Jumabhoy Iqbal v 1. ) R. Jumabhoy & Sons (M) Sdn Bhd (PA-28NCC-66-07/2022)

R. JUMABHOY & SONS (M) SDN BHD [No. Syarikat: 195601000067 (2780-D)]

MUSTAFA ALI R. JUMABHOY (No. K/P: 291218-71-5053)

ANWAR ALI BIN MUSTAFA JUMABHOY (No. K/P: 570924-07-5753)

FAEZALI BIN MUSTAFA R. JUMABHOY (No. K/P: 620602-07-5649)

SALEEM ALI BIN MUSTAFA JUMABHOY (No. Paspot Singapura: K0361428D)

LUBNA BINTI NAZER MOORAJ (No. K/P: 371214-71-5064)] … RESPONDEN-RESPONDEN JUDGMENT PRELUSION [1] There are two companies. One company is 66 years old. The other company is 54 years old. [2] The Petitioner’s father was one of the original shareholders of the companies. The Petitioner’s father was a shareholder of the companies for 64 years and 52 years respectively, when he passed away. The Petitioner is the executor of his father’s estate. [3] In less than two years after his father’s passing, the Petitioner files these Petitions to wind up both companies. He files the winding up Petitions as the executor of his father’s estate, not in his personal capacity. Page 3 of 37 [4] It is important to note that the Petitioner was never a shareholder nor a director of the companies. [5] The Petitions are made on two main grounds—(1) that the directors have acted in their own interests rather than in the interests of all the shareholders, or acted in a manner that is unfair or unjust to the shareholders, and (2) that it is just and equitable to wind up the companies. [6] These two grounds are found in section 465(1)(f) and (h) of the Companies Act 2016, which is set out here— 465 Circumstances in which company may be wound up by Court

The Court may order the winding up if- …(f) the directors have acted in the affairs of the company in the directors' own interests rather than in the interests of the members as a whole or acted in any other manner which appears to be unfair or unjust to members; …(h) the Court is of the opinion that it is just and equitable that the company be wound up;… [7] Should the companies be wound up? PRELIMINARIES [8] There are two winding up Petitions. Petition No. PA-28NCC-66- 07/2022 is about winding up R. Jumabhoy & Sons (M) Sdn Bhd (RJSM). Petition No. PA-28NCC-65-07/2022 is about winding up Trans-Orient (M) Page 4 of 37 Sdn Bhd (TOM). Apart from the respective companies, the parties are the same in both Petitions. [9] For the expeditious and economical determination of the Petitions, both Petitions were heard concurrently, with respective counsel pointing out the factual differences between both companies. [10] This Judgment is for both Petitions. RELATIONSHIP BETWEEN THE PARTIES [11] The Petitioner: Jumabhoy Iqbal is the son of the shareholder in the companies: Ameerali Jumabhoy, deceased. I will refer to the shareholder as “Ameerali”. I will refer to his son: the Petitioner as “Iqbal”. [12] The 2nd Respondent: Mustafa Jumabhoy (Mustafa) is Ameerali’s younger brother. I will refer to the 2nd Respondent as “Mustafa”. The 3rd, 4th and 5th Respondents are Mustafa’s sons. I will refer to them as R3, R4 and R5. The 6th Respondent is Mustafa’s wife, R3R4R5’s mother. I will refer to her as R6. [13] Rajabali Jumabhoy, deceased, was the patriarch. Rajabali was Ameerali’s and Mustafa’s father. BRIEF BACKGROUND FACTS RELEVANT TO THE PETITIONS [14] A Petition to wound up a company is inherently fact-centric. And if it is fact-centric, it is naturally evidence-centric, as it is in all legal proceedings. Page 5 of 37 [15] For both Petitions, due to their long history, the time element surrounding the material facts bear significantly upon the merits of the Petitions. RJSM has a six-decade-long history. TOM has a five-decade-long history. [16] As both parties’ solicitors have set out the facts and arguments comprehensively, I take the liberty of adopting, where it is expedient to do so, some of the expressions and phrases authored by them, for a succinct discussion and decision on the merits of the Petitions. The incorporation of RJSM [17] RJSM was incorporated in May 1956. The objects of RJSM include—

to invest and deal with RJSM’s monies in any manner which the directors see fit, and to vary or realise such investments;

to act as agents for shipping, airlines, and insurance companies, industrial companies and to act as manufacturers’ representatives. [18] Rajabali furnished the initial paid-up capital of RM51,000.00 for 51 shares of RM1,000.00 each. The shareholders were Rajabali, Ameerali, Mustafa, and two other family members. [19] Ameerali was the manager of RJSM at the beginning. But in April 1957, less than a year after RJSM’s incorporation, Ameerali terminated his services as manager. Mustafa was then appointed as manager. Page 6 of 37 [20] From incorporation, RJSM was run as a private limited company. It issued notices of general meetings to its members; it recorded the minutes of its meetings; its accounts were audited and tabled; and its directors came up for retirement and re-election. [21] The first directors of RJSM were Rajabali, Ameerali, Mustafa, and another brother: Yusuf. The directors received directors’ fees, but only Rajabali and Mustafa were active directors. [22] In December 1977, Ameerali resigned as a director. Since then, Ameerali has not participated in RJSM’s management. But he remained a shareholder. [23] At this material time, the directors are Mustafa, his sons, and his wife: R3, R4, R5 and R6. The shareholders are Mustafa, his sons, his wife, and Ameerali. The incorporation of TOM [24] TOM was incorporated in December 1968. The objects of TOM include—

to carry on trade and business in the shipping industry;

to act as agents or managers in the shipping industry. [25] TOM’s issued and paid-up capital is RM2.5 million. [26] From incorporation, TOM was similarly run as a private limited company. It issued notices of general meetings to its members; it recorded Page 7 of 37 the minutes of its meetings; its accounts were audited and tabled; and its directors came up for retirement and re-election. [27] Presently, TOM’s directors are Mustafa, his sons, and his wife: R3, R4, R5 and R6. The shareholders are Mustafa, his sons, his wife, and Ameerali. [28] Ameerali was never a director of TOM. Ameerali was never involved in TOM’s management. The Jumabhoy family quarrel in Singapore [29] Rajabali and his wife owned two valuable properties in Singapore, located at Scotts Road. In the 1950s, these properties were set up as trusts for the benefit of their children, including Ameerali and Mustafa. The properties were eventually owned by Scotts Holding Pte Ltd (SHPL). [30] Ameerali was the chairman of SHPL. Iqbal was the financial controller. Mustafa and Yusuf were on the board, but they were non-executive directors. [31] In the 1980s, the properties were developed into a shopping centre-cum-serviced apartment. [32] In July 1991, SHPL became a public company: Scotts Holdings Ltd (SHL). After it was listed on the Singapore Stock Exchange, SHL continued to be controlled by the Jumabhoy family, by certain trusts that were set up. Page 8 of 37 [33] In 1992, events occurred that caused Rajabali and Mustafa to be estranged. Mustafa and his family were ostracized. Mustafa resigned as a trustee from the relevant trusts. [34] The estrangement, however, lasted only until 1995, when Mustafa resumed his position as trustee in the trusts, and he and his family were brought back into the fold. [35] It suffices to say here that in the 1990s, the Jumabhoy family and its companies were involved in events that resulted in high-profile legal corporate disputes. The disputes even resulted in a public reprimand issued by the Stock Exchange Of Singapore in March 1997. [36] Further, Rajabali, together with other persons that included R3, R4 and R5 (Mustafa’s sons), sued Ameerali and Iqbal, and another grandson. Rajabali, Mustafa, and R3R4R5 succeeded at the Singapore High Court, as well as on appeal to the Singapore Court Of Appeal. [37] It also suffices to say here that into the 2000s, there was disharmony, dissension and quarrel between the Ameerali family and the rest of the Jumabhoy clan. GENERAL PRINCIPLES TO CONSIDER [38] First, it is now established that each Petition is to be determined on its own facts and surrounding circumstances. More specifically, “how or when” it is just and equitable to wind up a company is “necessarily a fact-sensitive exercise, its parameters and application largely dependent on perspective and context”. And what is “just and equitable” must be given Page 9 of 37 a wide and not a narrow meaning—Tan Keen Keong @ Tan Kean Keong v Tan Eng Hong Paper & Stationery Sdn Bhd & Ors and other appeals [2021] 2 MLJ 914 (FC); [2021] 2 AMR 52; [2021] 2 CLJ 318, per Justice Mary Lim FCJ, at paragraph [45]. [39] Second, “what is just and equitable would vary from case to case”. The scenarios that have been recognised as the reason to wind up a company under the just and equitable ground include—(i) “where the relationship between the parties in the company has broken down irretrievably”; and (ii) “where the substratum of the company has gone”— Gulf Business Construction (M) Sdn Bhd v Israq Holding Sdn Bhd [2010] 5 MLJ 34 (CA); [2010] 8 CLJ 775; [2011] MSCLC 10-004, per Justice Malik Ishak JCA, at paragraph [23]. THE PETITIONER’S ARGUMENTS Have the directors acted in their own interests rather than in the interests of the shareholders, or acted in a manner that is unfair or unjust to the shareholders? [40] This is Iqbal’s first ground. He submits that RJSM’s and TOM’s directors have acted in their own interests rather than in the interests of the shareholders. What he means is that the directors have acted in their own interests rather than the interests of Ameerali (until his passing in Nov 2020) and his estate (from Nov 2020 until the filing of the Petition in July 2022). [41] I must point out though, that to be precise, the prescribed ground to wind up a company under section 465(1)(f) is that the directors have acted in the directors’ own interests rather than the interests of the shareholders Page 10 of 37 “as a whole” i.e. in the interests of all the shareholders. The shareholders “as a whole” is not just Ameerali, but also Mustafa and his sons. Personal expenses and cars [42] Iqbal asserts that for both companies, the directors’ personal expenses, including the maintenance of their cars, were paid using company funds. [43] I find that there is no evidence that shows, or evidence from which an inference can be made, that the directors’ personal expenses were in fact paid from company funds. [44] As for the cars, RJSM’s documents show that the company owns a Mercedes Benz C200 and a Honda City. These cars were bought in 2004 and 2016 respectively, and recorded in the company’s audited accounts. And Ameerali acquiesced to the purchase and the retention of the cars. There is no evidence to suggest otherwise. [45] TOM, however, does not own any cars. Iqbal’s allegation about the directors’ personal expenses for cars is misplaced. Anyway, there is no evidence to substantiate this allegation. [46] Hence, I am not inclined to wind up either company on this ground. Increase in directors’ remuneration [47] Iqbal asserts that RJSM and TOM are presently only in the business of investing. As such, there is no necessity to maintain the two companies, Page 11 of 37 and pay two sets of directors’ fees, salaries and costs to carry out both companies’ investment business. [48] Also, despite the decreasing trend of the two companies’ profits in recent years, the directors increased their remuneration. [49] And so Iqbal alleges that the two companies are being used as investment vehicles to support the lifestyle and living expenses of the Mustafa family. [50] Counsel for the Respondents demonstrated to me that there was no correlation between the profits of either company and the directors’ remuneration. They presented a Table that shows the companies’ income (or loss) and the directors’ remuneration for 2016 to 2020. [51] RJSM’s income decreased but TOM‘s income increased in 2017; then both suffered a loss in 2018; then both made an income again (for RJSM, a relatively big income) in 2019, then RJSM’s income decreased in 2020 but TOM’s income increased significantly in 2020. [52] As for directors’ remuneration, RJSM’s directors’ remuneration increased, decreased, and then increased again. TOM’s directors’ remuneration first remained the same, and then increased. [53] The point is that there was no clear correlation between the company’s income and its directors’ remuneration. And I find this fact to be correct. Page 12 of 37 [54] It is important to note here that over the many years (five to six decades), notices of company meetings were sent to Ameerali. And the companies’ audited accounts were sent to Ameerali. There is, however, no evidence that Ameerali, while he was alive, ever protested against or objected to the accounts, nor to how the directors managed the companies. [55] I therefore find that Ameerali acquiesced to the directors’ remuneration, whether they were increased or decreased over the years. [56] The Respondents averred, without refutation from Iqbal, that the companies’ directors have always been reasonably remunerated, and Ameerali himself enjoyed the remuneration when he was RJSM’s director, for over 20 years, until he resigned as director in 1977. As there was no refutation by Iqbal about this averment, I accept it as a fact. [57] More significantly, I find that these complaints by Iqbal are matters of internal management and corporate decision-making. [58] I am guided by case law authority that in a winding up proceeding, the Court’s jurisdiction should not be used to “interfere with the internal management of a company”, where the directors are acting not for “advancing their own interests”, nor acting “contrary the interests of the other shareholders”—Re Bright Pine Mills Pty Ltd [1969] VR 1002 (Supreme Court Of Victoria), at page 1011. [59] Also, a “resentment at being outvoted”, or a “mere dissatisfaction with or disapproval of the conduct of the company’s affairs” are insufficient Page 13 of 37 to prove unfair or unjust treatment—Re Five Minute Car Wash Service Ltd [1966] 1 All E R 242, at page 247, paragraph A-B. [60] Iqbal has not produced evidence to show, or from which it can be inferred, that these decisions, such as the remuneration of directors, were done in a way that was unfair or unjust to Ameerali. Since his resignation as director in 1977, he had never wanted to be involved in the management of RJSM. And he was never a director of TOM. [61] Iqbal, who is the executor of Ameerali’s estate, now asserts these challenges that Ameerali could have made, but did not make, for many decades. [62] Iqbal must at least demonstrate, by evidence, that Ameerali or his estate was treated unfairly or unjustly. I find that he has not done so. [63] Hence, I am similarly not inclined to wind up either company on this ground. Was RJSM or TOM quasi-partnerships? [64] This is Iqbal’s second ground. Iqbal argues that the companies were in effect quasi-partnership companies, such that Ameerali should have been allowed to participate in managing the companies. [65] A quasi-partnership company is defined as “a partnership in which there is an agreement or underlying obligation for the directors to participate in the management of the quasi-partnership company—Yai Page 14 of 37 Yen Hon & Ors v Lim Mong Sam @ Lim Ah Tee [1997] 2 MLJ 190 (CA); [1997] 2 CLJ 812, at MLJ page 200, paragraph G-H. [66] Ordinarily, the articles of association are “the contractual terms which govern the relationships of the shareholders with the company and each other”. The articles set out the powers of the board of directors and the powers of the company in a general meeting. And all the shareholders are “taken to have agreed to the articles”. In other words, normally, strict legal rights based on the articles, bind all the members—Re Saul D Harrison & Sons PLC [1995] 1 BCLC 14 (UKCA), pages 17-18, paragraphs i and a. [67] However, the concept of a quasi-partnership was propounded by the landmark House Of Lords case of Ebrahimi v Westbourne Galleries Ltd [1972] 2 All E R 492 (HL), pages 499–500, paragraphs h, a-e. The principle that was enunciated was that “there is room in company law” to recognize that behind a company, are “individuals, with rights, expectations and obligations” which are “not necessarily submerged in the company structure”. The company structure is the Companies Act and the articles of association, which bind all the shareholders. [68] It is an equitable principle that enables the Courts to take into account “equitable considerations” that is “of a personal character arising between one individual and another, which may make it unjust” to insist on strict legal rights between them. [69] The principles in Ebrahimi (supra) were adopted and followed by the Malaysian Courts in the Privy Council case of Tay Bok Choon v Tahansan Sdn Bhd [1987] 1 MLJ 433 (PC); [1987] 1 CLJ 441, at MLJ pages 434- Page 15 of 37 435, paragraphs H-I and A-B; and the Supreme Court case of Tien Ik Enterprises Sdn Bhd & Ors v Woodsville Sdn Bhd [1995] 1 MLJ 769 (SC); [1995] 2 AMR 1033; [1995] 1 LNS 99, pages 776-777, paragraphs H-I and A. [70] In Ebrahimi (supra), Lord Wilberforce, at All E R page 500, paragraphs d-e, listed the three elements that constitute a quasi-partnership. They are—

a “personal relationship, involving mutual confidence”. This element is often found in a “pre-existing partnership” that has been “converted into a limited company”;

an “agreement, or an understanding” that “all, or some” of the shareholders (even “sleeping members”) shall participate “in the conduct of the business”;

a “restriction on the transfer of the members’ interest in the company”, such that “if confidence is lost, or one member is removed from management, he cannot take out his stake and go elsewhere”. [71] Whether one or more of these three elements is or are present in a company must be evaluated according to the facts and evidence of the case. [72] Re RJSM—Iqbal asserts that RJSM was set up by the patriarch Rajabali as a quasi-partnership and family company, based on mutual trust and confidence. Page 16 of 37 [73] Re TOM—Iqbal asserts that TOM was set up as a patriarchal family company for the sole purpose of carrying out a ship agency business, as a partnership. Iqbal asserts that the relationship between the shareholders was a quasi-partnership based on mutual trust and confidence. (TOM’s founding directors and shareholders were Ameerali and another brother: Yusuf. Yusuf later transferred his interests in TOM to Mustafa and his family.) [74] The burden is on Iqbal to prove that RJSM and TOM were quasi-partnerships. It is not enough for Iqbal to merely assert, without substantiating evidence, that RJSM and TOM were formed as a partnership between Ameerali and Mustafa—Eng Man Hin & Anor v King’s Confectionery Sdn Bhd & Ors [2006] 4 MLJ 421 (HC); [2005] 8 CLJ 77, at MLJ page 435, paragraph [32], [33]. [75] Another factor that I considered is the changes in the shareholders and the shareholding structure of RJSM and TOM over the years, with no objection, but instead consent, from Ameerali. [76] Even if there was any quasi-partnership understanding at the incorporation of the companies, (which is disputed by the Respondents), the changes that occurred over the years had “remetamorphosed” the relationship back to being “an incorporated company not only in form but in fact as well”—Re Lo Siong Fong [1994] 2 MLJ 72 (HC); (1994) 4 MSCLC 91; [1994] 1 LNS 188. [77] Re RJSM—At its incorporation, there were 5 shareholders: Rajabali, his wife, Ameerali, Mustafa, and Yusuf. The current shareholders are Mustafa and his family: R3R4R5R6, and Amreerali. Page 17 of 37 [78] Re TOM—At its incorporation, there were two shareholders: Ameerali and Yusuf. The current shareholders are Mustafa and his family, and Ameerali. [79] Put differently, even taking Iqbal’s case at its highest i.e. imputing a quasi-partnership at the incorporation of the two companies, the changes which have taken place since incorporation, and the obvious silence from Ameerali over the years, do not support Iqbal’s assertion that Ameerali was excluded from the management of the two companies. Article 30 in RJSM’s articles of association [80] Iqbal has another argument relating to RJSM. Iqbal argues that Article 30 of the articles of association prohibits shares in RJSM to be transferred to a non-male descendant of Rajabali, except with the directors’ unanimous consent. Iqbal argues that this discloses that RJSM was a quasi-partnership. [81] I do not see how Article 30 demonstrates that RJSM is a quasi-partnership. The effect of Article 30 is just to keep the shareholding in RJSM in the hands of Rajabali’s male descendants, namely sons and sons of sons. [82] Nevertheless, it is the evidence of the historical facts that were presented to me, and the evidence that I referred to above, that convince me that the companies were not quasi-partnerships. [83] Facts such as— Page 18 of 37

RJSM was incorporated in 1956 as a private limited company according to the Companies Ordinance 1940, without any indication that it was a partnership, or that it had a quasi-partnership structure.

In 1957, only a year after its incorporation, Ameerali stopped having any involvement in the management of RJSM. Instead, Mustafa and his wife moved to Penang to run and manage RJSM.

In 1977, Ameerali, of his own accord, resigned as director. That was 45 years ago. Since then, he was not part of the board of directors. And he never sought to be reappointed to the board.

TOM was also incorporated as a private limited company without any indication that it was a partnership, or that it had a quasi-partnership structure.

Ameerali was never a director in TOM. And he never sought to be appointed to the board.

Both RJSM’s and TOM’s audited financials (which show the companies’ performance, and which also reflected on the performance of the board as well) were sent to Ameerali over the years, and dividends were paid out according to shareholding, and accepted.

General meetings were held, minutes of meetings were recorded, accounts were audited and tabled, and directors were elected. Page 19 of 37

There is no evidence that Ameerali questioned or protested about how RJSM and TOM were managed, or that he complained that he was left out of managing the companies. [84] The dealings between Ameerali and Mustafa in RJSM and TOM, over the five to six decades, do not disclose any understanding or intention of a partnership or quasi-partnership relationship based on mutual trust and confidence. Rather, their conducts reveal, on the balance of probabilities, that RJSM and TOM were private companies limited by shares, which were managed according to their articles. The companies were managed strictly according to the terms of their articles. The companies were managed strictly as companies. [85] I am also not persuaded to wind up the companies on this quasi-partnership ground. Was there an irretrievable breakdown of the family relationship? [86] This is Iqbal’s third ground. Iqbal argues that an irretrievable breakdown of the relationship between the parties in a company is recognised as a just and equitable ground to wind up the company. Iqbal argues that there had been an irretrievable breakdown of the relationship between the Ameerali family and the Mustafa family, such that the Ameerali family was excluded from the management of the companies. [87] Iqbal supports this argument with events that include these events—

A major family disagreement in 1993 resulted in an altercation between Ameerali and Mustafa. The discord between them reached the level where the Ameerali family and the Mustafa Page 20 of 37 family can no longer be in the same room to discuss matters amicably.

The relationship became so hostile that the Mustafa family paid no respect nor condolences to the Ameerali family when Ameerali passed away.

After Ameerali’s passing, the Mustafa family (the directors of the companies) sent important company notices to a non-existent email address, in bad faith. Iqbal asserts that the directors would know that Ameerali’s email address would be inoperable after his demise.

Iqbal asserts further that the directors of the companies did not attempt to contact him (Iqbal) or other members of the Ameerali family. Instead, they proceeded to convene company meetings without Iqbal’s presence.

Iqbal’s reasonable requests for company documents were met with hostility and evasive responses. The directors’ engaged in legal arguments and technical objections, particularly about registering Iqbal as a shareholder for the Companies Commission Of Malaysia’s records.

Between 2018-2020, corporate exercises, including rights issues, were carried out with the net effect of diluting Ameerali’s shareholding in both companies. And no proper notices of these corporate exercises were given to Ameerali or Iqbal.

Iqbal asserts that most recently in June 2022, the directors caused the company secretary of both companies to improperly issue notices dated 9.6.2022 for both the Annual General Meetings (AGMs) on 24.6.2022. Iqbal’s complaint was that the Page 21 of 37

9.6.2022 notices were not valid, as they were not issued in compliance with the requisite notice period. Also, the notices were delivered in bad faith. Although they knew Iqbal’s email address, and they ought to know the time needed for a registered post mail to reach Singapore from Penang, they deliberately chose to only post and not email the notices to Iqbal. The notices were only delivered on 21.6.2022. As a result, Iqbal did not know about the AGMs as he was in Europe until 25.6.2022. He could not respond to the notices and was not able to attend the AGMs.

The underlying purpose of these complaints is disclosed by Iqbal’s averment in both his Petitions—that the Ameerali family was excluded from the management of the two companies. The notices were properly sent [88] Article 103 of RJSM’s articles of association requires either personally serving or posting a notice in an envelope addressed to the member at his registered place of address. Article 106 provides that any notice sent by post is deemed served on the day after the envelope is posted. This is so even in the event of a member’s death, as provided in Article 108. [89] All the companies’ notices were sent to Ameerali’s registered place of address by post. [90] Iqbal’s complaint about the notices for the notices dated 9.6.2022 for the 24.6.2022 AGM is untenable. Adhering to the articles of Page 22 of 37 association, the notices were sent by post to Ameerali’s address, which is also Iqbal’s address. [91] The companies and their directors are not obligated to use additional means of sending the notices to Ameerali or to Iqbal, such as by email. [92] I do not find that any bad faith was demonstrated by posting the notices, as usual over the years, to Ameerali’s address. The alleged irretrievable breakdown in the relationship did not affect the companies [93] Iqbal asserts that there was a breakdown in the relationship between Ameerali and the other Respondent shareholders that warrant winding up RJSM and TOM. In my opinion, however, Iqbal must produce evidence of such a breakdown in the relationship that is confined only to the shareholding and management of RJSM and TOM, and while Ameerali was alive (which is the material time). [94] Amidst the quarrels among the Jumabhoy family members, which extended to litigation in Singapore in the 1990s, these two Penang companies: RJSM and TOM were isolated from it all. [95] The quarrels within the Jumabhoy family did not permeate into RJSM and TOM as companies, not in the way that RJSM and TOM were managed; and not in the manner that RJSM and TOM conducted their businesses. Page 23 of 37 It is not enough to just allege that there was an irretrievable breakdown, there must be evidence [96] Iqbal asserts that because the two families are hostile towards each other, they can no longer work together in the two companies. [97] But, it is not enough to merely assert that the relationship had irretrievably broken down. It must be demonstrated that Ameerali was excluded from the management of the companies—Eng Man Hin (supra) at MLJ page 438-439, paragraphs [44], [45]. [98] Iqbal asserts that Ameerali was excluded from management and control. Ameerali was never excluded. He resigned as RJSM’s director, in 1977 (45 years ago). In his letter of resignation, he cited the pressure of work as the reason for resigning. Also, he never asked to be reinstated as a director. And as for TOM, he was never a director of TOM to start with. [99] Plus, over the years, never did Ameerali nor any of his children write to RJSM or TOM to say that they wished to participate in the management of RJSM and TOM. [100] The alleged irretrievable breakdown had no impact on the companies—not in the running nor the managing of the companies. [101] Further, in contrast to Iqbal’s allegations, the relationship between Ameerali and Mustafa did not deteriorate to the extent that Iqbal made it out to be (to warrant the companies to be wound up). In December 2019, when Mustafa realised that Ameerali’s passport had expired and needed renewal, Mustafa wrote to Ameerali, to— Page 24 of 37

ask him to scan a copy of his new passport to be submitted to the CCM;

inform him that RJSM and TOM have changed their company secretary;

request for an acknowledgement slip for a share certificate that was sent to him. [102] Ameerali scanned and sent his new passport to Mustafa. Mustafa thanked him for it, asked him again for the acknowledgement slip, and wished him a happy new year. Ameerali responded that he could not find the acknowledgement slip. But he wrote to acknowledge his receipt of the share certificate. Ameerali also thanked Mustafa for his good wishes. [103] Then in September 2020, when Mustafa found that Ameerali had not banked in his TOM dividend cheque, he wrote to offer to help Ameereali with the cheque. Mustafa received a warm response from Ameerali’s son: Asad, thanking Mustafa on behalf of Ameerali. [104] Evidence such as this persuades me to decide that whatever familial discord there may have been between Ameerali and Mustafa, their dealings with each other were cordial in relation to the companies and the companies’ businesses. Ameerali did not assert that the directors acted unfairly or unjustly towards him [105] No assertions were made in the 1990s (in the thick of the family quarrel), or in the 2000s, or in the 2010s, right up to Ameerali’s demise in November 2020, that RJSM’s or TOM’s directors—to cite section Page 25 of 37 465(1)(f)—“acted in the affairs of the companies in [their] own interests rather than in the interests of the members as a whole”, or that they acted in a manner that was “unfair or unjust to members”. [106] There is no evidence to disclose that Ameerali, as a shareholder, ever made such adverse assertions against RJSM’s and TOM’s directors. [107] To illustrate, using an RJSM corporate exercise—in 2008, when Ameerali was alive, there was a Bonus Shares Issue. RJSM resolved to give a bonus issue of 1500 shares in the proportion of three shares for every share held by the members. This exercise took place without any dispute. Ameerali did not question or protest against the exercise. [108] In any event, Iqbal’s learned counsel honourably stated that they do not have a problem with this exercise. I would like to remark here that such a concession by counsel, in a heavily contested matter, is to be appreciated. Counsel, and parties, for that matter, all have a duty to do their part to facilitate a just, expeditious and economical disposal of their cases. [109] This brings me to the RJSM 2020 Rights Issue exercise that took place when Ameerali was ill, before his death in November 2020. RJSM resolved to carry out a rights issue of 500,000 new ordinary shares. [110] Ameerali was allotted 62,750 shares. Either he, or Iqbal in his place, was to respond about whether Ameerali wished to take up these shares or not, by 4.12.2020. Ameerali passed away on 24.11.2020. Iqbal was again abroad and could not respond in time. As these shares were not Page 26 of 37 taken up by Ameerali or his estate by the 4.12.2020 deadline, Mustafa subscribed for them and took them up. [111] It was not until 19.12.2020 that Iqbal informed RJSM that Ameerali had passed away; that he (Iqbal) was appointed the executor of the estate; that he received the letter about the allotment of the shares only after Ameerali’s demise; and that he wanted a period of two weeks to consider the allotment. [112] RJSM replied that the rights issue exercise was initiated even before they knew about Ameerali’s death; and that the allotment had closed and completed, since they did not get a response from Ameerali or his estate. [113] What transpired with this 2020 Rights Issue is Iqbal’s source of complaint. Iqbal asserts that the outcome of how the rights issue was carried out when Ameerali was ill and eventually passed away; and how neither Ameerali nor Iqbal could respond on time to take up the allotted shares; and how when Iqbal asked for an extension of time, he was told that the allotment exercise had completed without Ameerali’s or his response—tantamount to evidence that there was a breakdown in the original relationship based on mutual trust and confidence between Ameerali, on the one part, and Mustafa and the other directors on the other part. [114] But to say that these circumstances amount to a breakdown in the relationship that was based on mutual trust and confidence is, in my view, untenable. Page 27 of 37 [115] As for TOM’s corporate exercises—in 2013, there was a rights issue. TOM only received a response from Ameerali, indicating his interest to take up the rights shares two months after the stipulated deadline, and without the requisite payment. [116] By the time Ameerali responded, the 832 shares which were provisionally allotted to Ameerali had been taken up by Mustafa and his wife. [117] Re TOM, there was another rights issue in 2017. Ameerali did not participate in this rights issue at all. [118] I am of the view that these facts of what transpired in relation to the two companies, and the timing that these facts occurred, constituted the vicissitudes (the circumstances) that happened to Ameerali and his estate. I find that the evidence does not disclose any misconduct on the part of RJSM’s or TOM’s directors, certainly not conduct that justifies winding up the companies under sections 465(1)(f) or (h). [119] I also find that the evidence (particularly the exchange of communication in this material period) does not reveal a breakdown of mutual trust and confidence, as alleged, so much so that RJSM and TOM should be wound up. Was there a failure in the companies’ substratum? [120] This is Iqbal’s fourth ground. Iqbal submits that there is a failure in the substratum of the companies. And because there is a failure in the Page 28 of 37 substratum, the companies should be wound up under the just and equitable ground. [121] Re both companies, Iqbal avers that—

In the late 1950s, RJSM was the principal agent for the Shipping Corporation Of India (SCI).

In 1954, Ameerali moved to Penang to set up RJSM, as a shipping agency operating under a sub-agency from the Singapore company: R. Jumabhoy & Sons (Singapore) (RJSS). Put simply, RJSM was RJSS’s sub-agent.

The shipping agency business was managed by Ameerali until Mustafa returned from his studies in the USA. Mustafa returned from the USA and joined Ameerali for a time, before taking over the running of RJSM.

In 1956, Ameerali returned to Singapore. Iqbal avers that Ameerali returned to Singapore after buying No. 39 Jalan Green Hall, 10200 Georgetown, Penang (39 Green Hall), which was RJSM’s office. Iqbal avers that Ameerali was responsible for RJSM buying 39 Green Hal.

Mustafa, however, avers that Ameerali was not involved at any stage of the decision for RJSM to buy 39 Green Hall. It was he (Mustafa), his wife, and Rajabali, who resolved at RJSM’s 1960 EGM to buy 39 Green Hall. Unlike Iqbal’s averment about this fact, Mustafa’s averment is likely to be correct because by 1960, Ameerali had already returned to Singapore from Penang, and Mustafa was then running RJSM. Page 29 of 37

I note here that all the averments in the two Petitions and the affidavits that followed the Petitions were made by Iqbal, who, in all probability, would not have the direct or personal knowledge to aver most of the relevant facts surrounding these two Petitions. Mustafa, on the other hand, would have the direct and personal knowledge of the relevant facts.

Around that time, RJSM was appointed as the shipping agent by Scindia Steam Navigation Company Of India (Scindia). But this was objected to by SCI. As a result of SCI’s objection, in 1968, TOM was set up to be the agent for Scindia.

In the 1980s, the shipping agency business went into decline. Mustafa converted TOM into a travel agency.

Presently, both RJSM and TOM are investment companies. [122] Iqbal asserts that both RJSM and TOM are merely investment companies now. RJSM’s and TOM’s purposes are now contrary to the respective sole purposes for which they were incorporated. This is a failure in the substratum of both companies. For this reason, the two companies should be wound up i.e. liquidated, and there will be a surplus of assets if they are wound up. [123] In opposing this ground, Mustafa presented material facts that include the following facts. First, as early as 1960, Rajabali already identified a change in the purpose of RJSM. He advised Mustafa: “in shipping line, one cannot make money”, and directed Mustafa to “find other business for more profit”. Rajabali directed Mustafa to diversify RJSM’s business. Page 30 of 37 [124] Second, in 1960 itself, RJSM purchased 39 Green Hall. The property was renovated. It was later sold, in 1994, for a relatively huge profit of over RM643,000.00. [125] Third, in 1961, RJSM acquired shares in Rothman’s of Pall Mall (Malaya) Ltd as an investment. [126] Fourth, in RJSM’s financial statements, “investment in shares” was a recorded business activity over the years, including in these years: 1969, 1972, 1977, 1984, 1988, 1997, 1998, 2005, and 2006. [127] A fact to note here is that the Singapore litigation took place in the 1990s. RJSM’s shares trading activities continued throughout and beyond the Singapore litigation. RJSM’s business and operations were not affected by the Singapore litigation. [128] Fifth, as early as 1969, TOM too initiated investment activities, when it purchased shares in Paper Products (M) Bhd. [129] Sixth, in 1972, TOM purchased No. 82, Bishop Street, Georgetown, Penang (82 Bishop Street). By 1981, 82 Bishop Street was developed into a five-storey commercial building called “Wisma Rajab”. In 1984, TOM purchased No. 84, Bishop Street. In 2010, both the Bishop Street properties were sold for a big profit of more than RM2.4 million. [130] Seventh, in 1979, RJSM became a travel agent to MAS. This “other business”, which Rajabali instructed, started even before the companies stopped the shipping agency business in the 1980s. Page 31 of 37 [131] An added fact here is that Ameerali was authorised, by way of a special directors’ meeting in January 1977, to operate the travel agency’s bank accounts. So, Ameerali certainly knew about the change to the initial objects of the companies, which led to the diversification in business that Mustafa and the other directors carried out. [132] Eighth, Ameerali resigned as a director of RJSM in 1977. But as a shareholder, the evidence discloses that he was given, and he accepted dividends from 2015 to 2021. [133] More significantly, after Ameerali passed away, in January 2022, the 2021 dividends were paid to Ameerali’s estate i.e. to Iqbal. The sum of the dividends paid to Iqbal was a substantial RM336,250.00. [134] A point to note about this 2021 dividend-payout that Iqbal accepted, was that he accepted it after the 2020 Rights Issue event that he complained about. [135] Ninth, I find that Ameerali accepted the diversification of business as early as 1960, when Rajabali gave the directive to diversify. Ameerali was a director of RJSM from its incorporation in 1956 until 1977. So he knew about this change in the object of the business. He knew, or should have known, about every decision that the company made from 1956 to 1977. [136] Further, Ameerali would not have continued to think that RJSM’s sole object was the shipping agency business. If he did, there is no evidence to disclose it. The first business was the shipping agency business, no doubt. But there was a change in the object of RJSM, and Page 32 of 37 there was diversification into other businesses. Ameerali knew about it and was actually involved in the change. [137] It was the same for TOM. There was a change, and there was diversification. And Ameerali knew about these changes. [138] I am not moved to wind up the companies on this ground either. Is acquiescence a bar to these Petitions? [139] Another principle that guides me to a decision on these two Petitions is the principle of acquiescence. If a petitioner takes too long a time to file a winding up petition based on certain facts and events, the petitioner can be held to have acquiesced to those facts and events. And the petitioner may be denied the relief of winding up the company for this reason. [140] Where two petitioners took “more than a decade” to file a winding up petition based on three impugned company resolutions, the Court Of Appeal held that the “inordinate delay” showed that the petitioners “had acquiesced to the resolutions”. One of the petitioners knew about the passing of the resolutions, and was in fact “complicit in the matters that arose from two of the resolutions”. The petitioners’ acquiescence moved the Court Of Appeal to disallow the winding up petition—Litar Sistem Adilkap Sdn Bhd v Lee Teak Hock & Anor [2020] 5 MLJ 43 (CA); [2020] AMEJ 0517; [2020] 7 CLJ 84, per Justice Abu Bakar Jais JCA, at paragraphs [36], [37] and [44]. [141] The Court Of Appeal also found that when a party acted “without expediency to protect or further” that party’s rights, when there was a Page 33 of 37 “breach or violation” of those rights, it amounted to “acquiescence”, which means “acceptance of or consent to that situation”. The Court Of Appeal denied the petitioner who had “sat on his rights and accepted tacitly such practices or decisions adopted by a company in its business affairs over time”, but who now wanted the relief of the winding up of the company— Mascon Rinota Sdn Bhd & Ors v Rinota Construction Sdn Bhd [2016] 4 MLJ 400 (CA); [2016] 2 AMCR 206; [2016] 4 CLJ 854; at paragraphs [27] – [29]. [142] Applying these factors, I find that Ameerali’s conduct, over the six decades as a shareholder of RJSM, and over the five decades as a shareholder of TOM, proves that he accepted, consented, and acquiesced to the directors’ decisions for the companies. He did not protest about or query the decisions that were made. [143] I therefore find that acquiescence is a bar to Iqbal’s Petitions here. CONCLUSION [144] I find R2-R6’s assertions to be more persuasive. There was no threat to wind up RJSM in 66 years (incorporated in 1956), and no threat to wind up TOM in 54 years (incorporated in 1968). The current Petitions to wind up the companies were presented about 1½ years after Ameerali’s death. The pertinent and determinant evidence that must be considered is the evidence of the parties’ conduct, and the documentary evidence, while he was alive. [145] I considered the principles propounded in the case law authorities and find that there is no evidence of a quasi-partnership between Ameerali Page 34 of 37 and Mustafa, and there is no breakdown of mutual trust and confidence between them. [146] I find that Iqbal has not proven the grounds that he relies on to wind up RJSM and TOM. I conclude and hold that RJSM and TOM should not be wound up on the grounds presented under sections 465(1)(f) and (h). [147] To wind up a company is a serious matter, often causing grave consequences. [148] RJSM was incorporated in 1956—66 years ago. It has been a going concern, and was run as a private limited company for over six decades. [149] TOM was incorporated in 1968—54 years ago. And it too has been a going concern, and was run as a private limited company for over five decades. [150] The contributory concerned was Ameerali. There was no cogent evidence of the conduct of the parties over the past number of decades that warrants RJSM or TOM to be wound up on just and equitable grounds, or on the grounds that the directors have acted in such a way that was in their own interests, and which was unfair or unjust to the members. [151] I make the following Orders—

Re Petition 66 on RJSM, I dismiss the winding up Petition with costs of RM40K to be paid by the Petitioner: Iqbal to R2-R6 by 19.5.2023; Page 35 of 37

As the Validation Motion in Petition 66 is no longer necessary, I make no Orders on it, but I order costs of RM5K to be paid by the Petitioner: Iqbal to R2-R6 also by 19.5.2023;

Re Petition 65 on TOM, I similarly dismiss the winding up Petition with costs of RM20K to be paid by the Petitioner: Iqbal to R2-R6 by 19.5.2023;

Similarly, as the Validation Motion in Petition 65 is no longer necessary, I make no Orders on it, but I order costs of RM5K to be paid by the Petitioner: Iqbal to R2-R6 also by 19.5.2023.

All costs are subject to the allocatur. [152] Parties agreed that the companies will neither bear nor receive any costs. Dated: 29 May 2023 signed KENNETH ST JAMES Judicial Commissioner Penang High Court Page 36 of 37 Counsel/Solicitors For the Petitioner: Foo Joon Liang with Lee Xin Div & Lee Ming Kai (pupil-in-chambers) [Messrs. Gan Partnership, Kuala Lumpur] For the Respondents: Ranjit Singh, Villie Nethi & Michelle Teoh. [Messrs. Nethi & Saw, Kuala Lumpur] Legislation referred to:

Sections 465(1)(f) & (h) of the Companies Act 2016. Cases referred to:

Tan Keen Keong @ Tan Kean Keong v Tan Eng Hong Paper & Stationery Sdn Bhd & Ors and other appeals [2021] 2 MLJ 914 (FC); [2021] 2 AMR 52; [2021] 2 CLJ 318, per Justice Mary Lim FCJ, at paragraph [45].

Gulf Business Construction (M) Sdn Bhd v Israq Holding Sdn Bhd [2010] 5 MLJ 34 (CA); [2010] 8 CLJ 775; [2011] MSCLC 10- 004, per Justice Malik Ishak JCA, at paragraph [23].

Bright Pine Mills Pty Ltd [1969] VR 1002 (Supreme Court Of Victoria), at page 1011.

Five Minute Car Wash Service Ltd [1966] 1 All E R 242, at page 247, paragraph A-B.

Yai Yen Hon & Ors v Lim Mong Sam @ Lim Ah Tee [1997] 2 MLJ 190 (CA); [1997] 2 CLJ 812, at MLJ page 200, paragraph G-H.

Saul D Harrison & Sons PLC [1995] 1 BCLC 14 (UKCA), at pages 17-18, paragraphs i and a.

Ebrahimi v Westbourne Galleries Ltd [1972] 2 All E R 492 (HL), pages 499–500, paragraphs h, a-e.

Tay Bok Choon v Tahansan Sdn Bhd [1987] 1 MLJ 433 (PC); [1987] 1 CLJ 441, at MLJ pages 434-435, paragraphs H-I and A-B.

Tien Ik Enterprises Sdn Bhd & Ors v Woodsville Sdn Bhd [1995] 1 MLJ 769 (SC); [1995] 2 AMR 1033; [1995] 1 LNS 99, pages 776 777, paragraphs H-I and A.

Eng Man Hin & Anor v King’s Confectionery Sdn Bhd & Ors [2006] 4 MLJ 421 (HC); [2005] 8 CLJ 77, at MLJ page 435, paragraph [32], [33].

Lo Siong Fong [1994] 2 MLJ 72 (HC); (1994) 4 MSCLC 91; [1994]

Litar Sistem Adilkap Sdn Bhd v Lee Teak Hock & Anor [2020] 5 MLJ 43 (CA); [2020] AMEJ 0517; [2020] 7 CLJ 84, per Justice Abu Bakar Jais JCA, at paragraphs [36], [37] and [44].

Mascon Rinota Sdn Bhd & Ors v Rinota Construction Sdn Bhd [2016] 4 MLJ 400 (CA); [2016] 2 AMCR 206; [2016] 4 CLJ 854; at paragraphs [27] – [29].