Kerk Han Meng v Lee Yu Meng (WA-24NCC-547-10/2023)

LEE YU MENG (NO K/P: 740404­08­5412)

KUA CHIN WEE (NO K/P: 731004­01­5007)

WONG KOK KHEONG (NO K/P: 561031­08­5351)

SIM CHIN HU (NO K/P: 711010­03­5081)

CJ POLYMERS SDN BHD (NO SYARIKAT: 200101003712) …DEFENDAN­ DEFENDAN GROUNDS OF JUDGMENT (Enclosure 273)

On 29­10­2025, Kerk Han Meng, the Plaintiff (“Kerk (P)”), filed an urgent application for interim injunctions in these proceedings (“Enclosure 273”). Briefly, he sought to restrain any dealings with the assets of the 5th Defendant and the subject company, CJPolymers Sdn Bhd (“CJP (D5)”), other than in the ordinary course of business, up to a limit of RM42 million.

Kerk (P) claimed that he has a good arguable case and that there is a real risk of dissipation of the assets of CJP (D5) while it is under the control of Lee Yu Meng, the 1st Defendant (“Lee (D1)”) and Wong Kong Kheong, the 3rd Defendant (“Wong S/N lHIgb6ekky78qCc4ckCQ (D3)”). Kua Chin Wee, the 2nd Defendant (“Kua (D2)”), was aligned with Kerk (P) on Enclosure 273. Background facts

CJP (D5) was started by Kerk (P) and one Sim Chin Hu, previously the 4th Defendant named here (“Sim”) on a 50­50 basis to trade in polymers and textiles. In 2020, Sim filed Kuala Lumpur High Court Originating Summons No. WA­24NCC­ 138­03/2020 (“OS 138”) against Kerk (P), Lee (D1), Kua (D2) and CJP (D5), citing oppression of the minority.

Sim succeeded in OS 138. Among other reliefs, the defendants were ordered to buy out Sim’s shares. The valuation process has not been completed and Sim is still a shareholder of CJP (D5). Thus, immediately after OS 138 concluded, the shareholding structure in CJP (D5) was as follows: Shareholders Shares Percentage Kerk (P) 15,520,000 59.7 Sim 9,700,000 37.3 Lee (D1) 780,000 3 TOTAL 26,000,000 100 S/N lHIgb6ekky78qCc4ckCQ

Due to events that began unfolding in CJP (D5) in 2023, which are now the subject matter of this current action, Sim obtained a post­judgment Mareva injunction in OS 138. On 7­6­2024, a consent order was recorded here in which the Defendants undertook to comply with the Mareva injunction in OS 138.

This undertaking ceased upon the discharge of the injunction in OS 138 on 29­10­2025 after a contested hearing. That prompted the filing of Enclosure 273. The principal ground of the application in Enclosure 273 was said to arise from the discharge of a similarly worded injunction in OS 138.

According to Kerk (P) and Kua (D2), Lee (D1)’s shares were held on trust for Kua (D2). In a twist of events however, Lee (D1) took steps to remove Kerk (P) as a director of CJP (D5) in 2023 for reasons related to CJP (D5)’s suit against him and Sim in Kuala Lumpur High Court Suit No: WA­22NCC­786­ 10/2023 for misfeasance.

The vacating of Kerk (P)’s office was effected by resorting to Article 72(h) of the Articles of Association of CJP (D5): “72. The office of director shall become vacant if the director— …

is directly or indirectly interested in any contract or proposed contract with the company and fails to S/N lHIgb6ekky78qCc4ckCQ declare the nature of his interest in manner required by the Act.”

The resolution that Lee (D1) passed stated that an amount of RM3,839,760.00 purportedly remitted by Kerk (P) for the subscription of 3,839,760 rights issue shares were misappropriated from CJP (D5) using several invoices from Kerk (P)’s 50% owned offshore companies. Kerk (P) disputes the allegations against him and highlighted that Lee (D1) was the financial advisor of CJP (D5) at the material time.

Wong (D3) was appointed as a director, and in a further step that consolidated control of CJP (D5), Lee (D1) and Wong (D3) caused CJP (D5) to issue and allot 26 million shares to Wong (D3) for RM1.3 million. Kerk (P)’s majority was thus diluted.

The present action by Kerk (P) is to challenge the validity of the above actions and is framed as a minority oppression type of claim. It was taken out pursuant to section 346 of the Companies Act 2016 (“CA”), but also identified sections 465(1)(f) and (h) of the CA to invoke the winding up jurisdiction of the Court.

The remedies that Kerk (P) seeks are to unravel his removal, Wong (D3)’s appointment and share allotment, to compel the sale of Lee (D1)’s shares or alternatively, the winding­up of CJP (D5). Kerk (P) also prayed for an inquiry into his damages. S/N lHIgb6ekky78qCc4ckCQ Analysis and findings Mareva freezing order

Although Enclosure 273 did not identify the judgment sum it sought to protect and had instead set an upper limit for CJP (D5)’s allowed spending in the ordinary course of business, it was unmistakably framed as a freezing order of the Mareva variety in the supporting affidavit. That was the nature of the injunction in OS 138 it purported to replicate and how Kerk

(P)’s counsel had initially referred to the orders sought.

It is well­established that the Mareva jurisdiction rests on the principle that a defendant should not be permitted to dissipate assets so as to render nugatory the enforcement of a future judgment, and that such relief is necessary to preserve the Court’s ability to do justice (S&F International Limited v Trans­Con Engineering Sdn Bhd [1985] 1 MLJ 62 (“S&F International”)).

To move the Court for a Mareva freezing order, the necessary elements must be demonstrated by Kerk (P): firstly, that he had a good arguable case; secondly, that CJP (D5) had assets within jurisdiction, and thirdly, that there was a real risk of the assets being dissipated or removed before judgment and solid evidence to establish the risk (Creative Furnishing Sdn Bhd v Wong Koi [1989] 2 MLJ 153). S/N lHIgb6ekky78qCc4ckCQ

Kerk (P) argued, and this Court agreed, that he has a good arguable case. Per the test in S&F International, it was “more than barely capable of serious argument” that the takeover of CJP (D5) by Lee (D1) and Wong (D3) could be procedurally and/or substantively unlawful considering that the transactions were undertaken at a time when Kerk (P) and Sim were the only 2 directors, with Lee (D1) as financial advisor, all of whom were allegedly privy to the same.

There is also no dispute that CJP (D5) has assets in the jurisdiction.

However, no grounds were cited in support of the contention that there was a real risk of dissipation of assets other than:

that a similar order was granted in OS138; and

that CJP (D5) had been reclassified as an exempt private company, exempting it from filing financial statements with the Companies Commission of Malaysia.

This Court had stated in refusing an ad interim injunction when this matter first came up, that it must evaluate Enclosure 273 on its own merits and not grant one because an injunction in similar terms was granted in OS 138. The ad interim injunction was refused because there was no evidence of a real risk of dissipation of assets to frustrate a future judgment, evident in Kerk (P)’s supporting affidavit for Enclosure 273. S/N lHIgb6ekky78qCc4ckCQ

After completion of affidavit exchanges, including the entry of late affidavits that this Court allowed despite objections to Kerk

(P)’s belated “fresh evidence” of dissipation, this Court was still not persuaded that the evidence presented demonstrated a real risk of dissipation of CJP (D5)’s assets. The evidence presented were as follows: a) Re­classification of CJP (D5)’s status to an exempt private company. There was no challenge to the fact that CJP (D5) has held this status between 2017­2022 while Kerk (P) himself was a director or that after his removal as a director, Kerk (P) continued to receive the audited financial statements of CJP (D5) as a shareholder. b) Payment of excessive legal fees to several law firms to represent CJP (D5) in legal proceedings and excessive bonuses to Lee (D1) and Wong (D3) in 2024. These were not newly discovered or surreptitious payments, but matters that had already been raised in an earlier application which was subsequently withdrawn. This Court also accepts that the Mareva jurisdiction was never intended to restrain such expenditure, and that Kerk (P)’s recourse for this complaint lies elsewhere. S/N lHIgb6ekky78qCc4ckCQ c) Alleged sale of real properties belonging to CJP (D5). Kerk (P) had adduced fresh evidence via affidavits filed after written submissions had been filed and asserted through counsel from the Bar that a real estate agent (“Toh”) had communicated to Kerk (P) via WhatsApp that an offer to purchase one of CJP (D5)’s factory buildings dated 29­10­2025 had allegedly been given to Wong (D3). In the interest of justice, this Court allowed the late affidavits and upon the undertaking of CJP (D5) through counsel that the property in question will not be dealt with in the interim, gave time for responses. Lee (D1) and Wong (D3) both affirmed affidavits and denied appointing any agent to sell CJP (D5)’s property, exhibiting a statutory declaration by Toh who declared that neither Lee (D1), Wong (D3) nor CJP (D5) had approached him. Toh said that he had independently approached CJP (D5) about a potential buyer for the property and had not given the alleged offer letter to CJP (D5), Lee (D1) or Wong (D3). Thus, there was no solid evidence that allowed this Court to find a real risk that the assets of CJP (D5) were in jeopardy, sufficient to make the orders sought in Enclosure 273. S/N lHIgb6ekky78qCc4ckCQ

Kua (D2) had argued in support of Kerk (P) that the underhanded way in which Lee (D1) wrested control of CJP (D5) and installed Wong (D3) as a majority shareholder, were in itself sufficient evidence of the risk. He argued that the ouster of Kerk (P) and dilution of his shares constituted evidence of risk of dissipation in OS 138, and these facts remained unchanged.

This Court was unable to agree with this submission, as there are no grounds of judgment for the grant of the post­judgment Mareva injunction in OS 138. This Court is not privy to the evidence and arguments presented in OS 138 that guided the Court’s exercise of discretion in that matter. Furthermore, circumstances have changed i.e. the injunction in OS 138 was contested, it was later discharged and no one appealed.

Further, based on the argument by Kua (D2) above, the allegations of dishonesty refer only to the actions of Lee (D1) and Wong (D3) to exclude Kerk (P) and consolidate their power in CJP (D5). As observed by the Court of Appeal in Lee Kai Wuen & Anor v. Lee Yee Wuen [2022] MLJU 3411: “[100] As for allegations of misappropriation, dishonesty or lack of probity, it is a matter of common sense that even if there exists evidence of these allegations, they must also be of a nature that has a real and material bearing on, or of a nature that can justify an S/N lHIgb6ekky78qCc4ckCQ inference of, a real risk of dissipation of assets (see Bouvier, Yves Charles Edgar And Another v. Accent Delight International Ltd And Another And Another Appeal [2015] SGCA 45; [2015] 5 SLR 558). Mere allegations of these nature, even with some evidence in support of these allegations, would not per se warrant a presumption or inference that there exists a real risk of dissipation of assets. [101] As mentioned, there was no direct evidence of any such risk of dissipation by both appellants of their assets. How the learned judge came to a conclusion on this issue is set out in the grounds of judgment thus: [31] Given that the Court had earlier found a good and arguable case for misappropriation, appointment of the 2nd Defendant as not being in the best interest and that the 1st Defendant had breached his director’s duty in not convening an EGM, these were acts which the Court could take into account in presuming a real risk of dissipation. (emphasis added) S/N lHIgb6ekky78qCc4ckCQ [102] The reasoning disclosed in this paragraph of the grounds of judgment in fact suggests a process in which the learned judge had inferred from the ‘acts’ referred to, rather than presumed, that there exists a real risk of dissipation. [103] However, we are of the view that to infer a real risk of dissipation merely because a good arguable case has been made out is a step too far. This would be tantamount to conflating the two separate required ingredients into one.” [Emphasis added]

Based on the material presently before this Court, the suggested allegation that D1 (Lee) and D3 (Wong) mean to strip CJP (D5) of its assets for their own benefit now that they are in control, remains at best a bare allegation that is insufficient as proof of a real risk that the assets of CJP (D5) will be dissipated pending the determination of this Originating Summons. Proprietary injunction

An argument was also made that as a Mareva injunction, Enclosure 273 was a non­starter because no judgment is sought against CJP (D5) in these proceedings, unlike in OS S/N lHIgb6ekky78qCc4ckCQ 138 where, at stake, was CJP (D5)’s ability to execute the buy­ out of Sim as initially ordered.

Although Kerk (P) does pray for general damages from CJP (D5) as a final remedy, he pivoted his case to argue that Enclosure 273 is not really a Mareva injunction, but a proprietary injunction. He did so because, as argued, the applicable test for a proprietary injunction is the American Cyanamid test and no evidence of “real risk of dissipation” is required.

There is force in the argument that Kerk (P) should not be permitted to introduce new evidence for an application for urgent freezing orders in a piecemeal manner, or to change the basis of his application to deal with deficiencies in the evidence, both of which happened in this case. However, this Court looked at the substance and not the form of Enclosure

273.

Although described as a Mareva relief, it is also possible to construe Enclosure 273 as an application by Kerk (P) to seek the protection of assets of CJP (D5) as a proprietary injunction, pending the determination of the underlying Originating Summons here, as he has a legitimate interest in preserving the value of his shares in CJP (D5). S/N lHIgb6ekky78qCc4ckCQ

This Court accepts that when there is a tussle over control of a company between shareholders, the court may make interim orders, including freezing orders, the purpose of which is to preserve the value of a company as the ultimate relief. However, such interim injunctions still have to be made on a principled basis.

Counsel for Kerk (P) referred to Koza Ltd v Koza Altin Isletmeleri AS [2021] 1 WLR 170 (“Koza”) it was observed there that: “It would be a triumph of form over substance if the court were now to be deprived of the jurisdiction to grant interlocutory relief to preserve the company’s assets merely because Koza Ltd has not threatened such obstruction and so no quia timet injunction is yet justified.”

In Koza, the defendant Koza Altin Isletmeleri AS (the parent company), sought to restrain the first claimant, Koza Ltd (the subsidiary), and its director, from using £3 million of Koza Ltd's assets to fund an arbitration claim. The injunction was sought to prevent Koza Ltd from making the payment on the basis that doing so would constitute a breach of a prior undertaking given by Koza Ltd to the court. S/N lHIgb6ekky78qCc4ckCQ

Thus, the interlocutory injunction sought Koza was primarily sought and granted on an even stronger basis: the court's inherent jurisdiction to enforce its own orders and undertakings.

More crucially, this Court found that the pivot in the basis for the interim injunction in Enclosure 273 did not help Kerk (P) as Koza and the other relevant cases involved interim injunctions granted directly in aid of the final remedy because the allegation of misappropriation of company assets were the serious issue to be tried.

In Re Ravenhart Service (Holdings) Ltd; Reiner v Gershinson and others [2004] EWHC 76 (“Re Ravenhart”), an interim injunction was sought to restrain the company and its directors from making specific types of future payments (unauthorized remuneration, fees) out of company funds.

It was a protective injunction over the company's assets to preserve the company's value as the unauthorized payments were the primary conduct alleged to be unfairly prejudicial, making the link for the interim relief direct and necessary.

Thus in Re Ravenhart, the injunction was not found to be fatally flawed although the petition did not assert any cause of action for restitution or other monetary payment, but rather an order for the purchase of the petitioner’s shares by one or more S/N lHIgb6ekky78qCc4ckCQ of the respondents, or alternatively an order for compulsory winding up.

However, this is not the case with the substantive claim here. Save for a passing remark that Kerk (P)’s exclusion was for Lee (D1) and Wong (D3) to misappropriate funds from CJP (D5), no specific allegations were made or evidence presented. The orders sought in Enclosure 273 were also not limited to restraining specific acts of alleged misappropriation.

For the above reasons, this Court found no basis to re­impose the OS 138 injunction. There is no evidence of any dissipation of assets that would justify a general freezing order over the defendants’ assets, nor would a proprietary injunction lie in circumstances where the complaint does not disclose any jeopardy to the company’s assets.

As a shareholder, Kerk (P) is entitled to receive audited financial statements and, in addition, enjoys other statutory rights of oversight under company law. Ultimately, if he is correct in asserting that Lee (D1) and Wong (D3) are interlopers who have acted unlawfully, there are proper avenues available to him to seek appropriate relief. S/N lHIgb6ekky78qCc4ckCQ

This Court accordingly declined to grant the injunctions sought in Enclosure 273 and dismissed the application, with costs of RM30,000.00 to CJP (D5) and RM10,000.00 each to Lee (D1) and Wong (D3). Bertarikh : 15 Disember 2025 ELAINE YAP CHIN GAIK PESURUHJAYA KEHAKIMAN MAHKAMAH TINGGI MALAYA KUALA LUMPUR S/N lHIgb6ekky78qCc4ckCQ Peguam Untuk Plaintif: Yap Boon Hau, bersamanya Lock Jun Qi dan Goh Zhi En Tetuan Tang Hong & Lock Untuk Defendan Pertama: Alvin Tang Wye Keet, bersamanya Chin Wui Imm Tetuan Alvin Tang Law Office Untuk Defendan Kedua: Siew Choo Jern Tetuan Douglas Yee Untuk Defendan Ketiga: Muhillan a/l Sivananthan, bersamanya Sum Pui Si Tetuan S.Muhillan Untuk Defendan Kelima: AG Kalidas Krishnan a/l Gnanaprakasam, bersamanya Wesley Wong Ray Fung Tetuan K.Nadarajah & Partners S/N lHIgb6ekky78qCc4ckCQ