Ahmad Badurol Hisham Bin Mukhatar v Swart Holdings Sdn Bhd (WA-22NCC-171-03/2026)

SWART HOLDINGS SDN BHD (NO. SYARIKAT: 202301050438 [1544352-X])

HMBE LEGACY SDN BHD (NO. SYARIKAT: 201401013322 [1089406-X])

JOHARI BIN BAHARUDDIN (seorang rakan kongsi yang berniaga di bawah nama dan gaya Tetuan Yaacob Atan & Associates) …DEFENDAN-DEFENDAN GROUNDS OF JUDGMENT (Enclosure 3)

The Plaintiff is a minority shareholder in the 2nd Defendant (“Company”). He filed a writ action to seek the return of shares in the Company that he had transferred to the 1st Defendant under a Share Sale Agreement dated 26-3-2025 (“SSA”), claiming that a condition precedent of the SSA was not met.

Fearing that he would be marginalized in the management of the Company, the Plaintiff filed Enclosure 3 on an urgent basis together with the writ on 6-3-2026, to restrain the conduct of an Extraordinary General Meeting of the Company scheduled for 16-3-2026 (“EGM”). This Court heard and dismissed Enclosure 3 for the following reasons. Background facts

The Company was incorporated on 16-4-2014. It is in the business of importing, packaging and selling sugar. The Plaintiff was the majority shareholder of the Company. He was and remains a director and Chief Executive Officer (“CEO”) of the Company. The only other director of the Company is Dazma Shah bin Daut @ Daud, who was appointed on 19-5-2025 as a nominee of the 1st Defendant.

Before the SSA, the Plaintiff had sold and transferred 75,135 of his shares of the Company to the 1st Defendant for RM150,000.00, representing 15% of the issued share capital of the Company. This is documented in another Share Sale Agreement dated 25-3-2025, which has been completed.

Under the SSA, the 1st Defendant acquired a further 180,324 shares in the Company from the Plaintiff for RM850,000.00, representing a further 36% of the issued share capital of the Company (“Sale Shares”). As a result, the shareholding structure of the Company is now as follows: Shareholder Share percentage Plaintiff 44.9% 1st Defendant 51% Mohd Zamri bin Abdullah 4.1%

The SSA was conditional upon the fulfilment of the following conditions precedent (“CP”) within 60 days from the date of the SSA as set out under Clause 4.1: “(a) [the 1st Defendant] secures for the Company a loan or investment of not less than RM5,000,000.00 and up to a maximum of RM10,000,000.00 (hereinafter be referred to as the “Funding”);

the Funding secured by [the 1st Defendant] shall be on terms and conditions that are acceptable to the Company, acting reasonably. Such terms and conditions shall include, but not be limited to, interest rates, repayment schedules, and any covenants or obligations imposed on the Company;

any and all security required for the Funding shall be provided solely by [the 1st Defendant]. The Company shall not be required to provide any security, guarantees, or collateral for the loan or investment, and [the 1st Defendant] shall indemnify and hold the Company harmless from any liabilities, claims, or obligations arising from such loan or investment.”

Clause 6 of the SSA provides for payment of the consideration for the Sale Shares upon fulfilment of the CPs, and according to clause 7 of the SSA: “7.1 In the event [the 1st Defendant] fails, refuses or neglects to fulfil the Conditions Precedent for any reason whatsoever within sixty (60) days from the date of this Agreement or such other date as may be agreed in writing between the Parties, [the Plaintiff] shall be entitled to terminate this Agreement by a written notice to [the 1st Defendant] whereupon [the 1st Defendant] shall within fourteen (14) days from the date of receipt of the written notice, retransfer the Additional Shares to [the Plaintiff].” As security for the retransfer, the 3rd Defendant is holding the signed share transfer and stamp duty forms for the retransfer of the Sale Shares back to the Plaintiff as stakeholders.

On 27-2-2026, the Plaintiff gave notice to the 1st Defendant that it was terminating the SSA pursuant to Clause 7.1 of the SSA. Analysis and findings

The Plaintiff applied for the interlocutory injunction in Enclosure 3 to stop the EGM pending trial, which will determine the 1st Defendant’s entitlement to retain the Sale Shares. In moving the Court, the Plaintiff must satisfy the usual requirements for an interlocutory injunction to be granted, namely: (a) there are bona fide serious issues to be tried

damages are inadequate as a remedy, and (c) the balance of convenience favours the injunction (Keet Gerald Francis Noel John v Mohd Noor bin Abdullah & Ors [1995] 1 MLJ 193). Serious issues to be tried

The 1st Defendant argued that in fulfilment of the CP, it had procured RM859,000.00 in investments, and RM17,240,000.00 in term financing and revolving credit facilities from SME Bank for working capital, secured against, inter alia, a corporate guarantee of the 1st Defendant, personal guarantees of the directors and a deed of assignment by the Company.

According to the Plaintiff, the CP was not met within 60 days (i.e. by May 2025) nor did the funding satisfy the express requirements of the CP as both the Company and the Plaintiff both provided security for the SME Bank facilities. On the other hand, the 1st Defendant contended that the Plaintiff is estopped from taking that stance as he had received part consideration for the Sale Shares, registered the transfer and acquiesced to the available funding.

Considering the underlying dispute for trial as set out above, the 1st Defendant cited Tetap Tiara Sdn Bhd v Pengurusan Perbadanan Jaya One & Ors and other appeals [2024] 2 MLJ 853 (“Tetap Tiara”) and argued that the cause of action in the Statement of Claim bore no connection to the matters to be discussed at the EGM, which concerned issues relating to corporate governance, financial standing and direction of the Company.

In Tetap Tiara, the interlocutory injunctions were granted to restrain the management corporation from convening its Annual General Meeting/Extraordinary General Meeting. This was reversed by the Court of Appeal on several grounds, one of which is the observation that the convening of meetings was not pleaded as a cause of action and disconnected from the underlying dispute. The plaintiffs could fully pursue their claims regardless of whether the meetings took place.

In this case, this Court found that the EGM was pleaded in the Statement of Claim and was sufficiently connected with the final relief sought at trial, in that the 1st Defendant would be exercising its majority vote at the EGM even though its entitlement to that voting power is a central issue for determination at trial. Considering this, the Court was satisfied that there is a bona fide serious issue to be tried. Adequacy of damages

The Plaintiff sought the interlocutory injunction in Enclosure 3 to restrain the 2nd Defendant from convening an EGM on 16-3-2026 as stated in the Notice of EGM dated 24-2-2026 (“Notice of EGM”) or any other meeting on any other date until the Court finally determines this action. Specifically, the Notice of EGM had the following agenda:

Appointment of an additional director;

Board authority to review banking mandate;

Corporate governance enhancement; and

Any other business.

The 1st Defendant argued that the EGM was necessitated by concerns over the Plaintiff’s control of bank accounts due to a lack of transparency, accounting irregularities, and the discovery of Company bank accounts under the control of third parties. Both the Plaintiff and 1st Defendant accused each other of obstructing payments to the Company’s creditors, thus exposing it to risk of default.

In response to queries from the Court regarding the irreparable harm that would be caused if the EGM proceeded based on the agenda items in the notice, counsel for the Plaintiff was unable to clearly articulate the factual basis necessary to satisfy this element. As far as this Court could discern, the Plaintiff feared being removed from his position as a director and CEO in the Company and alluded to potential risks to the Company.

Based on the business proposed to be transacted at the meeting, as reflected in the agenda set out in the Notice of EGM, there was no indication that the 1st Defendant intended to pass resolutions that would cause irreparable harm to either the Plaintiff or the Company. The Notice of EGM made no reference to any proposal to remove the Plaintiff from office. In any event, even if the Plaintiff were removed, the resulting loss would likely be capable of adequate compensation by way of damages.

The 1st Defendant and its nominee director are liable respectively as corporate and personal guarantors for the facilities from SME Bank and as shareholders, majority or otherwise, the 1st Defendant is clearly invested in the success of the Company, just as the Plaintiff is.

Ultimately, this Court found insufficient evidence to demonstrate risk of irreparable harm to warrant an interlocutory injunction restraining the EGM based on the agenda in the Notice of EGM. To alleviate any uncertainty from the inclusion of the item “any other business” in the Notice of EGM, this Court noted that there is always liberty for the Plaintiff to apply depending on the resolutions passed at such EGM. Balance of convenience

The Plaintiff similarly asserted that the balance of convenience justified the grant of the interlocutory injunction without stating why. In balancing the competing interests, this Court considered it to be commercially sensible and in the interest of both parties that any deadlock on the Board of Directors be avoided, that banking mandates be reviewed to enhance accountability, and that corporate governance be strengthened.

Enclosure 3 was accordingly dismissed with costs in the cause. Bertarikh: 04 Jun 2026 ELAINE YAP CHIN GAIK PESURUHJAYA KEHAKIMAN MAHKAMAH TINGGI MALAYA KUALA LUMPUR Peguam Untuk Plaintif: Nurzali Bin Mohd Taib Tetuan Zahir Khailani Untuk Defendan Pertama: Nur Amalina Binti Haris (Nurul Anis Syazana Binti Nor Aziz Hashim bersamanya) Tetuan Edlin Ghazaly &