs’ case that the Defendants had planned and orchestrated the motion to increase the 7th Defendant’s share capital by issuing new shares in order to enable the Amendments to the Articles to disallow the 5th Plaintiff from being a shareholder of the 7th Defendant. [22] This is because as it currently stands the shareholders of the 5th Plaintiff are not all family members of Lim Teow Yong, the founder of the 7th Defendant. It is the contention of the Defendants that the 7th Defendant was incorporated so that all family members of Lim Teow Yong could enjoy the benefits of the 7th Defendant’s business. Thus, non-family members of Lim Teow Yong are not allowed to be shareholders of the 7th Defendant. [23] A dispute then arose between the Defendants and the Plaintiffs as to whether the 5th Plaintiff had infringed Articles 34, 39, 40 and 41 of the Articles of Association of the 7th Defendant on the basis that the said Articles prohibited the transfer of the shares of the 7th Defendant to non-family member of Lim Teow Yong. [24] This dispute led to the filing of OS 123 where the 7th Defendant (as the plaintiff therein) sought the following declaratory orders against the 5th Plaintiff (as the 1st defendant) and one Wee Kee Kim (as the 2nd defendant): “i) a declaration that the 1st Defendant (“D1”) had breached Articles 34, 39, 40 and 41 of the Plaintiff’s Articles of Association (“P’s AA”); ii) a declaration that D1 is controlled by 2nd Defendant (“D2”) premised on D2’s shareholding in D1; iii) a declaration that D1 is being controlled by D2, who is not a family member within Article 41 of P’s AA; iv) a declaration that the Plaintiff is entitled to suspend or withhold all dividend payment to DI, if declared, until D2 transfers his shares to any family member within Article 41 of the P’s AA; and v) a declaration that DI is not entitled to attend or vote at the Plaintiff’s Annual General Meeting or Extraordinary General Meeting until the Page 9 of 34 shares held by D2 are transferred to family members set out in Articles 34, 39, 40 and 41 of the P’s AA.” [25] Justice Harmindar Singh (as he then was) in OS 123 summarised in his grounds of judgment (Lim Teow Yong & Sons Sdn Bhd v. Infolity Sdn Bhd & Anor [2015] 1 LNS 311) the basis for the above declaratory reliefs sought by the 7th Defendant as follows: “(i)

(v) in the circumstances the ‘corporate veil’ of D1 must be lifted.” [26] In dismissing OS 123 Justice Harmindar stated, inter alia, as follows: “Coming back to the instant action, the board of directors of the Plaintiff vide resolution dated 13 January 2004 approved the transfer of shares to D1, Share certificates were duly issued to D1. Furthermore, bonus issues were also subsequently issued to D1. The irresistible inference here is that the board must have deemed D1 to be desirable to be admitted to membership of the Plaintiff; a transfer that is permissible under Article 34 which article clearly envisages sale of shares to non-members who may also be nonfamily members. It is both curious and awkward for the company to now challenge the same when no allegations of impropriety or mala fide by the board were ever asserted by the Plaintiff.” (own emphasis added) [27] The High Court essentially decided that Article 34 of the Articles of Association of the 7th Defendant at that point of time, permits or rather does not prohibit the sale of the 7th Defendant’s shares to non-family members of Lim Teow Yong. His Lordship also held Page 10 of 34 that “Article 41 does not contain any restriction or prohibition with respect to the transfer of shares to ‘non family members”. [28] OS 123 was decided sometime in 2015. The Defendants had abided by the High Court’s decision in OS 123 in that the position of the 5th Defendant as a shareholder of the 7th Defendant remain unchanged. [29] However, the Plaintiffs allege that the oppression began from the passing of a motion at the 42nd Annual General Meeting (“AGM”) of the 7th Defendant held on 15.12.2016 where the following resolution was passed: “It was resolved that any future transfer of shares within the Company’s corporate members will have to be brought to the notice of the Board of Directors of the Company at the earliest board meeting and be approved by the Board before such transfers be effective but that this will not have a retrospective effect.” (own emphasis added) [30] The shareholding ratio of the Plaintiffs and the 1st to 6th Defendants was then as follows: No. 7th Defendants Shareholders Percentage 1. 1st to 6th Defendants About 54%

Plaintiffs About 46% Resolution to Issue New Shares [31] On 13.12.2018, the 7th Defendant held its 44th Annual General Meeting (“44th AGM”). All the notices and documents pertaining to the 44th AGM were duly circulated to the Plaintiffs. The 7th Defendant had also advertised the 44th AGM in The Star newspaper. [32] One of the motions tabled at the 44th AGM was for the 7th Defendant to issue new shares as follows: Page 11 of 34 “To approve issuance of 140,000 new ordinary Shares in the Company pursuant to Section 75 and 76 of the Companies Act 2016, in proportion to the current members’ shareholdings in the Company The proposed new Shares are to be issued as follows:- • Total Shares to be issued - 140,000 ordinary Shares • Subscription price - RM30 per Share • Total capital to be raised - RM4,200,000 • Allocation of Shares The new Shares will be offered to all existing members, in proportion to each member’s current shareholding in the Company. • Unsubscribed Shares Any unsubscribed Shares will then be offered to other existing members in proportion to their shareholding. If there are still Shares that remain unsubscribed after this, it will then be offered to any existing member(s) who is/are willing to subscribe for the balance, in proportion to their shareholding. • Timelines - Entitlement date for new Share issue - all those members who are in the Register of Members as at 13 December 2018. - Approval for new Share issue -13 December 2018 - Acceptance of new Share issue - latest by 31 January 2019. - Subscription and receipt of full payment - latest by 29 March 2019. Justifications for raising additional capital by the Company are explained in detail in Appendix 1, as attached.” [33] The motion to increase the 7th Defendant’s share capital by issuing new or additional shares to its members was made pursuant to section 76 CA 2016 and the justification for raising the said additional capital as stated in Appendix 1 of the Agenda to the motions tabled at the 44th AGM is as follows: “The purposes for the raising of additional Capital by the Company are as follows: i) Purchase of additional lorries The Company’s turnover and profit has been steadily increasing over the last 5 years and the Directors are looking at expanding and replacing the current the fleet of lorries with new lorries that will eater and serve the current market demand and need from existing and potential customers. The Company is looking to purchase 4 new lorries and the details are as follows: Page 12 of 34 Two 10 Tonne Bonded Lorries at a cost of approximately RM270,000 each; and Two 3 Tonne Bonded Lorries at a cost of approximately RM 180,000 each The total cost for this expansion will cost the Company an estimated RM900,000. The Company has good demand for the 10 Tonne and 3 Tonne Bonded lorries from existing customers and the Company strongly believes that turnover will increase after the purchase of these additional new lorries. ii) Purchase of investment properties The Company would like to diversify it’s income stream into property investment and is looking to purchase several commercial properties in the Port Klang area where it can derive steady rental income. Due to the current soft property market, the Company believes that it can acquire commercial properties at fairly depressed values, where it can then derive an attractive rental yield. The objective of investing in commercial properties is 2 fold, where the Company believes it can generate steady rental income and obtain a good rental yield and also generate good capital appreciation by holding these properties as long term investments. Prices of commercial shop lots at Port Klang have reduced from RM800,000 - RM900,000 per unit in 2015 to about RM600,000 - RM700,000 currently. These properties will require upgrading and refurbishment before it is let out for rental. The Company is currently looking at purchasing approximately 4 commercial shop lots in the Port Klang area at the above prices and looking to spend an additional RM150,000 per unit in refurbishment and upgrading costs. Thus, the Company is allocating approximately RM3 million to RM3.2 million for this purpose. iii) Purchase of 2 acres of land for business expansion purposes at Jalan Telok Panglima Garang, Selangor. The Company is looking to purchase approximately 2 acres of agricultural land at Jalan Telok Panglima Garang, Selangor at a cost of approximately RM60 per square feet or approximately RM5.2 million. Page 13 of 34 The Company plans to convert the status of the land from agricultural land to industrial land. The land will then be developed for the Company’s own use whereby the Company intends to build a warehouse and related facilities. The Company plans to diversify and expand it’s range of services into providing warehousing facilities and solutions to customers. The objective of the Company is to be a “Total Logistics Solution Provider” to customers where it is able to provide end-to-end solutions for all logistic and warehousing needs of its customers. iv) Additional working capital The Company is also raising funds for additional working capital requirements as it strongly feels that the Turnover and Profits of the Company will continue to grow and it will need additional capital injection to fund this expansion. The Turnover of the Company has steadily increased over the years from RM6.1 million in 2015 to RM8.9 million in 2018. Further expansion will require an additional injection of funds by the shareholders of the Company.” [34] The motion to issue the new shares was passed by a majority vote of 54:46. The Plaintiffs had voted against the said motion. [35] The 7th Defendant’s Minutes of the 44th AGM, the first Notice of Provisional Allotment of Shares and the Acceptance and Subscription Form were sent to all the shareholders of the 7th Defendant on or about January 2019. [36] By letter dated 27.6.2019 the 7th Defendant sent the second Notice of Provisional Allotment of Shares and the Acceptance and Subscription Form to all the shareholders of the 7th Defendant. [37] Vide letter dated 8.10.2020 the 7th Defendant sent the third Notice of Provisional Allotment of Shares and the Acceptance and Subscription Form to all the shareholders of the 7th Defendant. [38] The new shares were offered to all existing shareholders based on their current shareholding ratio. [39] The entire process of increasing the 7th Defendant’s share capital was only completed on 15.12.2020. Page 14 of 34 [40] Whilst given the opportunity to do so, the Plaintiffs did not subscribe to the new shares issued by the 7th Defendant. Resolution to Amend the Articles of Association [41] On 18.9.2019 an EGM of the 7th Defendant (“2019 EGM”) was called with a motion for a Special Resolution that Articles 5, 41, 92 and 93 of Articles of Association of the 7th Defendant be deleted in its entirety and substituted with new Articles (“Special Resolution to Amend the Articles”). The current and proposed new Articles 5, 41, 92 and 93 of Articles of Association are reproduced below: Previous Article 5 “The shares shall be under the control of the directors who may allot or otherwise dispose of the same to such persons, on such terms and conditions, and either at a premium or at par or subject to the provisions of the Act, at a discount and at such time as the directors think fit, but subject always Article 3 hereof, and with full power to give to any person the call of any shares either at par or at a premium, during such time, and for such consideration as the directors think fit.” New Article 5 “The shares shall be under the control of the directors, who may allot or otherwise dispose of the same to such persons, on such terms and conditions including those as per Article 41 and to such persons being a descendent of the Company’s shareholders or a person related to the descendents of the Company’s shareholders through marriage such as any child or other issue, son-in-law, daughter-in-law, father, mother, brother, sister, nephew, niece, wife or husband of the Company’s shareholders, and either at a premium or at par or subject to the provisions of the Act, at a discount and at such time as the directors think fit, but subject always to Article 3 hereof, and with full power to give to any person the call of any shares either at a par or at a premium, during such time, and for such consideration as the directors think fit.” Previous Article 41 “Any share may be transferred by a member to any child or other issue, son-in-law, daughter-in-law, father, mother, brother, sister, nephew, niece, wife, husband of such member and any share of the deceased member may be transferred by his executors or administrators to any child or other issue, son-in-law, daughter-in-law, father, mother, brother, sister, nephew, niece, widow Page 15 of 34 or widower of such deceased member to whom such deceased member may have specially bequeathed the same, and shares standing in the name of the trustees of the will of any deceased member may be transferred upon any change of trustees to the trustees for the time being of such will.” New Article 41 “Any share may be transferred by a member to any child or other issue, son-in-law, daughter-in-law, father, mother, sister, nephew, niece, wife or husband of such member, or to a body corporate which is wholly owned by the descendents of the Company and/or persons related to the descendents of the Company through marriage as mentioned in this Article above, and any share of the deceased member may be transferred by his executors or administrators to any child or other issue, son-in-law, daughter-in-law, father, mother, brother, sister, nephew, niece, wife or husband of such deceased member, or to a body corporate which is wholly owned by the descendents of the Company and/or persons related to the descendents of the Company through marriage as mentioned in this Article above, to whom such deceased member may have specially bequeathed the same, and shares standing in the name of the trustees of the will of any deceased member may be transferred upon any change of trustees to the trustees for the time being of such will. The directors of a body corporate holding shares in the Company as mentioned above in this Article must solely consists of descendents of the Company and/or persons related to the descendents of the Company through marriage as mentioned in this Article above.” Previous Article 92 “The directors shall have power at any time and from time to time to appoint any other member of the company as a director, either to fill a casual vacancy or as an addition to the board but so that the total number of directors shall not at any time exceed the, maximum number fixed. But any director so appointed shall hold office only until the conclusion of the next following ordinary general meeting of the company, and shall be eligible for re-election at such meeting.” New Article 92 “The directors shall have power at any time and from time to time to appoint any said person as a director of the Company subject to the said person being a descendent of the Company’s shareholders or a person related to the descendents of the Company’s shareholders through marriage such as any child or other issue, son-in-law, daughter-in-law, father, mother, brother, sister, nephew, niece, wife or husband of the Company’s shareholders, either to fill a casual vacancy or as an addition to the board, but so that the total number of directors shall not at any time exceed the maximum number fixed. But any director so appointed shall hold office only until the conclusion of the next Page 16 of 34 following ordinary general meeting of the Company and shall be eligible for re-election at such a meeting.” Previous Article 93 “The share qualification for a Director may be fixed by the Company in General Meeting, and unless and until so fixed no qualification shall be required.” New Article 93 “Unless otherwise determined by the Company there shall be no shareholding qualification for directors. A director need not be a member but shall be entitled to attend and speak at a meeting of members.” [42] Under the Articles of Association of the 7th Defendant, its Articles can only be altered or changed by way of a special resolution which must be passed by not less than three-fourths or 75% of the 7th Defendant’s members who are entitled to vote at a general meeting. [43] The Special Resolution to Amend the Articles was passed by more than 75% of the members of the 7th Defendant at the 2019 EGM. [44] At the 7th Defendant’s 45th Annual General Meeting (“45th AGM”) held on 9.12.2019 it was also resolved that the 5th Defendant is required to rectify its non-compliance to the New Article 41 of the Articles of Association within the stipulated timeframe which timeframe previously given was for 6 months. E] ANALYSIS AND FINDINGS [45] It is the Plaintiffs’ contention that in order to circumvent the decision of the High Court in OS 123 the Defendants had done the following: i) Moved to amend the 7th Defendant’s Articles of Association; ii) As the 1st to 6th Defendants needed not less than 75% of the votes of the members of the 7th Defendant, the 1st to 6th Defendants then motioned to increase the 7th Defendant’s share capital by issuing new shares; and Page 17 of 34 iii) The motion to increase the 7th Defendant’s share capital was done to dilute the Plaintiffs’ shares in the 7th Defendant. The motion was not genuine in that there was no real need to raise capital as alleged by the Defendants. [46] The Plaintiffs concluded that the call for additional capital injection was done in bad faith and not in the interest of the 7th Defendant. That it was done with an ulterior motive to dilute the interest of the Plaintiffs so that the 1st to 6th Defendants can achieve 75% shareholding in the 7th Defendant, and thereafter amend Article 41 of the Articles of Association. That the motion to increase the share capital was to circumvent the High Court’s decision in OS 123. [47] Having given due consideration to learned counsel for the Plaintiffs’ arguments and the evidence before the Court in this Originating Summons, I am unable to accept the Plaintiffs’ above contentions and find that they are flawed based on the reasons stated below. OS 123 [48] It is not in dispute that the 1st to 6th Defendants’ had sought the Court’s determination in OS 123 on whether pursuant to the Previous Article 41 of the Articles of Association only family members can hold the 7th Defendant’s shares. The High Court in dismissing OS 123 did not find that the filing of OS 123 was an abuse of process and held, inter alia, as follows: “ ….. There was an application by the Defendants for the costs to be borne personally by the board of the Plaintiff for having caused the Plaintiff to commence this frivolous suit. This was however refused as I considered that seeking an interpretation of the articles as was the case here was not an abuse of the court process although the action ended in failure. There was also no case for costs on an indemnity basis as there was no evidence of bad faith on the part of the Plaintiff (see Takako Sakao (f) v. Ng Pek Yuen (f) & Anar (No 2) [2010] 2 MLJ 181 FC).” (own emphasis added) [49] In other words, the High Court in OS 123 did not find that the suit was filed in bad faith. Page 18 of 34 [50] I do not find anything untoward or sinister about the 7th Defendant’s action (even if it was done through the 1st to 6th Defendants) in seeking the High Court in OS 123 to determine whether the Previous Article 41 limits the ownership of the 7th Defendant’s shares to only family member of Lim Teow Yong. [51] It appears to me that the Plaintiffs are harbouring on the notion that it is wrong for the Defendants to take the position that the Previous Article 41 should be interpreted to confine the shareholders of the 7th Defendant to only family members. The Defendants are entitled to their opinion. There is nothing wrong with that. [52] What is important is that the Defendants did not go against the decision of OS 123. The 5th Defendant’s shareholding or position in the 7th Defendant did not change post the High Court’s decision in OS 123. Motion to Increase Share Capital – whether necessary or bona fide required [53] The Plaintiffs’ contention regarding the motion to increase the 7th Defendant’s share capital falls into 2 main parts: i) The motion was not bona fide in that there was no necessity to increase the share capital or for the addition funds; and ii) That it was done with an ulterior move to dilute the Plaintiffs’ shares by issuing new shares in the 7th Defendant so that the 1 to 6th Defendants can amend the Articles of Association. [54] I will first deal with the issue of whether the said motion was bona fide. [55] The Defendants have explained that the reason for the motion to increase the 7th Defendants share capital was to raise funds for the following purposes: i) Purchase of additional lorries; ii) Purchase of investment properties; iii) Purchase of 2 acres of land for business expansion purposes at Jalan Telok Panglima Garang, Selangor; and iv) Additional working capital. Page 19 of 34 [56] The full justification for the motion to increase the 7th Defendant’s share capital is stated in Appendix 1 of the Agenda to the motions tabled at the 44th AGM and is reproduced in paragraph 33 above. [57] The Plaintiffs’ argued that there is no reason for the 7th Defendant to raise capital and provided alternative means to raise funding. The Plaintiffs, inter alia, raised the following: i) The 7th Defendant has total assets of RM11,815,715.00 against the liabilities of RM713,989.00 not taking into consideration the investment of the 7th Defendant in its subsidiary company which has no less than RM10.0 million assets. ii) The Defendants’ justification for the issuance of new shares is flimsy and does not make any business sense. The costs of the additional lorries are RM900.000.00 and the 7th Defendant has almost RM5 million cash in its account. That the 7th Defendant should purchase the lorries by way of leasing as it would be beneficial to the 7th Defendant in terms of tax advantage. iii) Regarding the 7th Defendant’s diversifying its income through property investment, the 7th Defendant’s main object in its Memorandum and Articles of Association is to conduct business activities as logistic service provider. If the 7th Defendant is to be involved in real estate, the activities are under the purview of its subsidiary company called Tan Hin Realty Sdn Bhd (“Tan Hin Realty”). [58] In addition to the justification given by the Defendants in Appendix 1 of the Agenda to the motions tabled at the 44th AGM, further explanation was given in the Defendant’s Affidavit In Reply (Enclosure 9), inter alia, as follows: i) Before the 7th Defendant initiated the process of capital injection and to issue new shares, the 7th Defendant had conducted a detailed study and had issued a justification memo. Page 20 of 34 ii) The entire capital injection process into the 7th Defendant was only completed on 15.12.2020 and all the capital injection was captured in the 7th Defendant’s accounts. iii) Through the difficult period when the country was afflicted by the Covid-19 pandemic, the 7th Defendant was able to sustain as well as expand its business by utilising the new capital injection. iv) Tan Hin Realty has several plots of land which is being used by the 7th Defendant to store goods (storing and warehousing) and for the parking the 7th Defendant’s lorries and trailers every day. Therefore, Tan Hin Realty has no intention to develop its plot of land and/or to charge it to the bank to raise capital for the 7th Defendant. The plot of land belonging to Tan Hin Realty is critical to the business operation of the 7th Defendant. The practice of the 7th Defendant using these plots of land belonging to Tan Hin Realty for its business has been done for generations since its incorporation in 1969. [59] There are two main issues raised by the Plaintiffs in respect of the motion to increase the 7th Defendant’s share capital and they are: i) Whether it was done in bad faith or mala fide; and ii) The Plaintiffs’ alternative proposals on how the additional capital or funds can be raised instead of the ones proposed at the 44th AGM. [60] In so far as the reasons given for the increase of the 7th Defendant’s share capital is concerned, I am satisfied from the evidence in this Originating Summons that the said motion was done in good faith. I am unable to accept the arguments raised on behalf of the Plaintiffs which essentially revolve around proposing that there is a better way to run or manage the 7th Defendant. [61] Even if there was, that does not necessarily mean that the manner in which board of directors of the 7th Defendant (or that of the 1st to 5th Defendants as directors of the 7th Defendant) has chosen to run the 7th Defendant is tainted or is mala fide. Page 21 of 34 [62] There is huge difference between competence and acting in bad faith. [63] Hence, even if there was a better way to raise the 7th Defendant’s share capital, it cannot be construed that the one proposed at the 44th AGM was done in bad faith. [64] The increase in the 7th Defendant’s share capital is needed for business operations and expansion and it has been set out in detail in the motion to increase the share capital. [65] What is of crucial importance is that the increase in the share capital are captured in the 7th Defendant’s accounts and the use of the additional funds obtained therefrom are all accounted for. [66] The next issue is regarding the Plaintiffs’ attempt to substitute the management decisions or commercial judgment of the 7th Defendant or that of the majority of the shareholders with their own. The position of the law on this is clear. In the case of Howard Smith Ltd v. Ampol Petroleum Ltd & Ors [1974] AC 82, the Privy Council held as follows: “ ….. Their Lordships accept that such a matter as the raising of finance is one of management, within the responsibility of the directors: they accept that it would be wrong for the court to substitute its opinion for that of the management, or indeed to question the correctness of the management’s decision, on such a question, if bona fide arrived at. There is no appeal on merits from management decisions to courts of law: nor will courts of law assume to act as a kind of supervisory board over decisions within the powers of management honestly arrived at.” (own emphasis added) [67] As the motion to increase the 7th Defendant’s share capital was bona fide, it is not for the Court to question the correctness of the commercial judgment of the 7th Defendant’s shareholders who voted on the motion at the 44th AGM or the management decision of the 7th Defendant. [68] The motion to increase the 7th Defendant’s share capital and the subsequent exercise to increase the said share capital were done above board. Page 22 of 34 Motion to Increase Share Capital - Issuance of New Shares [69] I will now deal with the second part of the Plaintiffs’ contention that the issuance of the new shares was done with an ulterior motive to dilute the Plaintiffs’ shares. [70] Even from the outset, there is simply no basis for the Plaintiffs’ allegation because first and foremost, the resolution to increase the 7th Defendant’s share capital by issuing new shares was done by: i) Offering the new shares to all the 7th Defendant’s shareholders including the Plaintiffs; ii) The news shares were offered to the shareholders based on their current shareholding ratio; and iii) If any of the existing shareholder decides not to subscribe to the new shares allotted to him (her or it), only then is the option given to the other shareholders to purchase those shares (which were not subscribed by that shareholder). [71] Therefore, the Plaintiffs were given the same and equal opportunity to subscribe to the new shares. [72] However, the Plaintiffs’ chose not to do so despite being given the opportunity and time to do so. In this regard, as stated in paragraphs 35 to 37 above the 7th Defendant had sent to the Plaintiffs the Notice of Provisional Allotment of Shares and the Acceptance and Subscription Form (“the Notices and Subscription Forms”) 3 times within the period of about 1 year and 10 months (from January 2019 to October 2020). [73] I must emphasise that the Plaintiffs chose not to subscribe to the new shares when they were allotted to them. If the Plaintiffs had subscribed to these new shares, the Plaintiffs’ shareholding ratio against the 1st to 6th Defendant would remain the same at 46% (Plaintiffs) and 54% (1st to 6th Defendants). [74] In fact, if the Plaintiffs had even subscribed to some of the new shares the 1st to 6th Defendants may not have been able to obtain 75% of the 7th Defendant’s shares. Page 23 of 34 [75] There is no way for the 1st to 6th Defendants to know that the Plaintiffs would not purchase all or even some of the new shares allotted to them. [76] Therefore, the allegation that the Defendants had planned the issuance of the new shares in order to dilute the Plaintiffs’ shares is absolutely without merits. The 1st to 6th Defendants could not have known that the Plaintiffs would not subscribe to the new shares or at least some of them. [77] With all due respect to the Plaintiffs, they are the orchestrator of their own fate in this case. The fact of the matter is that the Plaintiffs were in the position to prevent the 1st to 6th Defendants from acquiring the new shares that increased their shareholding to 75%. However, the Plaintiffs chose not to subscribe to those shares (or even some of them) and in so doing allowed the option to be given to the 1st to 6th Defendants to acquire those shares (which the Plaintiffs’ did not purchase). [78] Instead of subscribing to the new shares the Plaintiffs decided to issue a letter of demand through their solicitors dated 28.10.2020 stating, inter alia, that the “right issue of shares is an oppressive acts intended to dilute” the Plaintiffs shares and that the Plaintiffs “reserve their rights to proceed with appropriate action to protect their interest”. However, no action was taken until this Originating Summons was filed on 13.8.2021. This is after the Special Resolution to Amend the Articles had been passed. I will deal with the issue of delay later in this Judgment. [79] I cannot stress enough that the Special Resolution to Amend the Articles provides for all the existing shareholders of the 7th Defendants to subscribe to the new shares based on their current shareholding ratio. There is no issue of the Plaintiffs’ shares being diluted and the case on point is Seah Eng Toh Daniel & Anor v Kingsley Khoo Hoi Leng & Ors [2016] 2 CLJ 695 where it was held as follows: “[36] I also do not see how the plaintiffs are adversely affected as the increase of capital was across the board and that it was not a case of the defendants diluting the plaintiffs’ majority as was the case in Howard Smith, supra, as well as the case of Cheah Ngun Ying v. Low Cheong & Sons Sdn Bhd & Ors [2010] 9 MLJ 385. The plaintiffs, as alluded to earlier, were Page 24 of 34 always the minority and remain the minority after the increase of capital. Unlike the case of Rea Company (No 005134 of1986), ex parte Harries [1989] 1 BCLC 383, this was not a case where the increase in capital was unilateral or done in secret. The instant case was also different from the case of Re Cumana Ltd [1986] 2 BCLC 430 where the offending act was a rights issue before capitalizing undistributed profits first. The Court of Appeal there upheld the finding that the proposed rights issue was part of a scheme to unfairly prejudice the minority shareholders’ interests.” (own emphasis added) [80] Therefore, based on Seah Eng Toh (supra) notwithstanding whether the 1st to 6th Defendants were able to anticipate what the Plaintiffs would do makes no difference. This is because the resolution to increase the 7th Defendant’s share capital by issuing new shares: i) affected all the shareholders equally; and ii) there was for a genuine need for the 7th Defendant to raise capital. The Amendments to the Articles of Association [81] As stated above, I have found that: i) there was a genuine commercial need for the capital injection into the 7th Defendant for its business operations and expansion; ii) the motion to increase the 7th Defendant’s share capital by issuing new shares was bone fide; and iii) the motion to issue new shares and the subsequent issuance of the said new shares were not done to dilute the Plaintiffs’ shares. [82] The 1st to 6th Defendants called for the 2019 EGM and tabled the motion for the Special Resolution to Amend the Articles. The said motion was passed by not less than 75% of the 7th Defendant’s shareholders. Page 25 of 34 [83] Given my earlier findings as stated above, I find no impropriety in the 2019 EGM which was done in compliance with the 7th Defendant’s Articles of Association and CA 2016. [84] The 1st to 6th Defendants’ stand that the shareholders of the 7th Defendant should be limited to the family members of Lim Teow Yong is no secret. [85] The 1st to 6th Defendants have openly made their position clear. [86] The Plaintiffs argue that the motion to Amend the Articles was done to circumvent the High Court’s decision in OS 123. However, I am unable to accept this argument for the following reasons: i) In OS 123 the 7th Defendant had essentially sought the Court’s determination as to whether based on the then or Previous Article 41 of the Articles of Association, only family members can be shareholders of the 7th Defendant, and if so whether the 5th Defendant and Wee Kee Kim (the 2nd defendant there) were in breach of the Previous Articles 34, 39, 40 and 41. ii) In short, the High Court in OS 123 determined that the Previous “Article 41 does not contain any restriction or prohibition with respect to the transfer of shares to ‘nonfamily members’ as contended” by the 7th Defendant. iii) The High Court also found that OS 123 “was not an abuse of the court process although the action ended in failure”. In other words, it can be concluded that OS 123 was not initiated in bad faith. iv) Based on what was held in OS 123, the 1st to 6th Defendants later (after about 3 years) motioned to amend the Previous Article 41 as well as the Previous Articles 5, 92 and 93 at the 2019 EGM. v) It is quite obvious (even if it is not specifically stated) that the 1st to 6th Defendants did so because the High Court in OS 123 had determined that the 7th Defendant’s (which would include that of the 1st to 6th Defendants’) interpretation of the Articles of Association that only family members can be shareholders of the 7th Defendant is wrong. Page 26 of 34 vi) In other words, the Articles of Association as it stood then does not prohibit non-family members to be shareholders. vii) That being the case the 1st to 6th Defendants’ thus decided to call for the 2019 EGM to Amend the Articles so that the said Articles are in line with the 1st to 6th Defendants’ interpretation. viii) I do not see anything wrong with this. It is within the 1st to 6th Defendants’ right to propose the Special Resolution to Amend the Articles. ix) The 7th Defendant’s Articles of Association (and CA 2016 2016) allow for amendments to be made to its Articles subject to a vote of not less than 75% of the 7th Defendant’s members. x) Further, the 7th Defendant is known as a family owned business just like its namesake and if the majority of the shareholders want to maintain that tradition there is nothing wrong with it as long as it is done lawfully. [87] Just because the Plaintiffs disagree with the Amendments to the Articles does not mean that the motion and resolution passed at the 2019 EGM are oppressive. [88] What is of crucial importance is that: i) The whole exercise of Amending the Articles was not done against proper company procedure and was in accordance with the 7th Defendant’s Articles of Association; ii) There was no visible departure from the standards of fair dealing, violation of the conditions of fair play or disregard of the Plaintiffs’ interest; iii) As long as they abide by the above principles, the 1st to 6th Defendants, as the majority shareholder of the 7th Defendant, are entitled to exercise their rights. [89] In the case of Wang Chih Tsang & Ors v. Cheng Pi Chun [2018] 2 MLJ 777, the Court of Appeal held as follows: “[28] Further s 181(1)(a) clearly says ‘that the affairs of the company is being conducted or the powers of the directors are being exercised’. Page 27 of 34 There are four directors of the third respondent but only the first respondent was named in the petition. Where is the evidence that the majority is oppressive towards her? Just because the first appellant allegedly had full control in the decision making of the third appellant, that fact if true, in our view, is not enough to show oppression. See Re Kong Thai Sawmill (Miri) Sdn Bhd." (own emphasis added) [90] As much as the Plaintiffs may not like or disagree with 1st to 6th Defendants, it does not change the fact that as the majority shareholder, the 1st to 6th Defendants have the legitimate right to rule by virtue of their majority shares (Re Kong Thai (supra)). If the roles were reverse would the Plaintiffs not have done the same, i.e. exercise their majority vote in their own favour. [91] This principle is made clear in the following passage in Re Kong Thai (supra) which bears repeating: “..... The mere fact that one or more of those managing the company possessed a majority of the voting power and, in reliance upon the power, made policy or executive decisions, with which the complainant does not agree, was not enough. Those who take interest in companies limited by shares have accepted majority rule. It is only when majority rule passes over into a rule oppressive of the minority, or in disregard of their interests, that section can be invoked. ….. “ (own emphasis added) [92] Therefore, I conclude that the motion to increase the 7th Defendant’s share capital, the issuance of the new shares and the subsequent Special Resolution to Amend the Articles were all done above board and in accordance with the 7th Defendant’s Articles of Association. [93] The 1st to 6th Defendants may have seized the opportunity to Amend the Articles when they had acquired 75% of the 7th Defendant’s shares, however, it was by no means done improperly or in bad faith. Page 28 of 34 [94] I would further point out that in so far as the Plaintiffs’ complaints regarding the Special Resolution to Amend the Articles are concerned, they are only in respect of the 5th Plaintiff and not the other Plaintiffs who are unaffected by the said Special Resolution. [95] The Plaintiffs’ complain that after the Special Resolution to Amend the Articles was passed the 7th Defendant had requested the 5th Plaintiff to regularise its shareholding to comply with the New Article 41. No further action was taken by the 7th Defendant and the Plaintiffs themselves have not shown what it is exactly that the Defendants could do (or have done) that would adversely affect the 5th Defendant’s shareholding save for that request. F] THE PLAINTIFFS’ CONDUCT, DELAY AND LACHES [96] Whilst the Plaintiffs paint themselves as being the victim in this Originating Summons, that is not the case. [97] I have taken into consideration the following additional matters in my decision to dismiss this Originating Summons: i) The Plaintiffs have not acted equitably. As can be seen from the background facts of this case, the Plaintiffs had filed the Derivative Action against the Defendants and at the same time filed the Winding Up Petition to wind up the 7th Defendant. The Plaintiffs did not succeed in both these actions. ii) Apart from the allegations of, inter alia, misconduct levelled against the 1st to 5th Defendants, the Plaintiffs had also raised on several occasions and at different times that the 1st to 6th Defendants had oppressed the Plaintiffs. These allegations of oppression against the 1st to 6th Defendants were raised as early as from the year 2016, based on the complaints raised by the Plaintiffs in their Affidavit In Support in Enclosure 2 (from paragraph 18 onwards) regarding interference with the affairs of the 5th Defendant. That being the case there is an inordinate delay of 7 years by the Plaintiffs in bringing this action. [98] It is ironic that the Plaintiffs had delayed in initiating this action as they have accused the 7th Defendant of the same thing in OS 123. Page 29 of 34 [99] Delay is an important factor in an oppression action under Section 346 CA 2016. In Re a Company [1986] BCLC 383 it was held as follows: “…... Most important, as it seems to me, is the fact that the petitioner made no protest for two and a half years. Having accepted payment from the company for so long, he cannot in my judgment now complain that he was being unfairly treated.” (own emphasis added) [100] The issue of delay and laches were also considered in the case of Tan Yong San v. Neo Kok Eng [2011] SGHC 30 in respect of an oppression action under Section 216 of the Singapore Companies Act (Cap 50, 2006 Rev Ed) (which is in pari materia with our section 346 CA 2016). The Singapore High Court held as follows: “105 In my judgment, therefore, the court in an action under s 216 of the Companies Act can take into account equitable defences such as laches and the "clean hands" doctrine in determining whether there has been oppressive conduct and in awarding any consequential relief. With regard to laches in particular, the English High Court in Re a company (No 005134 of 1986), ex parte Harries [1989] BCLC 383 has also held that laches may bar relief on a petition under s 459 of the UK Companies Act 1985. (own emphasis added) [101] At the very latest, the Plaintiffs had raised this issue of oppression in writing through their solicitors in 2020 or earlier as stated in paragraph 78 above where the Plaintiffs, inter alia, complained that the issuance of the new shares was oppressive. However, despite this, the Plaintiffs waited until the Special Resolution to Amend the Articles was passed before filling this Originating Summons about a year later in 2021. [102] The Plaintiffs are guilty of laches and the issue of laches was considered in OS 123 (Infolity (supra)) where Justice Harmindar (as he then was) with reference to the case of Cheah Kim Tong & Anor v. Taro Kaur [1989] 3 MLJ 252 held as follows: Page 30 of 34 “In Alfred Templeton & Ors, supra, Edgar Joseph Jr J (as he then was) alluded to the depiction of laches as “inaction with one’s eyes open”. His Lordship then referred to Halsbury’s Laws of England (3rd Edition) and stated: “Laches is an equitable defence implying lapse of time and delay in prosecuting a claim. A court of equity refuses its aid to a stale demand where the plaintiff has slept upon his rights and acquiesced for a great length of time. He is then said to be barred by laches. In determining whether there has been such delay as to amount to laches the court considers whether there has been acquiescence on the plaintiff’s part and any change of position that has occurred on the part of the defendant. The doctrine of laches rests on the consideration that it is unjust to give a plaintiff a remedy where he has by his conduct done that which might fairly be regarded as equivalent to a waiver of it or where by his conduct and neglect he has, though not waiving the remedy, put the other party in a position in which it would not be reasonable to place him if the remedy were afterwards to be asserted.” (own emphasis added) [103] The Plaintiffs continued failure to act despite alleging that the 1st to 6th Defendants have oppressed them is tantamount to laches. [104] Based on the numerous complaints the Plaintiffs had raised from as far back as in the year 2006 (as pleaded by the Plaintiffs in Enclosure 2, paragraph 18), if the Plaintiffs’ truly believed they were being oppressed by the 1st to 6th Defendants back then, then they ought to have filed an oppression action so much earlier. [105] By waiting for 7 years (from 2016) or, at the very latest, almost 3 years from 2018 (when the motion to increase the share capital was tabled and later passed), the only reasonable and inevitable inference that can be arrived at is that the Plaintiffs were never serious about any of the allegations of oppression they raised against the Defendants. G] NO DIVIDENDS DECLARED OR PAID [106] The Plaintiffs contend they have not been paid dividends but the directors of the 7th Defendants (being the 1st to 5th Defendants) are enjoying the profits of the 7th Defendant through salary etc. Page 31 of 34 [107] Firstly, the shareholders and directors hold very separate and distinct positions in a company. There is a clear demarcation and division of powers between these two primary organs (Amer Singh @ Mohinder Singh v. Kelana Resorts Sdn Bhd [2007] 8 MLJ 175). [108] The directors manage and run the company under CA 2016 and as the “managers” the directors are entitled to salary or remuneration or allowances. The directors do not enjoy the “profits” of the company. [109] Secondly, when it comes to declaring dividends, it is trite that: i) it is a decision which is within the discretion of the directors and it is an internal management issue (Impresive Circuit Sdn Bhd v. Setia Haruman Sdn Bhd & Ors [2021] MLJU 1508) and being a commercial decision, it is not for the Court to interfere with such a decision; and ii) the declaration or non-declaration of dividends affects all the shareholders of the company and not the Plaintiffs only as in the present case. In an action for minority oppression the oppressive act must single out the applicant(s)/plaintiff(s). The following are cases where the resolutions that were passed affected the shareholders of the company as whole and was held not to constitute oppression: a) Re Tong Eng Sdn Bhd (Loh Loon Keng, Petitioner) [1994] 1 MLJ 451 where it was held as follows: “To my mind, the two proposed resolutions would not affect the petitioner in particular as a member, shareholder or holder of debentures of the respondent company. The proposed resolutions would affect all the shareholders collectively without the petitioner being singled out for oppression, or unfair discrimination or other prejudicial treatment so as to trigger off the protection mechanism in s 181(1) of the Act. It is not the duty of the court in these circumstances to assume the role of policeman over the affairs of the respondent company. The two proposed resolutions involve the interests of the respondent company and its shareholders as a whole. It is for the shareholders, at the meeting to be convened, to decide whether the distribution of the dividend in specie should be approved or not. This is a Page 32 of 34 practice which is not unknown of and the court takes judicial notice of the fact that even public listed companies resort to this form of dividend distribution to reward their shareholders instead of distributing dividends in cash. Insofar as the proposed disposal of the property of the respondent company is concerned, this is again a matter for the shareholders to decide whether they wish to authorize the directors to have full power to sell the property. If the majority of the shareholders so decide, then the will of the majority will have to prevail. The acts complained of here do not affect the petitioner alone in his capacity as a member of the respondent company. (own emphasis added) b) Seah Eng Toh (supra) regarding a resolution that was passed to increase the company’s share capital which was held affected all the shareholders and not just the plaintiffs in that case. [110] Thirdly, and in any event, even if the 7th Defendant is making profits, the 7th Defendant is not obliged to declare dividends (HS Wang Holdings Sdn Bhd v. Borneo Pride Sdn Bhd & Ors [2017] MLJU 2239, at paragraph 72). H] CONCLUSION [111] For the reasons stated above, I dismissed this Originating Summons and after hearing arguments on costs, awarded costs of RM15,000/- in favour of the Defendants. Dated this 30th day of June, 2023 -SGD- (WAN MUHAMMAD AMIN BIN WAN YAHYA) Judge High Court of Malaya, Kuala Lumpur (Commercial Division (NCC 3)) COUNSEL FOR THE PLAINTIFFS Palani Vel (Ho Hon Keong together with him) Messrs Ho & Ho No.11-2(B), Jalan Solaris 3 Solaris Mont’ Kiara 50480 Kuala Lumpur. Tel: 03-6206 3808 Email: honhokl@gmail.com COUNSEL FOR THE DEFENDANTS Srimurugan Alagan Messrs Srimurugan & Co 33-5-3A Block C, Jaya One No. 72A Jalan University 46200 Petaling Jaya. Tel: 03-7621 0029 Email: jupiter_sri@hotmail.com LEGISLATION CITED Companies Act 2016  Section 346 Companies Act 1965  Section 181 Singapore Companies Act (Cap 50, 2006 Rev Ed)  Section 216 Page 34 of 34

Amer Singh @ Mohinder Singh v. Kelana Resorts Sdn Bhd [2007] 8 MLJ 175 2. Cheah Kim Tong & Anor v. Taro Kaur [1989] 3 MLJ 252 3. Howard Smith Ltd v. Ampol Petroleum Ltd & Ors [1974] AC 82 4. HS Wang Holdings Sdn Bhd v. Borneo Pride Sdn Bhd & Ors [2017] MLJU 2239 5. Impresive Circuit Sdn Bhd v. Setia Haruman Sdn Bhd & Ors [2021] MLJU 1508 6. Lim Chee Seong & Ors v. Lim Teow Yong & Sons Sdn Bhd & Ors [2012] MLRHU 932 7. Lim Teow Yong & Sons Sdn Bhd v. Infolity Sdn Bhd & Anor [2015] 1

Pan-Pacific Construction v. Ngiu Kee Corp [2010] 6 CLJ 721 9.

Re a Company [1986] BCLC 383 Re Kong Thai Sawmill (Miri) Sdn Bhd & Ors v. King Beng Sung [1978]

Re Tong Eng Sdn Bhd (Loh Loon Keng, Petitioner) [1994] 1 MLJ 451

Seah Eng Toh Daniel & Anor v Kingsley Khoo Hoi Leng & Ors [2016]

Tan Yong San v. Neo Kok Eng [2011] SGHC 30

Wang Chih Tsang & Ors v. Cheng Pi Chun [2018] 2 MLJ 777