Tee Wee Siong v Midios Sdn Bhd (WA-24NCC-253-05/2025)

TEE WEE SIONG

TEE E VA (NO. K/P: 9000615-10-5866) … PLAINTIFFS

MIDIOS SDN BHD

KEDIOS BERHAD

TAN CHIN HORNG

TAN KIM LIAN

VILOR PARTNERS BERHAD

GOH YOK MOU

CHAN BOON LEONG

WONG YIT FONG

LEE YEN CHEA

LUM SIN YI

LEONG ZHAN WEI

LAI CHIA SHING

TEA YONG WU

OOH CHIN HOOI @ WOO CHIN HOOI

EDUVER EDUCATION BERHAD (NO.SYARIKAT: 201801014368 (1276384-T) … DEFENDANTS GROUNDS OF JUDGMENT (Enclosure 3 — Application for Interlocutory Injunction)

This Court is seised of an inter parte application by way of Notice of Application (Enclosure 3) filed by the Plaintiffs, Tee Wee Siong (“P1”) and Tee E Va (“P2”), seeking an interlocutory injunction to restrain the Defendants from convening an Extraordinary General Meeting (“EGM”) of the 15th Defendant, Eduver Education Berhad, scheduled for 25 May 2025. The sole agenda of the proposed EGM is the removal of the Plaintiffs as directors of the 15th Defendant.

The application is made pursuant to Order 29 Rule 1 and Order 92 Rule 4 of the Rules of Court 2012 and the inherent jurisdiction of this Court.

The principal question for decision is whether the convening of the proposed EGM constitutes such an interference with the due administration of justice in the related suit, WA-22NCC-61- 01/2025 (“Suit 61”), as to warrant this Court overriding the long-established rule against judicial interference in the internal management of a company and the statutory rights of shareholders to convene meetings and remove directors.

Having heard learned counsel for both sides and having carefully considered the cause papers, the affidavit evidence and the authorities cited, this Court has come to the considered view that the application must be dismissed. The reasons follow.

The 15th Defendant, Eduver Education Berhad, is a public company carrying on the business of preschool education under the “Eduwis” brand which the 1st Plaintiff and his late wife developed between 1987 and 1994.

By two Share Sale Agreements dated 9 November 2018 and 16 May 2019 (“the SSAs”), the 1st Plaintiff exchanged his shares in the 15th Defendant for shares in the 2nd Defendant, Kedios Berhad. Following the implementation of the SSAs, the 2nd Defendant came to hold approximately 87.78% of the issued share capital of the 15th Defendant. The 2nd Defendant subsequently allocated approximately 13.9% of those shares to its wholly-owned subsidiary, the 1st Defendant, Midios Sdn Bhd.

In early 2025, the 1st Plaintiff instituted Suit 61 seeking, inter alia, rescission of the SSAs on the grounds of alleged fraudulent misrepresentation and conspiracy.

By notice dated 11 January 2025, the 2nd Defendant requisitioned an EGM to be held on 12 February 2025 to appoint four additional nominee directors. The Plaintiffs successfully obtained an interim injunction in Suit 61 on 7 March 2025 (“the Suit 61 Injunction”) restraining the 15th Defendant from giving effect to the resolutions proposed at that EGM. The four-director composition of the Board was thereby preserved.

By notice dated 24 April 2025, a fresh EGM was requisitioned, this time for the express purpose of removing the Plaintiffs as directors of the 15th Defendant. The notice was issued by the 1st Defendant together with the 3rd to 13th Defendants (collectively, “the Requisitionists”), being shareholders said to hold an aggregate of approximately 15.66% of the issued share capital of the 15th Defendant outside the holdings of the 2nd, 14th and 15th Defendants.

By letter dated 5 May 2025, the Plaintiffs' solicitors demanded the unconditional withdrawal of the EGM notice. The demand was rejected by letter dated 7 May 2025. The present application followed on 8 May 2025.

A. The Plaintiffs' submissions Learned counsel for the Plaintiffs submitted that the proposed EGM is a thinly-veiled attempt by the 2nd Defendant, acting through its wholly-owned subsidiary the 1st Defendant and its allied shareholders, to achieve indirectly what was prohibited by the Suit 61 Injunction — namely, the takeover of the Board of the 15th Defendant.

It was urged upon this Court that: a) the 1st Defendant's shareholding in the 15th Defendant derives directly from the very SSAs impugned in Suit 61; b) the 14th Defendant is the controlling mind of both the 1st and 2nd Defendants and is, in substance, a shadow director; c) the removal of the Plaintiffs as directors would cause the wanton destruction of the substratum of Suit 61, depriving the Plaintiffs of any meaningful remedy in the event they ultimately succeed at trial; and d) the conduct constitutes an interference with the administration of justice within the principle expounded in Monatech (M) Sdn Bhd v Jasa Keramat Sdn Bhd [2002] 4 MLJ 241.

B. The Defendants' submissions Learned counsel for the Defendants submitted, in essence, that: a) the Suit 61 Injunction, on its plain and proper construction, restrained only the appointment of new directors pursuant to the resolutions of 11 January 2025, and did not extend to the removal of existing directors; b) the Requisitionists hold a sufficient aggregate shareholding to engage the right to convene an EGM under section 310(b) of the Companies Act 2016, and the right to procure the removal of directors under section 206 of the same Act; c) those statutory rights are unfettered and are not to be defeated by the bare assertion of an aggrieved director that the meeting is mala fide; and d) it is not the function of this Court to interfere in the internal management of the 15th Defendant or to pre-empt the exercise of bona fide statutory rights at the interlocutory stage.

IV. ISSUES FOR DETERMINATION The issues which arise for determination, in this Court's view, are as follows: a) whether the Plaintiffs have established a bona fide serious issue to be tried; b) whether the Requisitionists are entitled, on the present material, to exercise their statutory rights under sections 206 and 310 of the Companies Act 2016 free of judicial restraint; c) whether the convening of the proposed EGM constitutes such an interference with the due administration of justice in Suit 61 as to engage the principle in Monatech; and d) where the balance of convenience lies and whether damages would be an adequate remedy.

A. The relevant statutory provisions Section 206 of the Companies Act 2016, which governs the removal of directors, provides: “(1) Subject to the constitution, a director may be removed before the expiration of the director's period of office as follows: (a) in the case of a private company, by ordinary resolution; or (b) in the case of a public company, in the manner provided in this section.

Section 310 of the Companies Act 2016 provides: “A meeting of members may be convened by— (a) the Board; or (b) any member holding at least ten per centum of the issued share capital of a company excluding any paid up capital held as treasury shares or a lower percentage as may be specified in the constitution.”

Order 29 Rule 1(1) of the Rules of Court 2012 provides: “An application for the grant of an injunction may be made by any party to a cause or matter before or after the trial of the cause or matter, whether or not a claim for the injunction was included in that party's writ, originating summons, counterclaim or third party notice, as the case may be.”

Order 92 Rule 4 provides: “For the removal of doubts it is hereby declared that nothing in these Rules shall be deemed to limit or affect the inherent powers of the Court to make any order as may be necessary to prevent injustice or to prevent an abuse of the process of the Court.”

B. The relevant case law The governing principles for the grant of an interlocutory injunction are well-settled. In Keet Gerald Francis Noel John v Mohd Noor @ Harun bin Abdullah & Ors [1995] 1 MLJ 193, the Court of Appeal, drawing upon the principles laid down by the House of Lords in American Cyanamid Co v Ethicon Ltd [1975] AC 396, held that the court must consider, in sequence: first, whether there is a bona fide serious question to be tried; secondly, where the balance of convenience lies; and thirdly, whether damages would be an adequate remedy. The applicant bears the burden of establishing each limb on a balance of probabilities, the standard articulated in Miller v Minister of Pensions [1947] 2 All ER 372.

The general rule against judicial interference in the internal management of a company is among the oldest principles of company law. In Foss v Harbottle (1843) 2 Hare 461, it was laid down that the court will not interfere with the internal affairs of a company in matters which the company itself, by its members in general meeting, is competent to regulate. The corollary is that the statutory rights of shareholders to convene meetings and to vote upon resolutions placed before them are not lightly to be restrained.

The qualification to that general rule, upon which the Plaintiffs rely, is the principle expounded by the Federal Court in Monatech

(M) Sdn Bhd v Jasa Keramat Sdn Bhd [2002] 4 MLJ 241. There it was held that conduct intended to impede a fair trial, or to cause the wanton destruction of the subject matter of an action, may be restrained as an interference with the due administration of justice, even where the precise act complained of is not expressly prohibited by an existing injunction. VI. ANALYSIS AND FINDINGS

A. Burden and standard of proof The burden of satisfying each limb of the Keet Gerald test rests squarely on the Plaintiffs as the applicants. The standard of proof at this interlocutory stage is the balance of probabilities.

B. Issue (a) — Serious issue to be tried This Court accepts that the Plaintiffs have raised a bona fide serious issue. The pleaded case in Suit 61 — that the SSAs were procured by fraudulent misrepresentation and conspiracy — is plainly a triable matter. The further question whether the proposed EGM was convened in bad faith to defeat that suit is also, in principle, capable of supporting a serious issue.

To this limited extent, the first limb of the Keet Gerald test is satisfied. The decisive questions, however, lie in the limbs which follow.

C. Issue (b) — The statutory rights of the Requisitionists The Requisitionists hold an aggregate of approximately 15.66% of the issued share capital of the 15th Defendant, outside the holdings of the 2nd and 14th Defendants. That shareholding, on the face of the cause papers, is sufficient to engage the right conferred by section 310(b) of the Companies Act 2016 to convene an EGM. The further right to procure the removal of directors by ordinary resolution is conferred by section 206. These rights are statutory and substantive.

The Plaintiffs' submission that the Requisitionists are mere proxies of the 2nd and 14th Defendants amounts, on the affidavit evidence presently before this Court, to an unsubstantiated allegation. To pierce the corporate veil and to disregard the separate legal personalities of the 1st and 3rd to 13th Defendants requires more than the bare assertion of agency or shadow directorship. It requires evidence — and at this interlocutory stage, the Plaintiffs have produced none of substance.

This Court is fortified in this conclusion by the well-recognised principle that the corporate veil is not to be lifted save upon clear and cogent material. To do so on contested affidavits at the interlocutory stage, where the deponents stand in direct conflict, would be to determine the very issues which await trial.

This Court therefore finds that the Requisitionists are, prima facie, entitled to exercise their statutory rights under sections 206 and 310 of the Companies Act 2016. D. Issue (c) — Construction of the Suit 61 Injunction and the

Monatech principle The Suit 61 Injunction of 7 March 2025 was, in its terms, narrow. It restrained the 15th Defendant from giving effect to the resolutions proposed at the EGM of 12 February 2025, the substance of which was the appointment of four new nominee directors. The order said nothing of the removal of directors, much less did it impose any general embargo on the convening of future EGMs.

It is settled that injunctive orders, being penal in character to the extent that breach may give rise to contempt, are to be strictly construed. This Court is not at liberty to enlarge the scope of the Suit 61 Injunction by judicial interpretation so as to embrace acts not expressly prohibited by it.

As to the Monatech principle, this Court is bound by it but must apply it with discrimination. The principle is engaged where the conduct complained of would cause the wanton destruction of the very subject matter of the action, such that any judgment ultimately given would be rendered nugatory or hollow. That, in this Court's view, is not the present case.

The subject matter of Suit 61 is the validity of the SSAs and the consequential rescission and damages reliefs prayed for. Those reliefs are not destroyed by the removal of the Plaintiffs as directors. If the Plaintiffs succeed at trial, the SSAs will be set aside and the shareholdings reordered. The Plaintiffs' status as directors, while doubtless of importance to them, is not the substratum of Suit 61 in the sense contemplated by Monatech. It is, at most, a consequence which flows from corporate control. The corporate machinery of the 15th Defendant itself remains intact and capable of being righted upon the determination of Suit 61.

This Court therefore declines to apply “Monatech” so as to enlarge the Suit 61 Injunction or to restrain, on the present material, the lawful exercise of statutory rights. There is no cogent reason warranting judicial interference in the internal management of the 15th Defendant, and in particular none which would justify superseding the power of shareholders to call a general meeting and to put resolutions to the vote. Any such intervention would, in any event, be premature, for there is no guarantee that the proposed resolutions will be carried. The convening of a general meeting is a normal incident of corporate life and does not, of itself, intrude upon any judicial process. In those circumstances the Mona tech principle, which is concerned with preventing the destruction of the substratum of pending litigation, has no proper application.

By way of observation only and not forming part of this Court's ratio: should subsequent evidence emerge that the Requisitionists are, in truth, acting in concert with the 2nd and 14th Defendants for a collateral purpose and in deliberate flouting of the spirit of the Suit 61 Injunction, the Plaintiffs would not be without recourse. The doors of this Court remain open to applications for committal, for fresh injunctive relief upon proper material, or for any consequential orders that may be appropriate. This observation, however, is no part of the present decision.

E. Issue (d) — Balance of convenience and adequacy of damages On the balance of convenience, this Court is satisfied that the scales tilt decisively in favour of the Defendants. To grant the injunction sought would be to suspend, at least until trial, the exercise of clear statutory rights by shareholders who are, on the material before this Court, the lawful holders of the relevant shares. The injury to those rights is concrete and immediate.

The injury feared by the Plaintiffs, by contrast, is contingent and remediable. Should the Plaintiffs succeed in Suit 61, the rescission of the SSAs and the consequential reliefs will undo the changes in shareholding upon which the Defendants' voting rights presently rest. Any resolutions passed at the EGM of 25 May 2025 by virtue of those shareholdings would be vulnerable to consequential challenge in Suit 61 itself. Damages, if proved, would be an adequate remedy for any loss occasioned to the Plaintiffs by an interim removal from office.

The Plaintiffs' contention that an injunction is the only effective remedy is, in this Court's respectful view, overstated.

The remaining submissions For completeness, this Court has considered the following further submissions advanced by learned counsel for the Plaintiffs and rejects them, briefly, for the reasons given: a) That the EGM is per se an abuse of process — rejected. The exercise of a statutory right is not, without more, an abuse of process. b) That this Court ought to presume an improper motive from the timing of the EGM notice — rejected. Bare timing, without more, does not displace the presumption of regularity attending the exercise of statutory rights. c) That the doctrine of “clean hands” disentitles the Defendants from invoking statutory rights — rejected. No equitable application is presently before this Court for relief; the statutory rights stand independently of equity. d) That the convening of the EGM is itself a contempt of the Suit 61 Injunction — rejected. Contempt requires a clear breach of an unambiguous order, which is not made out on the strict construction of the Suit 61 Injunction set out at paragraphs 29 to 30 above. Any application for committal must be brought in Suit 61 and on its own materials.

VII. CONCLUSION AND ORDERS For the reasons set out above, this Court finds that: a) the Plaintiffs have not satisfied the threshold for the grant of an interlocutory injunction under the Keet Gerald test, save as to the limited matter of a serious issue to be tried; b) the Suit 61 Injunction does not, on its proper construction, prohibit the removal of the Plaintiffs as directors; c) the Requisitionists possess statutory rights under sections 206 and 310 of the Companies Act 2016 which this Court will not pre-emptively restrain on the present material; and d) the balance of convenience lies with the Defendants and damages are an adequate remedy for the Plaintiffs.

Accordingly, this Court orders:

(i) the Plaintiffs' application in Enclosure 3 is dismissed;

VIII. APPRECIATION This Court records its appreciation to learned counsel on both sides for the industry and clarity with which their submissions were prepared and presented. Dated 05hb May 2026 (MOHAMAD REDZUAN BIN IDRUS) JUDICIAL COMMISSIONER KUALA LUMPUR HIGH COURT NCC 5 WILAYAH PERSEKUTUAN KUALA LUMPUR APPEARANCES For the Plaintiffs: Mohd Rizal Bahari bin Md. Noor (Bahari & Bahari Ampang) For the Defendants D1-D7, D10-D15: Wong Kar Chun, Edmond Teh & Wong Yi Ying For the Defendant D8 & D9 (Suit61): Rebekah Nhanam (Suat Lim & Co. Puchong, Selangor)

American Cyanamid Co v Ethicon Ltd [1975] AC 396 2. Foss v Harbottle (1843) 2 Hare 461 3. Keet Gerald Francis Noel John v Mohd Noor @ Harun bin Abdullah & Ors [1995] 1 MLJ 193 4. Miller v Minister of Pensions [1947] 2 All ER 372 5. Monatech (M) Sdn Bhd v Jasa Keramat Sdn Bhd [2002] 4 MLJ 241 LEGISLATION REFERRED TO IN THIS JUDGMENT:  Companies Act 2016, sections 206 and 310; Rules of Court 2012, Order 29 Rule 1 and Order 92 Rule 4.