1. LIM Swee Chong, Robert v 1. Tat Tat Wei, Victor (JA-24NCC-5-01/2019)

LIM SWEE CHONG, ROBERT (No. K/P Singapura: S1691135F)

LIM SWEE JOO, RICHARD (No. K/P Singapura: S1310204Z)

HO SANG BIN (No. Pasport Singapura: E5624455E)

PUAH KOT CHOON (No. Pasport Singapura: E5184611E) …PLAINTIF-PLAINTIF Page 2 of 37

TAT TAT WEI, VICTOR (No. Pasport Singapura: E4758551N)

CHONG KOK MING (No. K/P: 710911-06-5435)

CHONG KOK PENG (No. K/P: 800428-14-5215)

CKM METAL TECHNOLOGIES SDN BHD (No. Syarikat: 1101573-K) …DEFENDAN-DEFENDAN (YA DATO’ FREDRICK INDRAN X.A. NICHOLAS) JUDICIAL COMMISSIONER HIGH COURT OF MALAYA AT JOHOR BAHRU

27.10.2021 Page 3 of 37 GROUNDS OF JUDGMENT Introduction [1] The Plaintiffs’ OS is filed pursuant to section 346 of the Companies Act 2016 – [Tab 1 of the Plaintiffs’ Bundle of Authorities (‘PBOA’)]. [2] This is also known as a ‘minority oppression’ action. The corresponding section in the old Act is section 181 of the Companies Act 1965 – [TAB 2 of the PBOA]. [3] Vide the High Court Order dated 15.7.2019, this Court had previously ruled that the Plaintiffs have the requisite locus standi to bring this action as beneficial shareholders of the 4th Defendant (‘CKM’).

High Court Order dated 15.7.2019 – [Tab 1 of the Plaintiffs’ Core Bundle of Documents (‘CBD’) at pages 4 to 6]; and

(ii) Grounds of Judgment dated 11.9.2019 (‘GOJ’) – [Tab 2 of the CBD at pages 7 to 16]. [4] The decision of the High Court Order dated 15.7.2019 was affirmed by the Court of Appeal on 11.8.2020 with the dismissal of the Defendants’ appeal. Page 4 of 37 See: Court of Appeal Order dated 11.8.2020 – [Tab 3 of the CBD at pages 17 to 19]. The Matrix [5] The 1st Plaintiff (‘P1’ or ‘Robert’), 2nd Plaintiff (‘P2’ or ‘Richard’), 1st Defendant (‘D1’ or ‘Victor’) and 2nd Defendant (‘D2’ or ‘Chong’) started a joint venture company in Singapore known as Richinn Technology Pte Ltd (‘Richinn’) sometime in 2002. See: The Company search on Richinn – [Tab 4 of the CBD at pages 20 to 24]. [6] P1, P2, D1 and D2 expanded their joint venture business to Malaysia together with the 3rd Plaintiff (‘P3’ or ‘Paul Ho’) and the 4th Plaintiff (‘P4’ or ‘Simon Puah’) with the incorporation of CJ Stainless Steel Sdn Bhd [Company No.: 660254-W] (‘CJ Stainless’) on 21.7.2004. See: The CCM search on CJ Stainless – [Tab 5 of the CBD at pages 25 to 30]. [7] CJ Stainless is primarily involved in the laser cutting business, manufacturing of metal parts and components for machinery and equipment. [8] The current shareholders of CJ Stainless are as follows:- Page 5 of 37 [9] The current directors of CJ Stainless are as follows:-

Lim Swee Chong (P1);

(ii) Ho Sang Bin (P3);

(iii) Puah Kot Choon (P4);

(iv) Chong Kok Ming (D2); and

Victor Tan Tat Wei (D1). [10] CJ Stainless is registered with a Licensed Manufacturing Warehouse (‘LMW’). As an LMW company, CJ Stainless is primarily intended to target the export-oriented market whose entire production of not less than 80% are meant for export. CJ Stainless fulfilled this condition by servicing as subcontractor for Richinn. [11] In order not to breach the LMW restriction, the Plaintiffs together with D1 and D2 decided to incorporate the 4th Defendant (‘CKM’) to service the local markets in Malaysia. Shareholder Number of Shares Percentage of Issued Shares (%) 1 Robert Lim Swee Chong 199,501 28.50% 2 Richard Lim Swee Joo 199,501 28.50% 3 Paul Ho Sang Bin 17,500 2.50% 4 Simon Puah Kot Choon 17,500 2.50% 5 Chong Kok Ming 113,051 16.15% 6 Victor Tan Tat Wei 152,951 21.85% Page 6 of 37 [12] CKM was initially incorporated on 16.7.2014 by D2 and D3 with a paid-up capital of RM2.00. [13] The objective of incorporation of CKM was primarily for the business of trading in all kinds of metal and stainless-steel products. [14] The current shareholders of CKM on the share registry are as follows:- [15] The current directors of CKM are as follows: -

Tan Tat Wei, Victor (‘D1’);

(ii) Chong Kok Ming (‘D2’); and

(iii) Chong Kok Peng (‘D3’). See: The CCM search on CKM – [Tab 6 of the CBD at pages 31 to 36]. Shareholder Number of Shares Percentage of Issued Shares (%) 1 Chong Kok Ming 475,000 55.88% 2 Victor Tan Tat Wei 374,999 44.11% 3 Chong Kok Peng 1 0.01% Page 7 of 37 The Law [16] Pursuant to section 346(1) of the Companies Act 2016, it is the Plaintiffs’ case that the Defendants have carried out conduct in a manner oppressive to the Plaintiffs and/or in disregard to the Plaintiffs’ interests as beneficial shareholders of CKM. [17] The cases on minority oppression are well settled. We do not propose to labour on the law save for referring to the following authorities: -

Owen Sim Liang Khui v Piasau Jaya Sdn Bhd & Anor [1996] 1 MLJ 113 at p 114, 115, 128 and 129 – [Tab 3 of the PBOA];

(ii) Kitnasamy s/o Marudapan v Nagatheran S/O Manogar & Anor [2000] 1 SLR 542 at p 543, 551 and 552 – [TAB 4 of the PBOA] where the Singapore Court of Appeal adopted the same principles in Owen Sim (supra);

(iii) Re Kong Thai Sawmill (Miri) Sdn Bhd; Kong Thai Sawmill (Miri) Sdn Bhd & Ors v Ling Beng Sung [1978] 1 LNS 170 – [Tab 5 of the PBOA];

(iv) Pan-Pacific Construction Holdings Sdn Bhd v Ngiu-Kee Construction (M) Sdn Bhd & Anor [2010] 6 CLJ 721 at p 738 – [Tab 6 of the PBOA] where the Federal Court held as follows: “[25] Therefore, in order to succeed in its petition pursuant to s. 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 Page 8 of 37 exercised in an oppressive manner or in disregard of its interests, or to its prejudice some unfairly discriminatory or prejudicial act of the company has been done or threatened, or that some resolutions of the members, debenture holders or any class of them has been passed or is proposed to be passed. [26] In other words s. 181 permits judicial remedy on four categories of conduct, namely, oppressive conduct, conduct in disregard of interests, unfairly discriminatory conduct or prejudicial conduct.”

Koh Jui Hiong & Ors v Ki Tak Sang & Another Appeal [2014] 2 CLJ 401 – [Tab 7 of the PBOA];

(vi) Looh Siong Chee v Numix Engineering Sdn Bhd & Ors and Other Appeals [2015] 7 CLJ 561 at p 562 and 563 – [Tab 8 of the PBOA];

(vii) Datuk Kasi KL Palaniappan v Menara Embun Sdn Bhd & Ors [2018] 1 LNS 1607 – [Tab 9 of the PBOA];

(viii) Gue See Sew & Ors v Heng Tang Hai & Ors [2020] MLJU 46 – [Tab 10 of the PBOA]; and

(ix) Jet-Tech Materials Sdn Bhd & Anor v Yushiro Chemical Industry Co Ltd & Ors and another appeal [2013] 2 MLJ 297 at [27] – [Tab 11 of the PBOA]. [18] In essence, section 346(1) of the Companies Act 2016 provides for the following 4 categories of acts or omission as grounds for the court to grant relief under section 346(2) of the Companies Act 2016:-

oppression of the plaintiff as a shareholder of the company;

(ii) disregard of the plaintiff’s interest as the company’s shareholder; Page 9 of 37

(iii) unfair discrimination of the plaintiff in the plaintiff’s capacity as a shareholder of the company; and

(iv) prejudice to the plaintiff as a shareholder of the company. The Circumstances (adopted from the Plaintiffs’ submissions) [19] The Plaintiffs have advanced 5 grievances as to how the affairs of CKM are being conducted in an oppressive manner or that the powers of the directors are being exercised in an oppressive conduct in disregard of the interests of the Plaintiffs, discriminatory or commercially unfair to the Plaintiffs. [20] The 5 Grievances are as follows:-

First Grievance: Breach of Trust and Mutual Agreement and/or Defendants’ refusal to transfer the shares held on trust back to the Plaintiffs;

(ii) Second Grievance: Dilution of the Plaintiffs’ shareholding and/or Hostile Takeover;

(iii) Third Grievance: Defendants’ refusal and/or failure to distribute dividend;

(iv) Fourth Grievance: Plaintiffs are left out from the management and/or affairs of CKM and/or Removal of check and balance; and

Fifth Grievance: Breakdown of Mutual Trust and Confidence. [21] The Defendants throughout their affidavits have not provided ostensible explanations or defences to the grievances complained. Page 10 of 37 [22] In point of fact the Defendants have only mounted a challenge on the Plaintiffs’ locus standi as shareholders in presenting the OS which has already been determined vide a High Court Order dated 15.7.2019 and affirmed by the Court of Appeal on 11.8.2020. [23] The issue is thus now res judicata. [24] In the Court of Appeal case of Hartecon JV Sdn Bhd & Anor v Hartela Contractors Ltd [1996] 2 MLJ 57 at p 58 – [Tab 12 of the PBOA], it was held as follows:- “(1) Once a judge makes a ruling, substantive or procedural, final or interlocutory, it must be adhered to and may not be reopened. Although the first decision was made on an interlocutory matter which was purely procedural in nature, it was nevertheless binding on the court and on all parties to the lis until its reversal on appeal. The decision of the judge overruling the respondent’s preliminary objection rendered the point taken res judicata (see pp 65G and 66H); Government of Malaya v Dato’ Chong Kok Lim [1973] 2 MLJ 74 followed and Harrison v Harrison [1955] 1 Ch 260 distinguished.

A failure to adhere to the principle of res judicata may lead to chaos in the conduct of civil proceedings. In this case, on the assumption of the law made by counsel before the court, there would have been no bar to the judge to re-review his second decision reversing himself. The process could then be repeated ad infinitum with no conclusion (see p 66E).” Page 11 of 37 [25] The Defendants contend that the RM250,000-00 received from the dividend declared from CJ Stainless was not towards the paid-up capital of CKM but instead is a loan to D1 and D2 which had already been repaid. [26] However, no contemporaneous evidence was produced in court either in the form of a resolution, agreement, correspondences, minutes of meeting or any emails to support the Defendants’ contention. [27] Let us now turn to each grievance in turn. First Grievance: Breach of Trust and Mutual Agreement and/or Defendants’ refusal to transfer the shares held on trust back to the Plaintiffs. [28] So as not to jeopardise and compromise ‘CJ Stainless’ LMW license, it was mutually agreed between the Plaintiffs, D1 and D2 that CKM will be setup and used to target the local Malaysian market. [29] In order for the Plaintiffs, D1 and D2 to personally inject fresh funds into CKM, D1 suggested to distribute the dividends from CJ Stainless and use that sum towards the paid-up capital of CKM. See: D1’s email dated 20.9.2014 – [Tab 7 of the CBD at page 37]. “CKMMT Is setup for sales with local Malaysia companies so that CJSS’s LMW requirement is not compromise. Page 12 of 37 In order not to incur directors & shareholders to input fresh fund into CKMMT, I would like to suggest to distribute a dividend of RM300,000. This amount will be transfer to CKMMT corporate bank account for its running capital.” [30] Subsequently, parties mutually decided that CJ Stainless will declare a dividend of RM250,000-00 to be injected into CKM as fresh capital. See: The table in D1’s email dated 20.9.2014 – [Tab 7 of the CBD at page 37]. [31] On 15.10.2014, the Plaintiffs, D1 and D2 unanimously put their intention and agreement in writing and mutually signed and passed the resolution confirming the contribution of RM250,000-00 as paid-up capital of CKM in their respective shareholding percentage. See: The Resolution dated 15.10.2014 – [Tab 8 of the CBD at page 38]. [32] The dividend of RM250,000-00 declared was captured in CJ Stainless’ General Ledger and its Financial Statements ended 31.12.2014. See:-

CJ Stainless’ General Ledger – [Tab 9 of the CBD at page 39]; and

(ii) CJ Stainless’ Financial Statements ended 31.12.2014 – [Tab 10 of the CBD at pages 40 to 42]. [33] P1 and D1 jointly signed the cheque dated 15.10.2014 for the payment of RM250,000-00 to CKM as paid-up capital. See: HLBB cheque dated 15.10.2014 – [Tab 11 of the CBD at pages 43 to 44]. [34] CKM’s own Financial Statement for the year ended 31.12.2014 acknowledged and recorded the receipt of RM250,000-00 as new working capital which is consistent with the Plaintiffs’ case. [35] With the injection of fresh funds, CKM’s paid-up capital was increased from RM2.00 to RM250,000-00. It is to be noted that at all material times, D3 was not involved and was only a nominal party. See: CKM’s Financial Statement for the year ended 31.12.2014 – [Tab 12 of the CBD at pages 45 to 49]. [36] In consideration of the injection of fresh funds into CKM, it was mutually agreed between the Plaintiffs, D1 and D2 that the Plaintiffs were the beneficial owners of the shares equivalent to 62% or 155,000 out of 250,000 shares issued and subscribed at that material time (“Plaintiffs’ shares”). Page 14 of 37 [37] It was their mutual agreement that the proportion of the Plaintiffs’ shares shall reflect the same shareholding as CJ Stainless as agreed by all parties vide the Resolution dated 15.10.2014 as follows:- Mutual Agreement / Understanding [38] Sometime on or around 11.11.2015, a meeting was held between the Plaintiffs, D1 and D2. In that meeting, it was mutually agreed that the name of the Plaintiffs shall be added and registered as the new shareholders of CKM to reflect their individual shareholding. [39] Until the transfer exercise is completed, it was mutually agreed that the Plaintiffs’ shares will be held on trust by D1 and D2 and/or D3. [40] This is evidenced from the minutes of meeting prepared and circulated to the Plaintiffs, D1 and D2. The content of this minutes of meeting is not disputed by the Defendants. Shareholder Number of Shares Percentage of Issued Shares (%) 1 Robert Lim Swee Chong 71,250 28.50% 2 Richard Lim Swee Joo 71,250 28.50% 3 Ho Sang Bin 6,250 2.50% 4 Puah Kot Choon 6,250 2.50% 5 Chong Kok Ming 40,375 16.15% 6 Victor Tan Tat Wei 54,625 21.85% Page 15 of 37 “13) to add in all shareholders name in CKMMT’s form 24, will get secretary to do resolution to add shareholders. In last year all directors have put their dividend received. From CJSS to CKMMT as paid up capital, so directors will need to decide each shareholding will be parked at which director’s account, so from each director’s account will show his shareholding is being parked at which director’s account Director’s Name Amount contributed (RM) Chong Kok Ming 40,375.00 Ho Sang Bin 6,250.00 Lim Swee Chong 71,250.00 Lim Swee Joo 71,250.00 Puah Kot Choon 6,250.00 Tan Tat Wei Victor 54,625.00 Total: 250,000.00 Current shareholding showing at CKMMT’s Form 24, this is to make CKMMT as local own company Director’s Name Amount (RM) Chong Kok Ming 175,000.00 Tan Tat Wei Victor 74,999.00 Chong Kok Peng 1.00 [41] In fact, the content of the minutes was further confirmed by D2 with his own comments in red on 17.11.2015 where he asked for the transfer and registration of the shares in the name of the Plaintiffs to be kept in abeyance. Page 16 of 37 See: The Minutes of Meeting held on 11.11.2015 – [Tab 13 of the CBD at pages 50 to 53]. [42] From the meeting held on 11.11.2015 until to-date, the Plaintiffs’ shares were not transferred, allotted or registered in the name of the Plaintiffs. [43] On 1.11.2018, the Plaintiffs vide their solicitors demanded for the Plaintiffs’ shares to be allotted and registered in the name of the Plaintiffs. See: The Plaintiffs’ solicitors’ letter dated 1.11.2018 – [Tab 14 of the CBD at pages 54 to 56]. [44] Notwithstanding this, the Defendants refused to acknowledge and recognise the Plaintiffs as shareholders of CKM. [45] D1 and D2 also refused to acknowledge that the Plaintiffs’ shares were held on trust by them. [46] In breach of that mutual trust and understanding, the Defendants totally disregarded the interest of the Plaintiffs as the shareholders of CKM. [47] The Plaintiffs’ contend that the Defendants’ conduct continues to be oppressive until to-date resulting in unfair discrimination and prejudiced to the Plaintiffs as it deprives the Plaintiffs of their rights, interest and legitimate expectation as shareholders of CKM. Page 17 of 37 [48] The Plaintiffs’ further contend that if the sum of RM250,000-00 was indeed a loan to D1 and D2 as they alleged, the cheque would have been paid to D1 and D2 in their names. An agreement, minutes or resolution would have been passed to capture the loan. [49] Instead, what we have here is the Resolution dated 15.10.2014 that was unanimously passed, signed and undisputed by the Defendants. [50] Similarly, if there was any error to the minutes of meeting dated 11.11.2015, it would have reasonably been expected of D1 and D2 that they would have raised an objection to the contents. [51] In Toralf Mueller v Alcim Holding Sdn Bhd [2015] MLJU 779 – [Tab 13 of the PBOA], the Court found oppression where the majority shareholders failed and/or refused to acknowledge shares held on trust. [52] This High Court decision was affirmed in the Court of Appeal. See the Court of Appeal Order dated 8.9.2016 at Tab 14 of the PBOA. Second Grievance: Dilution of the Plaintiffs’ shareholding. [53] The Plaintiffs’ second grievance is on the dilution of the Plaintiffs’ shares as illustrated in the paragraphs above. [54] Prior to the dilution by D1 and D2, the Plaintiffs’ shares at the material time were 62% or equivalent to 155,000 of the 250,0000 shares issued and subscribed. Page 18 of 37 [55] Unknown to the Plaintiffs, the authorised share capital of CKM was increased on or around 29.6.2018 without any notice to or knowledge of the Plaintiffs from RM400,000-00 to RM850,000-00 divided into 850,000 shares of RM1-00 each. [56] The paid-up capital was also fully subscribed and increased from RM250,000-00 to RM850,000-00. Based on the ‘Return of Allotment of Shares’ dated 4.7.2018 lodged by the company secretary with CCM, the new shares were allotted to D1 and D2 on 29.6.2018. See:-

The Return of Allotment of Shares lodged with CCM on 4.7.2018 – [Tab 15 of the CBD at pages 57 and 58]; and

(ii) Register of Member lodged by the company secretary with CCM – [Tab 16 of the CBD at pages 59 and 60]. Shareholder Number of Shares Percentage of Issued Shares (%) 1 Robert Lim Swee Chong 71,250 28.50% 2 Richard Lim Swee Joo 71,250 28.50% 3 Ho Sang Bin 6,250 2.50% 4 Puah Kot Choon 6,250 2.50% 5 Chong Kok Ming 40,375 16.15% 6 Victor Tan Tat Wei 54,625 21.85% Page 19 of 37 [57] The increase in the paid-up capital resulted in the dilution of the Plaintiffs’ shareholding from 62% to 18.23% or equivalent to 155,000 out of 850,000 shares issued and subscribed. [58] Thus, it is the strong contention of the Plaintiffs’ that dilution of the Plaintiffs’ shares is oppressive and is a total disregard of the Plaintiffs’ rights and interest as shareholders of CKM. This continues till to-date as there has been no change in the shareholding. [59] The Plaintiffs’ state that they were at all times ready, able and willing to subscribe to the increase in the paid-up capital and was prepared to pay for the additional increase. See: The Plaintiffs’ solicitors’ letter dated 1.11.2018 – [Tab 14 of the CBD at pages 54 to 56]. [60] Notwithstanding the Plaintiffs’ willingness and ability, the Defendants vide their solicitors’ letter dated 15.11.2018 rejected the Defendants’ request in toto which is a further testament of D1 and D2’s continuous oppression and unfair discrimination of the Plaintiffs. See: The Defendants’ solicitors’ letter dated 15.11.2018 – [Tab 17 of the CBD at page 61]. [61] The dilution of the Plaintiffs’ shares clearly prejudiced the Plaintiffs as shareholders of CKM. From a position of a majority, the Plaintiffs’ shares have been diluted into becoming a minority. Page 20 of 37 [62] In Toralf Mueller (supra) at [135] to [138], Wong Kian Keong JC (as he then was) found oppression on the issue of dilution of the petitioner’s shareholding. [63] Also, in Tan Tung Kwok & Ors v Lau Kah Hing & Ors [2019] MLJU 1807 at [64] and [67] – [Tab 15 of the PBOA], it was held that an increase in the paid up capital to dilute the plaintiffs’ shareholdings amounted to an oppression. This is what the Court had to say: - “[64] The Defendants plainly had the collateral purpose of diluting the Plaintiffs; shareholdings and had acted in an oppressive manner, more so when the Plaintiffs were not given the opportunity to take up proportional increases in the share capital. [67] The views expressed in Minority Shareholders (5th ed, 2015, Joffe, Drake, Richardson, Lightmand and Collingwood), page 363, are pertinent: “Even if the company is not a quasi-partnership, the improper exercise by the directors of their power to allot shares is capable of amounting to unfair prejudice, particularly where the allotment is in bad faith or for an ulterior purpose. An obvious example is where the directors have acted secretly in order to dilute the minority’s shareholding. So in Re a Company (No 005134 of 1986), ex p harries the director and majority shareholder had, without informing the petitioner, secretly allotted further shares to himself, so as to increase his holding from 60 per cent to 96 per cent, and reduce the petitioners’ holding from 40 per cent to 4 per cent. Peter Page 21 of 37 Gibson LJ observed that he could not conceive of “a more blatant case of unfairly prejudicial conduct” … [64] Further, in ISM Sendirian Berhad v Queensway Nominees (Asing) Sdn Bhd & Ors and other suits [2020] MLJU 388 at [120] – [Tab 16 of the PBOA], the case of Numix Engineering v Magic Telcom [2011] 9 MLRH 878 was referred to whereby Anantham Kasinather J ruled that a dilution of the petitioner’s shareholding from 65% to 13% amounted to oppression of the petitioner’s interests as a shareholder in the company. [65] The dilution of the Plaintiffs’ shares cannot be coincidental as the relationship between the Plaintiffs and D1 & D2 had irretrievably broken down since the beginning of January 2018. Soon after, the Plaintiffs were kept out from the management and affairs of CKM and the dilution of the Plaintiffs’ shares followed suit. See: The Defendants’ own admission in paragraph 78 of their Affidavit dated 6.3.2019 (Enclosure 8) – [Tab 18 of the CBD at pages 62 to 64]. Third Grievance: Defendants’ refusal and/or failure to distribute dividend. [66] In paragraph 72 of the Defendants’ Affidavit dated 6.3.2019 (Enclosure 8), the Defendants contended that the sum of RM212,806.70 is not sum allocated for dividend payments to the shareholders of CKM but sums paid to vendors of CKM. Page 22 of 37 [67] This runs contrary to the documentary evidence vis-à-vis the Minutes of Meeting dated 11.11.2015 which was circulated to the Plaintiffs, D1 and D2 vide Hui Wen’s email. See: The Minutes of Meeting dated 11.11.2015 – [Tab 13 of the CBD]. [68] The relevant part of the minutes of meeting is now reproduced in verbatim:- “CKKMT has issued all adjustment to the joint account (D1 and D2’s joint bank account) and total fund is RM212,806.70. Below is the table showing distribution according to shareholding. Conclusion: The distribution will on hold till next meeting. SHAREHOLDERS SHAREHOLDING Total CKMMT = 212,806.70 HO SANG BIN 17,500.00 2.50% 5,320.14 PUAH KOT CHOON 17,500.00 2.50% 5,320.14 LIM SWEE JOO 199,501.00 28.50% 60,649.87 LIM SWEE CHONG 199,501.00 28.50% 60,649.87 TAN TAT WEI VICTOR 152,951.00 21.85% 46,498.30 CHONG KOK MING 113,05051.00 16.15% 34,368.39 700,004.00 100.00% 212,806.70 [69] The parts highlighted in red are comments to the minutes of meeting made by D2. Page 23 of 37 See: D2’s email dated 17.11.2015 at 11.54 am. – [Tab 13 of the CBD at pages 50 to 53]. [70] The contemporaneous evidence speaks for itself. If this was sums to be paid to vendors of CKM as alleged by D1 and D2, the table above would not show the names of the Plaintiffs, D1 and D2 and how much dividends will be paid to each and every one of them as shareholders of CKM. [71] Further to that, D2 would not use words such as “Conclusion: The distribution will on hold till next meeting” which all points to distribution of dividends to shareholders of CKM. We further submit that if it was sums to be paid to vendors of the Company, the word ‘payment’ will be used as opposed to ‘distribution’. [72] Pursuant to a meeting held on 3.10.2017 in Yong Peng between the Plaintiffs, D1 and D2, a summary of the minutes of meeting was circulated to all the parties vide Hui Wen’s email dated 5.10.2017 at 11.54.08 am and followed by the comments made by P3 vide his email on the same day at 6.23 pm. See: The summary of the minutes of meeting vide Hui Wen’s email and the comments made by P3 vide his email – [Tab 19 of the CBD at page 65]. [73] In both the emails, it was resolved that a sum of RM300,000-00 will be declared and distributed to all the shareholders of CKM after settling the debtors and creditors. Page 24 of 37 Hui Wen’s email: “3) Distribute first dividend RM300,000.00 from CKM” P3’s email: “Item 3 – Upon settling all the debtors and creditors first than distribute the RM300,00-00, first dividend from CKM” [74] In the circumstances, we submit that the minutes of meeting dated 11.11.2015 and the proposed distribution of dividends irrefutably and conclusively confirms the Plaintiffs as shareholders of CKM. [75] The Defendants in their affidavits in reply has no explanation or defence to the above save for bear denial. D1 and D2 simply contend that the distribution of dividends of RM300,000-00 were solely for themselves. [76] If the dividends of RM300,000-00 were solely for D1 and D2, it does not explain why the same was discussed with the Plaintiffs. [77] The following email exchanges will further corroborate the Plaintiffs’ version:-

P3 in his email dated 20.10.2017 at 4.49 pm suggested that the dividend of RM300,000-00 from CKM be paid into D1 and D2’s joint account and thereafter to be distributed to the Plaintiffs rather than to pay into CJ Stainless;

(ii) D2 in his email in reply dated 21.10.2017 at 9.52 am disagreed and maintained that he will transfer the dividends to CJ Stainless; Page 25 of 37

(iii) P3 in his email dated 21.10.2017 at 12.44 pm requested D2 to reconsider his decision because CKM’s dividend pay-out is already after tax and any payment into CJ Stainless from CKM may further attract unnecessary tax;

(iv) D2 vide his email dated 21.10.2017 at 6.42 pm in response said he will decide in due course;

Thereafter, D2 in his email dated 26.10.2017 at 5.06 pm refused to distribute the dividend of RM300,000-00 as previously agreed on the pretext that there was insufficient cash flow. See: The email exchanges between P3 and D2 which were circulated to all the shareholders of CKM – [Tab 20 of the CBD at pages 66 to 68]. [78] This dividend of RM300,000-00 due and owing to the Plaintiffs have not been distributed until today. The Plaintiffs are unaware of the status of the dividend sum and are deeply concerned over the whereabouts of the said monies. [79] Paragraphs 74 and 75 of the Defendants’ Affidavit dated 6.3.2019 (Enclosure 8) refuted the Plaintiffs’ claim for the dividend and deny that the Plaintiffs are entitled to the dividend as the Plaintiffs have no legal or beneficial interest in CKM. [80] The refusal to distribute dividends to the Plaintiffs who are legitimate shareholders of CKM falls all square within the meaning of section 346 (1) of Page 26 of 37 the Companies Act 2016. It is oppressive and a blatant disregard of the Plaintiffs’ interest as shareholders. [81] It is clear that no dividends would be declared and distributed to strangers other than to the shareholders of the company. It is also pertinent to note that D3 was never part of the equation or discussion between the parties. [82] When it comes to evaluation of evidence, the Courts have always preferred to accept documentary evidence as the more reliable source as opposed to the Defendants’ bear denial unsupported by any contemporaneous evidence. [83] See the following cases:-

Guan Teik Sdn Bhd v Hj Mohd Noor [2000] 4 CLJ 324 at p 324, 325 and 330 – [Tab 17 of the PBOA];

(ii) Saminathan v Pappa [1981] 1 MLJ 121 at p 121 and 126 – [Tab 18 of the PBOA];

(iii) Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2 MLJ 229 at p 234 – [Tab 19 of the PBOA]; and

(iv) Muniandy & Ors v Public Prosecutor [1966] 1 MLJ 257 at p 258 – [Tab 20 of the PBOA]. [84] D1 and D2 themselves have shed some evidence as to how D1 and D2 on 4.3.2019 paid themselves dividend of RM212,500-00 for the financial year ended 31.12.2018 without the knowledge of the Plaintiffs. Page 27 of 37 [85] It is unknown if the second tranche of dividend amounting to the same RM212,500.00 declared on 25.12.2019 has been paid to D1 and D2. It is further unknown if any further dividend was declared. [86] This is total disregard of the Plaintiffs’ interest as CKM’s shareholders. The refusal to distribute dividend to the Plaintiffs’ on pari passu principle is an unfair discrimination of the Plaintiffs as shareholders of the company and the Plaintiffs’ interest. [87] Whilst D1 and D2 handsomely pay themselves, the Plaintiffs continue to be prejudiced and deprived of any payment of dividends. Fourth Grievance: Plaintiffs are left out from the management and/or affairs of the company/Removal of check and balance. [88] It is not a disputed fact that the relationship between the Plaintiffs, D1 and D2 had irretrievably broken down since January 2018. [89] Before their relationship turned sour, it was the mutual trust and understanding between the parties that D1 and D2 will be involved in the daily operation and running of CKM whilst the Plaintiffs shall have a say in the major decision making in CKM. [90] Since the Plaintiffs’ capital injection into CKM in 2014, D1 and D2 have been regularly reporting to the Plaintiffs on the affairs, management and daily running of CKM. Page 28 of 37 [91] This includes the weekly sales report and also the monthly financial status of the company known as the “CKM Account Management Report” (collectively hereinafter referred to as ‘Reporting’) as a form of check and balance mechanism. See the monthly “CKM Account Management Report” for:-

Year 2014 – Exhibit “Plf 21” at pages 194 to 214 of Enclosure 2;

(ii) Year 2015 – Exhibit “Plf 22” at pages 216 to 269 of Enclosure 2;

(iii) Year 2016 – Exhibit “Plf 23” at pages 271 to 668 of Enclosure 2 and pages 669 to 728 of Enclosure 3; and

(iv) Year 2017 – Exhibit “Plf 24” at pages 730 to 916 of Enclosure 4. See the weekly sales report for: -

Year 2015 – Exhibit “Plf 25” at pages 918 to 924 of Enclosure 4;

(ii) Year 2016 – Exhibit “Plf 26” at pages 926 to 962 of Enclosure 4; and

(iii) Year 2017 – Exhibit “Plf 27” at pages 964 to 987 of Enclosure 4. [92] The weekly and monthly reporting to the Plaintiffs stopped from the beginning of 2018 until to-date coinciding with the breakdown of relationship between the parties. [93] There were no reasons shown nor was there cause for the removal of the check and balance which has been in practise since 2014. Page 29 of 37 [94] D1 and D2 attempt to justify this by saying that due to the personal loan given by the Plaintiffs to them, the Plaintiffs wanted to monitor the financial position of CKM. See: Paragraph 77 of the Defendants’ Affidavit dated 6.3.2019 (Enclosure 8) – [Tab 18 of the CBD at pages 62 to 64]. [95] It was stressed that it makes no sense. If it was a personal loan to D1 and D2, the Plaintiffs would be more interested to know what assets do D1 and D2 posses in their personal capacity. The Plaintiffs would not be interested in CKM which is a separate legal entity. [96] The timeline and chronology of events are improbable and do not lend any credence to D1 and D2’s contention. If it was true that the sum of RM250,000-00 was a personal loan and that the loan had been fully repaid by the end of December 2015 as they alleged, there is no reason for the Defendants to continue sending CKM’s weekly and monthly performance and financial reports to the Plaintiffs until the end of 2017 and only stopped when their relationship had irretrievably broken down beginning of January

This cannot be mere coincidence. [97] Consequentially, the Plaintiffs vide their solicitors letter dated 1.11.2018 requested for a board seat in CKM for each of them. This request was rejected by the Defendants and the Defendants even refused to acknowledge the Plaintiffs as shareholders of CKM.

The Plaintiffs’ solicitors’ letter dated 1.11.2018 – [Tab 14 of the

(ii) The Defendants’ solicitors letter dated 15.11.2018 – [Tab 17 of the CBD]. [98] Having removed the check and balance mechanism that was put in place to safeguard the interests of the Plaintiffs and having rejected the Plaintiffs’ request for a board seat, the Plaintiffs are in total darkness over the affairs and financial status of CKM and are completely shut out from participating in the company. [99] In the circumstances, it is overwhelmingly clear that the conduct of D1 and D2 is oppressive, unfair and prejudicial to the interests of the Plaintiffs as shareholders of CKM. Fifth Grievance: Breakdown of Mutual Trust and Confidence. [100] Collectively, the First to the Fourth Grievances account to the breakdown of mutual trust and confidence. [101] D1 and D2 themselves have admitted and conceded to the fact that their relationship with the Plaintiffs have irretrievably broken down. Suffice to say, all trust and confidence that come with that relationship no longer exist between the parties. Page 31 of 37 [102] This is further fortified by the fact that CKM in the total control hands of D1 and D2 since the beginning of 2018 had departed and/or deviated from the purpose of its incorporation as a trading house to complement CJ Stainless in sales in the local market whilst CJ Stainless focuses on laser cutting and fabrication works. [103] The Defendants themselves acknowledge the fact that CKM was setup as a trading company to carry out sales in Malaysia so that CJ Stainless’ LMW license is not jeopardised. See: Paragraph 5.2 above. [104] All these changed with CKM acquiring steel laser cutting and fabrication machines beginning of January 2018 coinciding with D1 and D2 taking over full control of CKM and shutting the Plaintiffs out from the management and affairs of the company. See: The printouts from CKM’s website (http://www.ckmmt.com.my/) - [Tab 21 of the CBD at page 69]. [105] CKM is said to be now in direct competition with CJ Stainless in the fabrication and steel laser cutting business and is a conduct disregarding the entire agreement and understanding that constituted the very basis of the commercial relationship formed between the Plaintiffs, D1 and D2 at the genesis of the formation of the company. Page 32 of 37 [106] Prior to CKM departing from its course, D1 and D2 never consulted or sought the views or agreement of the Plaintiffs despite knowing very well that the Plaintiffs have a 62% stake in the company and their shares are being held on trust by D1 and D2. [107] The Plaintiffs’ stoutly believe that as trustees to the Plaintiffs, D1 and D2 breached that duty of care and/or fiduciary duties to the Plaintiffs when they acted against the interests of the Plaintiffs without consultation and agreement from the Plaintiffs. [108] In this regard, reference is drawn to by the case of Toralf Mueller (supra) whereby the Court held that trustees owe a duty of care and/or fiduciary duties to the petitioner. This includes a duty to act in the interest of the petitioners. [109] The business address and physical business of CKM were also changed without any notification or agreement from the Plaintiffs after D1 and D2 took over control and excluded the Plaintiffs from the management of the company. [110] The entire business of CKM has been moved across districts, hundreds of kilometres away from Batu Pahat to Iskandar Puteri without the knowledge or agreement from the Plaintiffs. See: The notification of change in business address dated 5.1.2018 lodged with the CCM together with the Directors’ Circular Page 33 of 37 Resolution dated 1.5.2018 – [Tab 22 of the CBD at pages 70 to 72]. [111] Cumulatively, it was said that the timing of all these events was no coincidence. They were meticulously planned and carried out by D1 and D2 with the intention of depriving the Plaintiffs of their rights and interests as shareholders of CKM. [112] With the sudden change of the business address, there is now zero supervision and a total lack of accountability. The Plaintiffs are denied any legitimate expectation to participate in the company. [113] In Gue See Sew & Ors (supra), Ong Chee Kwan JC held that:- “[62] Where the breaches result in an unfairness in the context of the agreement and conduct expected of the parties which is prejudicial or unfairly discriminatory to the complainant as a member of the company or a blatant disregard of the interests of the agreed procedure to the detriment of the minority shareholder, such breaches, notwithstanding that they are breaches of a shareholders’ agreement can be relied upon for an oppression action. In such a circumstance, the court will consider the parties’ legitimate expectations arising. from agreements and understanding of the members among themselves to determine if the breaches ‘departs from standards of fair dealing and a violation of condition of fair play’. [See: Jaya Medical Consultants Sdn Bhd v. Island & Peninsular Bhd & Ors [1994] 1 MLJ 520 and Re Kong Thai Sawmill (Miri) Sdn Bhd [1978] 2 MLJ 227] Page 34 of 37 [63] In the instant case, the 1st and 2nd Defendants have by their conduct sought to exclude the Plaintiffs completely from the management and affairs of the company. The Plaintiffs’ status as members of the company is completely denied by the 1st and 2nd Defendants notwithstanding previous acknowledgment and actions where the 1st and 2nd Defendants had clearly treated the Plaintiffs as full members.” [114] Similar to the instant case, in Gua See Sew & Ors (supra), the Learned Judicial Commissioner found a series of acts that the defendants have carried out which completely excluded the plaintiffs from the management of the company. This includes, amongst others, the following:-

surreptitiously changing the registered address of the company;

(ii) surreptitiously removing the cheque signatories thus removing the check and balance mechanism;

(iii) surreptitiously passing board resolution without the knowledge of the plaintiffs;

(iv) keeping the plaintiffs in the dark about the affairs of the company;

changing vital information, contacts and workflow of the company without the knowledge and consent of the plaintiffs. [115] This is what the Learned Judicial Commissioner had to say:- “[68] The aforesaid conduct by the 1st and 2nd Defendants are clearly a breach of the Plaintiffs’ legitimate expectation that they have the right to participate in the management of the company and in disregard of the Plaintiffs’ interests as the beneficial owners of the shares. Given that throughout the years, the 1st and 2nd Defendants have always recognised Page 35 of 37 and acknowledged the Plaintiffs’ rights and interest under the Company Policy and the Shareholders’ Agreement in relation to the affairs of G&P Structures, the conduct is oppressive and come within the section 346(1) of the CA 2016.” [116] Likewise, from the contemporaneous evidence before this Court, it is evidently clear that the Plaintiffs have always been recognised and treated as shareholders of CKM. [117] The oppressive conducts of D1 and D2 are clearly a breach of the Plaintiffs’ legitimate expectation that they have the right to participate in the management of the company and in disregard of the Plaintiffs’ interests as the beneficial owners of the Plaintiffs’ shares in CKM. The Remedy [118] Having taken all of the above into consideration, this Court made a ruling in favour of the Plaintiffs’ on 26.9.2021. [119] The terms of that ruling are as follows (stated in its original language): “DALAM MAHKAMAH TINGGI MALAYA DI JOHOR BAHRU SAMAN PEMULA NO: JA-24NCC-5-01/2019 ANTARA

LIM SWEE CHONG, ROBERT & 3 ORS …Plaintif-Plaintif Page 36 of 37

TAN TAT WEI, VICTOR & 3 ORS …Defendan-Defendan KEPUTUSAN MAHKAMAH [1]