CJ POLYMERS SDN BHD v Kerk Han Meng [Notice Of Discontinuance At Encl. 27] (W-02(IM)(NCC)-1631-09/2024)

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… [In the matter of Kuala Lumpur High Court (Commercial Division) Originating Summon No. WA-24NCC-138-03/2020 In the matter of CJ Polymers Sdn Bhd And In the matter of Section 346 Company’s Act, 2016 And In the matter of Order 7, 11 and 88 of Rules of Court 2012 Between Sim Chin Hu …

Kerk Han Meng

Lee Yu Meng

Kua Chin Wee

CJ Polymers Sdn Bhd … Defendants] (Company Registration No. 200101003712) CONSOLIDATED AND HEARD TOGETHER PURSUANT TO COURT OF APPEAL ORDER DATED 31.01.2023

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(COMPANY NO: 539468-V) [In the matter of Kuala Lumpur High Court (Commercial Division) Originating Summon No. WA-24NCC-138-03/2020 In the matter of CJ Polymers Sdn Bhd And In the matter of Section 346 Company’s Act, 2016 And In the matter of Order 7, 11 and 88 of Rules of Court 2012 Between Sim Chin Hu …

Kerk Han Meng

Lee Yu Meng

Kua Chin Wee

CJ Polymers Sdn Bhd … Defendants] (Company Registration No. 200101003712) HEARD TOGETHER CIVIL APPEAL NO: W-02(IM)(NCC)-1631-09/2024 … APPELLANT [COMPANY REGISTRATION NO. 200101003712 (539468-V)]

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… [In the matter of Kuala Lumpur High Court (Commercial Division) Originating Summon No. WA-24NCC-138-03/2020 In the matter of CJ Polymers Sdn Bhd And In the matter of Section 346 Company’s Act, 2016 And In the matter of Order 7, 11 and 88 of Rules of Court 2012 Between Sim Chin Hu …

Kerk Han Meng

Lee Yu Meng

Kua Chin Wee

CJ Polymers Sdn Bhd … Defendants] (Company Registration No. 200101003712) CORAM: RAVINTHRAN PARAMAGURU, JCA MOHD. NAZLAN BIN MOHD. GHAZALI, JCA CHOO KAH SING, JCA JUDGMENT Introduction [1] There are three appeals before us. All the appeals arise from a minority oppression action filed by Sim Chu Hu (Sim). The main issue in the High Court was whether his removal from the management of the company that he co-founded constituted oppression notwithstanding the fact that there was a pending claim by the company against him for breach of fiduciary duty. The second issue was whether the quasi partnership arrangement between Sim and his co-founder (Kerk Han Meng) terminated upon the admission of new shareholders. Sim was successful in the court below. [2] In Appeal 2146, CJ Polymers Sdn Bhd (CJ Polymer), the company that was co-founded by Sim, is the appellant. It was the fourth defendant in the High Court. An order was made for the company to return some moveable properties to Sim. The prayer for CJ Polymer to buy out Sim’s shares was the alternative prayer in the oppression action. CJ Polymer was also ordered to buyout the shares of Sim by the High Court because prior to the hearing, it had made the buyout offer subject to set-off from losses suffered by it due to the alleged misconduct of Sim. The separate suit of CJ Polymer (Civil Suit WA-22NCC-298/072020) against Sim for alleged breach of fiduciary duty and misconduct was then pending in another court. CJ Polymer is appealing against the order to buyout the shares of Sim. [3] In Appeal 2148, Kerk Han Meng (Kerk) and Lee Yu Meng (Lee) are the appellants. Kerk holds 48.5 per cent of the shares whereas Lee holds 3 per cent of the shares in CJ Polymer. They were the first and second defendants in the High Court. But on 7 May 2024, Kerk withdrew himself from this appeal insofar as it related to him. Lee continued with her appeal against the decision of the High Court. [4] In Appeal 1631, the appellant is CJ Polymer. The appeal is against the dismissal of the application of CJ Polymer on 13 September 2024 to make representations and conduct cross-examination in respect of the Deloitte Final Report. The Deloitte Report was prepared pursuant to the orders of the High Court dated 9th November 2022, 12th January 2023 and 8th November 2023 which were to facilitate the buyout order. [5] The third defendant in the High Court was Eric Kua Chin Wee (Eric Kua). He is not a director of CJ Polymer. But a finding of fact was made by the High Court that he purchased one-third stake in the company from Sim and Kerk. He discontinued his own appeal (Appeal 2147) on 3 May 2024 and his counsel did not file any submissions. Nonetheless, he remains a respondent in the other appeals. [6] Sim has filed a notice of cross appeal in Appeals 2146 and 2148 to vary the reliefs granted to him particularly in respect of the 1.5 per cent shares of CJ Polymer he had transferred to Lee Yu Meng (Lee). He is appealing for the 1.5 per cent shares to be included in his stake for the purpose of the buyout order. [7]

A declaration that the affairs of CJ Polymer were conducted in a manner oppressive and or in disregard of Sim’s interest or otherwise prejudicial to him;

Sim do sell his stake to CJ Polymer or other defendants with the fair value to be determined by an independent valuer without minority discount;

Sim to be removed as signatory in the bank accounts of CJ

Sim be removed as guarantor of CJ Polymer for loans or trade facilities;

A declaration the benefits granted to Sim referred to letters dated 14 November 2019, 11 December 2019 and 24 December 2019 cannot be unilaterally withdrawn;

The RM3.5 million advanced by Sim to CJ Polymer be repaid with interests at 5 per cent per annum;

Arrears of director’s fees of RM6,000 per month between December 2019 and June 2020 be paid to Sim with interest of 5 per cent per annum;

Kerk and Lee do cause CJ Polymer to pay RM6,749,334 to Sim with interest of 5 per cent per annum; Issues in the appeals [32] Kerk, the co-founder of CJ Polymer, and Eric Kua, the purchaser of one-third stake in it are no longer prosecuting their appeals against the decision of the High Court. Only Lee, who holds 3 per cent stake in CJ Polymer and the company itself are challenging the decision of the High Court. The other appeals that remain are the cross appeals of Sim with respect to the 1.5 per cent of his shareholding that was acquired by Lee. The main issues argued before us in remaining appeals are as follows:

Whether a quasi-partnership existed between Sim and Kerk;

Whether it ceased to exist when Lee became 3 per cent shareholder or when Eric Kua bought one-third stake in it;

Whether removal of Sim from management was oppressive;

Whether alleged misconduct of Sim relevant;

The claim of Sim for the sum of RM6,749,334.00 that represented his share of the payment by Eric Kua for his one stake in CJ Polymer;

Whether order for CJ Polymer to pay RM3.5 million to Sim is correct;

Whether buyout order was erroneous;

Whether cross appeal should be a subject of full appeal;

Whether any merit in cross appeal of Sim;

Right of CJ Polymer to make representation on the Deloitte Report and conduct cross examination on it. Quasi-partnership [33] Sim pleaded that CJ Polymer is a quasi-partnership between Kerk and him. The High Court made a finding of fact that such a quasi-partnership existed after considering the well-known cases of Ebrahimi v Westbourne Galleries Ltd [1973] AC 360 and Re a Company [1987] BCLC 94. We are of the view, that the learned High Court Judge correctly made this finding based on the overwhelming evidence that Sim and Kerk had, from the outset, decided to operate CJ Polymer on basis of personal mutual trust and confidence between them. They conceived CJ Polymer as an equal partnership between them, operating outside the framework of the formal rules that govern relationships between shareholders in a company (see. The distinction between their roles as shareholder and directors was also blurred, as they made decisions qua shareholders. Formal board meetings were not held, and decisions were made informally. [34] We have summarized the reasons of the High Court earlier and now briefly revisit them. It is indisputable that Sim and Kerk were long-time colleagues at another company and jointly conceived the idea of incorporating CJ Polymer. At the early stages, neither Kerk nor Sim formally became directors or took part in the management of CJ Polymer, as they were still working with their former employer. Such was the level of trust between them that they operated CJ Polymer through their respective wives. [35] Although Kerk was the managing director, there was no letter of appointment or board resolution formalizing his role. Similarly, while a letter was issued regarding Sim’s appointment as general manager, there was no board resolution authorizing it. The learned High Court Judge found that Kerk had admitted both of them had rooms at CJ Polymer's premises from the beginning, even while still employed at Hualon Corporation. Their authority in CJ Polymer stemmed from their equal ownership, much like an unincorporated partnership. [36] With regard to their shareholding in CJ Polymer, they did not consider it necessary to enter into a formal shareholders' agreement. When they later incorporated other companies, namely, CJ Polymers PLC in Labuan, Artimis International Ltd in Hong Kong, and Newroads Management Ltd, they again held equal shareholdings and did not draw up shareholder agreements. They also never held physical board meetings to make decisions. [37] When the company prospered, they never declared dividends. Kerk confirmed this fact under cross-examination. Even when the profits of the company grew from RM190,000.00 in 2001 to RM5.67 million in 2020, no dividends were declared. As equal partners in complete control of the company, they enjoyed benefits in the manner described by the High Court, i.e. through salaries to themselves and various perks extended to themselves and their family members, including fictitious employment of the latter. Kerk agreed during cross-examination that these perks increased correspondingly with the profits of the company. The learned High Court Judge also noted that Kerk agreed that in 2014, the total salaries paid to him and his wife nearly equalled those paid to Sim and his ex-wife. [38] The company vehicles allocated to Kerk and Sim were roughly equal in number, and there was no credible denial by Kerk regarding this evidence. The learned High Court Judge noted that Kerk, during cross-examination, stated he had never insisted on altering the shareholding structure from the original 50:50 arrangement until 2019. Accordingly, the High Court had ample evidence to conclude that Kerk and Sim had an understanding or arrangement whereby they would not benefit from the company’s profits in the conventional manner, i.e., through dividends but instead through salaries and perks. All the above evidence supports the inference that Kerk and Sim operated CJ Polymer based on mutual trust and confidence reposed in each other, outside the formal rules that typically govern relationships between shareholders. [39] As counsel for Sim submitted, Kerk is no longer pursuing his appeal against the decision of the High Court. The existence of a quasi-partnership must necessarily be within the personal knowledge of the parties involved, namely, Sim and Kerk. It cannot be within the knowledge of Lee who entered the picture as a 3 per cent shareholder, purportedly to look after the interest of Eric Kua when tensions arose between the original partners. Thus, there is abundant evidence of the existence of quasi-partnership with respect to the affairs of CJ Polymer from the moment of incorporation up to the point of dispute. Therefore, the conclusion of the High Court that Sim had a legitimate expectation to participate in the management of CJ Polymer and would continue to do so as long as he remained a shareholder is unassailable. Whether quasi-partnership ceased up admission of new shareholders? [40] In the High Court, counsel for Kerk argued that Sim admitted that both he and Kerk agreed to divest one-third shareholding in CJ Polymer to Eric Kua and that partial payment had been made. Eric Kua originally worked in Hualon Corporation where he became acquainted with Kerk and Sim. He later joined a subsidiary of Petronas Corporation. As an employee of Petronas, he had dealings with CJ Polymer. He also aspired to become a businessman. It was argued that the divestment of one-third equity to Eric Kua brought an end to the quasi-partnership, assuming such a partnership existed in the first place. [41] The learned High Court Judge referred to the case of Ng Yong Long v Qua Hock Leong & Ors [2006] 5 MLJ 768 and observed that the quasi-partnership character of a company may change due to intervening events or even by voluntary surrender of the status by a “quasi-partner” after incorporation. His Lordship also referred to his own judgment in Chuah Seong Keat & Ors v Din Tan Yong Chia & Ors [2022] MLJU 455, where he said that shareholders are at liberty to change any arrangement with respect to the quasi-partnership nature of a company. However, we agree with the learned High Court Judge that the facts of the above-mentioned case can be easily distinguished. In that case, the Share Sale Agreement, signed by all parties following the introduction of a new investor, expressly altered the previous understanding. Clause 10 of the Share Sale Agreement specifically stipulated that any prior agreements, letters, or correspondence, whether oral or written, expressed or implied, were superseded. [42] As we said earlier the High Court found that quasi-partnership character of CJ Polymer did not change for the following reason. His Lordship found on the evidence that it was agreed that Eric Kua would acquire one-third equity in CJ Polymer by end of 2017 or early 2018. However, there was no evidence to contradict Sim’s assertion that the quasi-partnership arrangement between him and Kerk would change. His Lordship found that the burden of proof on this point was on the defendants. His Lordship also considered the evidence that there was an understanding that Eric Kua would not participate in the management of the company as this would bring him into conflict with his duties and responsibilities as an employee of Petronas. In his capacity as an employee of Petronas, Eric Kua continued to deal with the fertilizer side of the business of CJ Polymer. [43] We find no error in the reasoning of the High Court on this point. It is clear that Eric Kua’s investment in CJ Polymer by offering to purchase one-third stake could not have ended the quasi-partnership in 2017 or 2018 as Kerk and Sim continued to operate CJ Polymer as before. The shares intended for Eric Kua were not even transferred to him. Eric Kua continued to work with Petronas with the understanding he would not participate the management of CJ Polymer until he ceased working with his current employer. Therefore, as the High Court found, his participation as a shareholder was more of an investor. In the premises, the admission of Eric Kua as a shareholder could not have ended the quasi-partnership as of 2019 when the dispute in question arose. [44] It was pointed out to us on behalf of CJ Polymer that the learned High Court Judge only considered the admission of Eric Kua as a shareholder but did not consider the 3 per cent shares (1.5 per cent each from Kerk and Sim) that were transferred to Lee. The argument is that it had the effect of ending the quasi-partnership. Although, the learned High Court Judge did not directly mention the acquisition of 3 per cent shares by Lee, in our view, there is no error in His Lordship’s finding of fact that the quasi-partnership survived. It must be recalled that the 3 per cent equity given to Lee is connected to the one-third equity acquired by Eric Kua. It was Kerk and Eric Kua who represented to Sim after the so-called Savino Transactions affair that Eric Kua would want somebody to represent him on the board of directors. Lee herself wrote a letter to the effect that she was a trustee of Eric Kua. The learned High Court Judge noted that the entry of Eric Kua as an investor with one-third equity did not terminate the quasi-partnership understanding between Kerk and Sim for reasons discussed earlier. It stands to reason that a transfer of only 3 per cent shares to Lee who acted as trustee for Eric Kua could not have terminated quasi-partnership in question. Furthermore, as noted by the learned High Court Judge, there was no evidence to contradict the assertion of Sim that he continued to participate in the management of CJ Polymer as before until he was removed at the end of 2019. Oppression [45] The oppression action of Sim is based on section 346 of the Companies Act 2016. In evaluating the case of Sim, the learned High Court Judge was guided by the following eminent authorities that considered the predecessor section in the repealed Companies Act 1965, namely section

In summary, section 346 states that a shareholder may apply for relief under it on the ground that the affairs of the company are being conducted or the powers of the directors are exercised in a manner oppressive or in disregard of his interest or some act of the company unfairly discriminates against him. [46] In the seminal case of Re Kong Thai Sawmill (Miri) Sdn Bhd & Ors v Ling Beng Sung [1978] 2 MLJ 227, the Privy Council said that before a case of oppression is made out, there must be visible departure from the standards of fair dealing. The “disregard” in the section involves something more than a failure to take into account of the minority’s interest. There must be an awareness of that interest and an evident decision to override it or ignore the proper company procedure. In the case of Pan-Pacific Construction Holdings Sdn Bhd v Nigu-Kee Cost (M) Bhd & Anor [2010] 6 CLJ 721, the Federal Court emphasised that the basic theme of section 181 is “unfairness” in that “disregard of interests” is to be understood to mean “unfair disregard” while “oppression” denotes an “unfairly prejudicial conduct” which means conduct “departing from standards of fair play and a violation of conditions of fair play”. [47] As we said earlier, in our view, the learned High Court Judge correctly found on the evidence that CJ Polymer was run as a quasi-partnership between Kerk and Sim from the outset and the said partnership survived the admission of Lee as a 3 per cent shareholder and the purchase of one-third equity by Eric Kua. However, in 2019, Sim was completely excluded from management of CJ Polymer in breach of his legitimate expectation to do so as a quasi-partner for almost 20 years. He was voted out as a director as Kerk and Lee together held 51.5 per cent of the shares. His employment as general manager was also terminated. Therefore, he did not receive director fees or salary as general manager. The evidence before High Court was that it was the practice of the company to declare dividends as Kerk and Sim as shareholders enjoyed the profits of the company through various perks including director fees and salaries for themselves and their family members. [48] Lee gave evidence that the salary paid to Kerk and Sim were in their capacity as employees of the company. However, we are not minded to disturb the finding of fact by the High Court to the contrary. Both Kerk and Sim received hefty perks including high salaries for themselves and their wives which were almost equal. The inference that such perks were benefits qua shareholders is irresistible. [49] Lee also told the court that bonus shares were allotted as distribution of profits and that the learned High Court Judge erred in holding that there was no distribution of profits because there was no issuance of dividends. However, as pointed out by counsel for Sim, this point was not raised in the High Court and should not be permitted to be argued now. Anyway, we should think it is an insignificant point. The high salaries and various perks including holidays abroad and five or six luxuries cars to Kerk and Sim and their families when CJ Polymer became increasingly profitable only means that there was an understanding between the partners that in the main, they would enjoy benefits as shareholder in this manner and not through payment of dividends. [50] However, Sim was excluded from management and the associated perks suddenly in 2019 and his shares remained locked in the company without any possibility of deriving any benefits from them. In fact, he was ordered to return the luxury vehicles allotted to him as a founding shareholder with the threat police enforcement action being visited upon him. There was no offer to buy out his shares by Kerk or Eric Kua. By being locked in as shareholder without any possibility of deriving benefits by way of dividends or perks as part of management or being member of the board, Sim had suffered loss as a shareholder which Kerk or Lee did not. Thus, Sim was unfairly singled out to suffer this prejudice. [51] CJ Polymer only made a belated buyout offer after Sim filed the action, which the High Court found to be unreasonable. Furthermore, Sim was pressured to relinquish 1.5 percent of his shares to Lee under the pretext that Eric Kua needed someone on the board of directors as a “check and balance” to protect his interests following the Savino Transactions affair. The High Court found that one does not need to be a shareholder to become a director, and that the true purpose of this ruse was to force Sim to give up the 1.5 percent shareholding in order to break the shareholder deadlock and remove him from management. [52] For the above reasons, we are of the view that the High Court correctly found that oppression within the meaning of section 346 had been proved by Sim. Alleged Misconduct of Sim [53] Kerk and CJ Polymer alleged misconduct on the part of Sim in managing the affairs of the company as part of their defence. We have referred to the details of the alleged misconduct of Sim and the alleged breach of his fiduciary duty owed to CJ Polymer. Sim was said to have acted in concert with a former sales manager of CJ Polymer to draw business away from the company and had also caused losses in the Savino Transactions affair. However, the allegations were not established and had been properly placed for determination in the suit of CJ Polymer against Sim which was then pending trial. In the premises, the High Court did not err in not considering the issue whether Sim had committed any misconduct. If Sim is found to have committed misconduct, they would be squaring of accounts in the suit of CJ Polymer against him. But as the High Court noted, all allegations against Sim remained unproven. Claim of Sim for the sum of RM6,749,334.00 [54] The High Court allowed the above claim of Sim against CJ Polymer. The first point taken up by counsel for CJ Polymer is that this claim was not pleaded in the originating summons. The pleading issue was not raised by counsel for CJ Polymer in the memorandum of appeal. For this reason alone, we think it should not be permitted to be raised now. [55] The second reason we would dismiss the argument of CJ Polymer’s counsel is this. This claim was originally raised in the High Court writ action of CJ Polymer against Sim. The learned High Court Judge in the said writ action struck out the claim by consent of the parties to avoid multiplicity of proceedings and gave leave to Sim to file an additional affidavit in the oppression action to raise the claim pertaining to the sum of RM6,749,334.00. CJ Polymer’s previous counsel did not see fit to object to it in this action on the ground that it was not pleaded when the matter came before the learned High Court Judge. Therefore, we see no merit in the pleading point. [56] The above-mentioned claim of Sim represented his share of the payment by Eric Kua for his one-third stake in CJ Polymer. Initially, both Kerk and Eric Kua denied that the sale of one-third stake in CJ Polymer to the latter had taken place. However, the High Court found clear evidence of a concluded sale. Their counsel also conceded that a sale was concluded. The agreed sale price for one-third equity in CJ Polymer was RM15 million. Accordingly, Sim’s share for relinquishing his one-third stake to Eric Kua was RM7.5 million. The High Court found that payment by Eric Kua was not made in a straightforward way but through a “convoluted” method. It involved payments through commissions, land purchase, crediting of bank accounts in Singapore and other transactions. This finding is addressed in paragraph 165 of the judgment of the High Court. After taking into account various set-offs, the learned High Court Judge found that a sum RM6,749,334.00 remained owing to Sim and that it was held by CJ Polymer. He ordered CJ Polymer to refund the amount to Sim. [57] However, the argument of counsel for CJ Polymer is that these payments made by Eric Kua represented “director’s advances” by both Sim and Kerk and they had already been repaid in the form of the company’s shares that were allotted to them between 2016 and 2018 and that there were also cash payments. However, as noted by the learned High Court Judge, CJ Polymer did not adduce any documents to show the said allotment or the consideration paid for them and there is no evidence of cash payments either. As submitted by counsel for Sim, CJ Polymer ought to have produced the relevant documents since that would have been in its possession. [58] Before us, counsel for CJ Polymer argued that there was no evidence that Eric Kua had paid the cumulative sum of RM6,749,334.00 into the company for the benefit of Sim. This is their primary contention. However, as we said earlier, the High Court was mindful that payment was not made in a “straightforward” way but in a “convoluted” way. We find no error in the finding of fact by the High Court. CJ Polymer failed to produce any documents as stated by the High Court to support its defence with respect to this claim. On other hand, the High Court found evidence of payment through a “convoluted” method as asserted by Sim. In the premises, we see no reason to disturb the decision of the High Court ordering CJ Polymer to pay Sim the said sum. Return of moveable assets [59] The High Court made a declaration that the items demanded by CJ Polymer in letters dated 14 November 2019, 11 December 2019 and 24 December 2019 as part of the benefits in kind granted to Sim as co-founder of the company cannot be withdrawn. The items include six vehicles given for the use of Sim when he was general manager. The High Court found that the items were given to Sim based on the understanding he was an equal partner and would derive benefits through such perks. As we have already affirmed the said finding of fact when dealing with the quasi-partnership issue, we see no reason to set aside the declaration granted by the High Court. The RM3.5 million advance owed to Sim [60] Sim claimed that he had advanced RM3.5 million to CJ Polymer because of the financial difficulty it faced because of the Savino Transactions. However, at the High Court, it was the defendants’ case that Sim was compensating CJ Polymer for the RM16 million losses it suffered in the Savino Transactions affair. The finding of the High Court was that the money constituted an advance by Sim to CJ Polymer which the latter was obliged to return. It did not constitute compensation for the role that Sim played in the Savino Transactions affair. [61] Counsel for CJ Polymer and Lee argued that the High Court erred in finding that the sum of RM3.5 million was an advance by Sim and not compensation paid by him for the losses suffered by the company in the Savino Transactions affair. We find no merit in this ground of appeal. The defendants did not produce any document that states that the payment of the money by Sim was compensation. Nothing in the accounts of the company or any other contemporaneous documents indicates that it constituted compensation paid by Sim. Furthermore, in its suit against Sim in the writ action, CJ Polymer is claiming the entire purported losses of RM16 million to RM17 million in the Savino Transactions. Assuming that Sim paid the RM3.5 million as compensation, CJ Polymer would have logically accounted for it in the writ action by deducting it. It was also argued that CJ Polymer did not face any financial difficulty. However, as noted by the High Court, Sim referred to financial difficulty only in the context of losses that CJ Polymer suffered as a result of Savino Transactions. But Sim did not say that he was accepting blame and paying compensation. For the above reasons, the finding of the High Court that the RM3.5 million is an advance that CJ Polymer ought to return to Sim is sound. Buyout order [62] The learned High Court Judge made a buyout order. In our view the order is justified as Sim’s shares are locked in the company without him deriving any benefit from it. As stated earlier, CJ Polymer started life as a quasi-partnership. Sim derived benefits from being part of the management. He has since been completely excluded from management and the board of directors. In the premises, it would not be sensible for him to participate in the proposed rights issue and future rights issue as he would remain a minority shareholder without opportunity to share in the company’s profits. His shareholding would also face dilution in a company he co-founded as a quasi-partner and director. In the premises, the buyout order is fair in our view. [63] However, we shall vary the decision of the High Court by removing CJ Polymer from the buyout order granted by High Court. The main prayer in the oppression action is for the remaining shareholders to buyout Sim. Only the alternative prayer is for CJ Polymer to buy out the shares of Sim. We shall also vary the buy-out order of the High Court by ordering the remaining shareholders, Kerk, Eric Kua and Lee to buy-out Sim in proportion to their respective shareholdings in CJ Polymer. Cross-appeals [64] In the cross appeals, Sim is appealing for the 1.5 per cent shares to be included in his stake for the purpose of the buyout order. The learned High Court did not grant Sim’s prayer for the 1.5 per cent to be included in his stake in CJ Polymer for the purpose of buyout. It will be recalled that Sim transferred the 1.5 per cent to Lee when it was suggested that Eric Kua would want a representative on the board of directors as a “check and balance”. [65] Before us, counsel for respondent raised a preliminary point that Sim cannot raise this issue by way of cross-appeal as it is not for the purpose of varying an order made but for seeking a relief that was not granted. In our view, there is no merit in the preliminary point as there is an appeal against the buyout order of the stake of Sim. As the cross-appeals seeks to vary the size of the stake, it comes within Rule 8 of the Rules of the Court of Appeal 1994. [66] We are of the view that the cross-appeals have merit. The learned High Court Judge said that the transfer of the 1.5 per cent shares to Lee was procured through the ruse that she needs to sit on the board of directors. However, Sim willingly transferred his shares. Nonetheless, the High Court made a finding of fact that it was a ruse used by Kerk to break the deadlock and remove Sim. [67] The company has 20 million shares, and one-third would be 6,666,666 shares. As we noted, Sim and Kerk had agreed to divest one-third equity to Eric Kua. Nonetheless, a ruse was employed as found by the learned High Court Judge to procure 1.5 per cent shares early on from Sim which was transferred to Lee who agreed that it was held in trust for Eric Kua. In the premises, the 1.5 per cent shares transferred to Lee should constitute part of the one-third equity sold to Eric Kua. The learned High Court Judge referred to the buyout of one-third shareholding held by Sim. Therefore, the 20 million shares should be divided three ways without first deducting 1.5 per cent from it. Therefore, Sim’s buyout stake should be 6,666,666 shares instead of 6,466,666 shares as ordered by the High Court. Accordingly, we allow the said cross appeals. Representation and cross-examination on Deloitte report [68] One of the reliefs granted by the High Court when granting judgment in favour of Sim on 9 November 2022 was the buyout order that read as follows:

The plaintiff do sell all his 6,466,666 shares in the fourth defendant, and the fourth defendant and/or alternatively the 1st defendant and/or the second defendant and/or the third defendant do purchase and/or cause and procure the purchase of the same, at a fair value to be determined by an independent valuer appointed by the court without any minority discount. The costs of the valuation to be borne by the fourth defendant. [69] A further order was by the court on 12 January 2023 to set out the procedure for the appointment of the independent valuer. In the said order, Lee and CJ Polymer are entitled to appoint their own professional advisers to make representation to the independent valuer and that upon determination by the independent valuer, CJ Polymer and or Kerk, Lee and Eric Kua are to make payment to Sim for his shares within 3 months. [70] The High Court appointed Leonard Woo of Deloitte to be the independent valuer. He prepared a valuation report within three months. As parties were unable to agree to the terms of the appointment, they agreed to a revised Letter of appointment, which states that “it is without prejudice to the right of the parties to challenge the findings in the Deloitte report” [71] Before the 3-month period to pay Sim expired, CJ Polymer filed enclosure 385 on 5 July 2024 to make representation and cross-examination of the Deloitte Final Report. The valuation for one-third stake was RM21 million. Lee supported the application. CJ Polymer contended that it has a right to challenge the Deloitte final report based on the consent order where the parties had expressly agreed to Deloitte’s letter of appointment as revised “without prejudice to the right of the parties to challenge the findings in the Deloitte’s report ...”. [72] The High Court dismissed the application as the buyout order clearly says that the fair value will be determined by the independent valuer and not the court. We agree with the High Court that the consent order whereby the report can be challenged does not alter the original buyout order that states that the fair value will be determined by the independent valuer. Therefore, we agree that making representation and cross examining the valuer would serve no purpose. We therefore dismiss Appeal 1631. Conclusion [73] In conclusion, the Appeal 2146 is dismissed and we order CJ Polymer to pay costs of RM50,000.00 to Sim Chin Hu. Appeal 2148 is dismissed and we order Lee Yu Meng to pay costs of RM50,000.00 to Sim Chin Hu. The cross appeals of Sim Chin Hu in Appeal 2146 and 2148 are allowed with no order as to costs. Appeal 1631 is dismissed and CJ Polymer and Lee Yu Meng are ordered to pay costs of RM20,000.00 each to Sim Chin Hu. All costs orders are subject to payment of allocatur. SGD (RAVINTHRAN PARAMAGURU) Judge Court of Appeal Malaysia Putrajaya Dated: 5th May 2025 Parties Appearing: For Civil Appeal No. W-02(NCC)(A)-2146-11/2022 For the Appellant: Dato’ K. Kirubakaran John Wong Yok Hon Chong Kah yee (Messrs Shui Tai) For the Respondents: 1st Respondent: Brendan Siva Aida Haryani binti Salamon (Messrs Brendan Siva) 2nd Respondent: Dato’ J. Shamesh Raymond Tan (Messrs Jeevapartnership) 3rd Respondent: Alvin Tang Wye Keet Ponnie Govindasamy Kang Zhen Leong (Messrs Alvin Tang Law Office) 4th Respondent: Goh Zhi En Siew Choon Jern Ong Chern Yi (Messrs Mah-Kamariyah & Philip Koh) For Civil Appeal No. W-02(NCC)(A)-2148-11/2022 For the Appellants: 1st Appellant: Dato’ J. Shamesh Raymond Tan (Messrs Jeevapartnership) 2nd Appellant: Alvin Tang Wye Keet Ponnie Govindasamy Kang Zhen Leong (Messrs Alvin Tang Law Office) For the Respondents: 1st Respondent: Brendan Siva Aida Haryani binti Salamon (Messrs Brendan Siva) 2nd Respondent: Goh Zhi En Siew Choon Jern Ong Chern Yi (Messrs Mah-Kamariyah & Philip Koh) 3rd Respondent: Dato’ K. Kirubakaran John Wong Yok Hon Chong Kah yee (Messrs Shui Tai) For Civil Appeal No. W-02((IM)(NCC)-1631-09/2024 For the Appellant: Dato’ K. Kirubakaran John Wong Yok Hon Chong Kah yee (Messrs Shui Tai) For the Respondents: 1st Respondent: Dato’ J. Shamesh Raymond Tan (Messrs Jeevapartnership) 2nd Respondent: Alvin Tan Wye Keet Ponnie Govindasamy Kang Zhen Leong (Messrs Alvin Tang Law Office) 3rd Respondent: Goh Zhi En Siew Choon Jern Ong Chern Yi (Messrs Douglas Yee) 4th Respondent: Brendan Siva Aida Haryani binti Salamon (Messrs Brendan Siva)