LIM Sim Ee v Dsi Northern Source Sdn Bhd (BA-22NCC-61-05/2022)

1.1

This action arises from the Plaintiff’s claim brought pursuant to section 346 of the Companies Act 2016 (henceforth, Act 777), in which he alleges that the affairs of the 1st Defendant were conducted in a manner oppressive to him as a shareholder. The reliefs sought include declarations to invalidate corporate acts, restoration of his alleged shareholding position, a compulsory buy-out of his shares, damages, and consequential orders.

The matter proceeded to a full trial, during which the Court heard oral evidence from the parties, examined the documentary record, including the witness statements and exhibits, and considered the written submissions filed on both sides.

The Plaintiff’s case, as pleaded in the Amended Statement of Claim and developed in submissions, is that he was a 20% shareholder in the 1st Defendant and that the Defendants engaged in a series of coordinated acts which cumulatively resulted in the effective destruction of his interest.

The Plaintiff relies in particular on the increase of share capital and allotment of shares, the alleged failure of the 3rd Defendant to honour a Share Sale Agreement for RM3,000,000.00, the transfer of shares in Salam Murni Holdings Sdn Bhd (henceforth, SMHSB) the restructuring of Bumi Segar Indah Sdn Bhd (henceforth, BSISB) his removal as a director, and the alleged denial of access to corporate records. These acts are said not to be isolated, but to form what the Plaintiff describes as “a systematic squeeze-out”.

It is not disputed that, prior to the events in question, the 1st Defendant was a closely held company with the Plaintiff holding 2,000 shares (20%), the 2nd Defendant holding 7,000 shares (70%), and the 3rd Defendant holding 1,000 shares (10%).

The Plaintiff was also a director of the company and its subsidiaries. He contends that the relationship between the parties involved mutual trust and participation in management. While the Defendants do not accept that this amounted to a quasi-partnership in law, the Plaintiff’s involvement in the company’s affairs at the relevant time is not in dispute.

The Plaintiff’s evidence on how he acquired his shares is limited. He states that he was “offered” the shares. The documentary record, however, shows that the shares were transferred to him by the 3rd Defendant. Crucially, the Plaintiff did not produce any documentary evidence of payment. This issue was squarely put to him during cross-examination, and the Notes of Proceedings record the following exchange: “Q: You did not pay for the 2,000 shares, correct? Yes, I agree.”

This admission was not subsequently qualified or contradicted. No bank records, receipts, or other evidence were produced to demonstrate that the Plaintiff provided consideration for the shares. This forms an important part of the evidential context.

The Plaintiff also described his role within the company as being at a strategic level. However, he accepted that the financial and operational control of the company rested with the 2nd and 3rd Defendants, stating: “D2 and D3 control and administer the whole operation, finances and management…”

This evidence indicates that the Plaintiff did not exercise control over the financial affairs of the company. A central aspect of the Plaintiff’s case is the alleged Share Sale Agreement dated 2 September 2019, under which the 3rd Defendant is said to have agreed to purchase the Plaintiff’s shares for RM3,000,000.00.

The Plaintiff contends that the failure to pay this sum explains the subsequent corporate acts. However, the evidential foundation for this agreement is weak. During cross-examination, the Plaintiff accepted: “Q: You are not an expert in verifying signatures? A: I’m not an expert in analysing signatures.”

No attesting witness or expert evidence was called to verify the document, and no contemporaneous evidence of execution or payment was produced.

The Plaintiff’s principal complaint concerns the increase in share capital and the dilution of his shareholding. The documentary record shows that new shares were issued, resulting in a reduction of his shareholding to approximately 0.07%. The Plaintiff contends that the process was procedurally defective and relies on inconsistencies in the corporate documents.

The issue of participation was put directly to the Plaintiff: “Q: You received the documents relating to the share allotment? Yes. You did not sign or return the Form of Renunciation? I did not sign. I did not reply.”

Further, when the 2nd Defendant was confronted with a statement in the resolution that the Plaintiff had returned the Form of Renunciation, the Notes of Proceedings record: “Q: That statement is correct? That is untrue.”

The Plaintiff also challenges the justification for the capital increase. The 3rd Defendant accepted in cross-examination: “Q: The 1st Defendant has no business?

The Plaintiff relies on this to argue that the rights issue could not have been for genuine commercial purposes. The Plaintiff further relies on the transfer of shares in Salam Murni Holdings Sdn Bhd and the restructuring of Bumi Segar Indah Sdn Bhd, contending that these amounted to asset stripping. He also relies on his removal as a director and the alleged denial of access to records.

The Plaintiff’s own conduct is also relevant. The Notes of Proceedings record: “Q: You stopped attending the office?

This forms part of the factual matrix to be considered. Having regard to all the above, the Court now turns to the issues arising from the Plaintiff’s claim.

2.1 ISSUES FOR DETERMINATION AND PARTIES’

The issues for determination arise directly from the Plaintiff’s pleadings and the agreed issues to be tried. The Court confines itself to those issues.

The Plaintiff’s case is that the Defendants engaged in a course of conduct which, taken cumulatively, amounted to oppression. The Defendants deny this and contend that the Plaintiff has failed to prove the factual basis of his claim.

The first issue concerns whether the Plaintiff has established a genuine interest in the shares capable of protection.

The second concerns whether the capital increase and dilution were oppressive.

The third relates to the transfer of SMHSB and the restructuring of BSISB.

The fourth concerns the Plaintiff’s removal and denial of access to records.

The final issue is whether the conduct, taken cumulatively, amounts to oppression.

The Plaintiff submits that the rights issue was procedurally defective and carried out for an improper purpose. He relies on inconsistencies in the documents and the alleged lack of business justification.

The Defendants contend that the Plaintiff was given the opportunity to participate and chose not to do so. The Plaintiff further relies on the alleged RM3,000,000 agreement. The Defendants contend that this has not been proven.

The Court now turns to consider these issues in light of the evidence.

3.1

The Plaintiff’s claim is brought pursuant to section 346 of the Companies Act 2016. It is therefore necessary to begin with the statutory language itself, as it defines both the threshold for intervention and the scope of the Court’s powers.

Section 346(1) of the Companies Act 2016 provides: “Any member or debenture holder of a company may apply to the Court for an order under this section on the ground—

that the affairs of the company are being conducted or the powers of the directors are being exercised in a manner oppressive to one or more of the members or debenture holders including himself or in disregard of his or their interests as members, shareholders or debenture holders of the company; or

that some act of the company has been done or is threatened or that some resolution of the members, debenture holders or any class of them has been passed or is proposed which unfairly discriminates against or is otherwise prejudicial to one or more of the members or debenture holders including himself.”

The statutory language makes clear that the Court is not concerned with every dispute that arises in the course of corporate management. The conduct complained of must reach a level where it can properly be characterised as oppressive, or as reflecting a disregard of the member’s interests, or as being unfairly prejudicial. The Court must therefore examine not only what occurred, but whether what occurred meets that legal threshold.

The burden of proof rests on the Plaintiff. It is for the Plaintiff to establish, on a balance of probabilities, that the acts relied upon fall within the statutory definition. Allegations of impropriety, including those suggesting bad faith or lack of probity, require cogent evidence. Suspicion, inference, or dissatisfaction with outcomes are insufficient.

The Court is guided by the Federal Court in Low Cheng Tek & Ors v Low En Nee [2024] 5 MLJ 580, which emphasises that the inquiry is directed at whether the conduct is commercially unfair and whether it results in personal prejudice to the shareholder.

The Court must also distinguish between a wrong done to the company and a wrong done to the shareholder personally. Where the loss is suffered by the company, it cannot, without more, be treated as a personal claim.

It is also well established that not every dilution of shareholding amounts to oppression. In Seah Eng Toh Daniel v Kingsley Khoo Hoi Leng & 3 Ors [2015] MLJU 2353, it was recognised that a rights issue undertaken for legitimate corporate purposes does not amount to oppression merely because it affects a minority shareholder. The Court must therefore consider whether the dilution arose from unfair exclusion or from the shareholder’s own decision not to participate.

Similarly, where shares are issued, the Court must consider whether the power has been exercised for a proper purpose. The principle in Howard Smith Ltd v Ampol Petroleum Ltd & Ors [1974] AC 821 requires that such power be exercised bona fide in the interests of the company. The Court must therefore examine whether the dominant purpose of the allotment was legitimate or whether it was a device to alter control or prejudice a particular shareholder.

Against this legal framework, the Court turns to the issues raised in the pleadings.

3.1.1 The Plaintiff’s Interest in the Shares

The Plaintiff’s claim depends fundamentally on the assertion that he held a substantive interest in the shares of the 1st Defendant. While his status as a registered shareholder is not disputed, the Court must consider whether that status reflects a genuine proprietary interest.

The Plaintiff’s own evidence does not support such a conclusion. During cross-examination, he accepted that he did not pay for the shares. This admission is recorded clearly in the Notes of Proceedings. The Plaintiff did not subsequently produce any documentary evidence to show that he had provided consideration. There are no bank records, no transfer documents, and no contemporaneous evidence of payment.

This absence of evidence is not a mere technical deficiency. It goes to the root of the Plaintiff’s claim. The Plaintiff seeks to assert rights arising from share ownership, yet has not established the basis upon which those shares were acquired in substance.

The financial records further reinforce this position. The evidence shows that the funding of the company was provided by the 3rd Defendant. The Plaintiff’s own evidence confirms that he did not control the finances of the company and that the financial and operational management rested with the 2nd and 3rd Defendants.

In these circumstances, the Court is unable to conclude that the Plaintiff has established a beneficial or economic interest in the shares. At most, the Plaintiff’s position is that of a registered holder without demonstrated financial stake. This finding informs the Court’s approach to the remaining issues, particularly in relation to alleged prejudice.

On the evidence before me, I am unable to accept that the Plaintiff has established a substantive beneficial interest in the shares. This is not a matter of form but in substance, and the absence of any proof of payment, coupled with his own admission in cross-examination, weighs heavily against Plaintiff’s position.

3.1.2 The Capital Increase and Dilution

The Plaintiff’s principal complaint concerns the increase in the issued and paid-up share capital of the 1st Defendant and the consequential dilution of his shareholding. The Plaintiff contends that the rights issue was procedurally defective and carried out for an improper purpose, namely to dilute his interest and consolidate control in the hands of the 3rd Defendant. The Court therefore examines both the process by which the shares were allotted and the purpose and effect of that process.

On the evidence, it is not in dispute that a capital exercise took place and that new shares were allotted. The Plaintiff relies on inconsistencies in the corporate documents, including discrepancies in the dates of resolutions and the sequence of their circulation.

In particular, reliance is placed on the fact that certain resolutions appear to bear dates earlier than their circulation and that applications for shares were made before formal approval was documented. These matters were explored in cross-examination and are not without concern.

The Court accepts that such irregularities exist. They raise legitimate questions as to the accuracy and integrity of the corporate record. However, the law draws a distinction between procedural irregularity and substantive oppression. Section 346 of Act 777 is not engaged merely because corporate documentation is imperfect. The Court must be satisfied that the process, viewed as a whole, reflects conduct that is oppressive, unfairly prejudicial, or in disregard of the member’s interests.

In this regard, the Plaintiff’s own evidence is significant. The Notes of Proceedings record that he accepted receiving documents relating to the capital exercise: You received the documents relating to the share allotment? Yes.

He further accepted that he did not take steps to respond: You did not sign or return the Form of Renunciation? I did not sign. I did not reply.

This evidence establishes that the Plaintiff was aware of the capital exercise and did not act upon it. There is no evidence that he was prevented from participating or that he attempted to assert his position at the material time.

The Plaintiff relies on the admission by the 2nd Defendant that the statement in the Members’ Resolution regarding the Plaintiff’s renunciation was “untrue”. The Court has taken this into account. While this undermines the accuracy of that particular document, it does not displace the Plaintiff’s own evidence that he did not respond. The Court must therefore consider the totality of the evidence, not isolated inconsistencies.

The Plaintiff further submits that the rights issue could not have been for a legitimate purpose because the 1st Defendant had no substantive business. In this regard, reliance is placed on the evidence of the 3rd Defendant that the company had no operations. However, the absence of active business does not, without more, establish that a capital exercise is illegitimate. The Plaintiff has not produced evidence to show that the capitalisation was fictitious or unnecessary.

The legal test for improper purpose is well established. In Howard Smith Ltd (supra), it was held that the power to issue shares must be exercised bona fide in the interests of the company, and not for a collateral purpose such as diluting an existing shareholder. However, the Privy Council also recognised that the primary purpose of a share issue is ordinarily to raise capital. The Court must therefore determine the dominant purpose of the allotment.

On the evidence before this Court, the Plaintiff has not established that the dominant purpose of the allotment was to prejudice him. The existence of advances and the Defendants’ explanation that the exercise was tied to financial arrangements have not been displaced by cogent evidence. The Plaintiff’s case rests on inference rather than proof.

The Court is also guided by Seah Eng Toh Daniel (supra) where the Court held that dilution resulting from a bona fide rights issue does not amount to oppression where shareholders are given the opportunity to participate. While each case must be assessed on its facts, the principle is applicable here. The Plaintiff was aware of the exercise and did not take steps to subscribe. The resulting dilution is therefore not, in itself, evidence of oppression.

Further, in Low Cheng Tek (supra), the Federal Court emphasised that oppression requires conduct that is commercially unfair and results in prejudice to the shareholder in his capacity as a member. The Plaintiff must show more than the fact of dilution; he must demonstrate that the process by which it occurred was unfair in a legal sense. That element has not been established on the evidence.

When these principles are applied to the facts, the Court is not satisfied that the rights issue and allotment were carried out in a manner that is oppressive, in disregard of the Plaintiff’s interests, or unfairly prejudicial. The irregularities identified, while not insignificant, do not, in the absence of proof of bad faith or improper purpose, cross the statutory threshold.

The dilution of the Plaintiff’s shareholding is therefore more properly understood as the consequence of a capital exercise in which he did not participate, rather than as conduct falling within section 346 of Act 777.

This is not a case where the Plaintiff was shut out. The evidence shows that he was aware of the capital exercise and chose not to act. That distinction is important.

3.1.3 The Alleged Share Sale Agreement

The Plaintiff’s case on the alleged Share Sale Agreement depends heavily on the proposition that there was a concluded and enforceable agreement under which the 3rd Defendant was obliged to pay RM3,000,000.00 for the Plaintiff’s shares. In assessing this issue, the Court has given close attention to the evidence of the 3rd Defendant, both in terms of its substance and the manner in which it was given.

The 3rd Defendant’s position, as reflected in his witness statement and oral testimony, is that while discussions did take place between the parties concerning a possible buy-out of the Plaintiff’s interest, those discussions did not culminate in a binding and unconditional agreement in the form alleged by the Plaintiff. Rather, his evidence is that any such understanding was subject to the broader commercial context of the company’s position, including funding arrangements and the restructuring of its affairs.

This position was tested in cross-examination. The Notes of Proceedings record exchanges in which the 3rd Defendant was confronted with the alleged agreement and the asserted obligation to pay RM3,000,000.00. While he acknowledged that discussions took place, he did not accept that a concluded obligation arose in the terms alleged by the Plaintiff. His evidence was that the figure discussed was part of a broader commercial arrangement and not a standalone enforceable commitment divorced from the company’s financial realities.

Importantly, when pressed on the mechanics of the alleged payment, the 3rd Defendant maintained that there was no independent or unconditional obligation triggered in the manner suggested by the Plaintiff. His responses did not shift under cross-examination. Where challenged, he reiterated that any understanding between the parties was tied to the overall commercial restructuring and was not capable of being separated and enforced as a discrete contractual entitlement.

The Court notes that this aspect of his evidence is consistent with the documentary record. There is no contemporaneous correspondence evidencing a demand for payment in the manner one would expect if a binding agreement had crystallised. There is also no documentary trail showing partial payment, instalment arrangements, or enforcement steps taken at the material time. The absence of such documents is not merely neutral; it sits uneasily with the Plaintiff’s assertion that there was a concluded and enforceable agreement of the nature alleged.

The Defendants’ submissions on this issue emphasise that the Plaintiff has failed to establish the existence of a binding contract and that, at most, the evidence discloses negotiations or a conditional understanding. The Court finds that this submission is borne out by the evidence. The Plaintiff has not bridged the evidential gap between discussion and enforceable agreement. In particular, there is no independent corroboration of the alleged terms, and the Plaintiff has not adduced evidence capable of displacing the 3rd Defendant’s account.

In assessing this evidence, the Court also had regard to the demeanour of the 3rd Defendant. His testimony was measured and internally consistent. He did not appear to overstate his position, nor did he attempt to fill gaps in the evidence with speculation. When confronted with propositions put to him, he either accepted them where appropriate or rejected them without hesitation, and his answers remained aligned with the documentary context. This lends weight to the reliability of his account.

Against this, the Plaintiff’s case on the alleged agreement rests largely on assertion and on a document whose authenticity and legal effect have not been satisfactorily established. The Plaintiff did not call any independent witness to the execution of the document, nor did he adduce expert evidence where authenticity was put in issue. In those circumstances, the evidential foundation of the Plaintiff’s case is significantly weaker.

When the evidence is considered as a whole, the Court is not satisfied that the Plaintiff has established that there was a concluded and enforceable Share Sale Agreement giving rise to an unconditional obligation on the part of the 3rd Defendant to pay RM3,000,000.00. At most, the evidence points to discussions or a conditional commercial understanding which did not crystallise into a binding contract in the terms alleged.

This finding is material not only to the Plaintiff’s contractual assertion but also to the wider narrative of oppression. The Plaintiff’s attempt to characterise the subsequent corporate acts as a scheme to avoid payment depends on the premise that such a payment obligation existed. In the absence of proof of that premise, the inference of improper motive is correspondingly weakened.

3.1.4 The SMHSB and BSISB Transactions

The Plaintiff further contends that the transfer of the 1st Defendant’s shares in SMHSB and the capitalisation exercise in BSISB amounted to a stripping of assets from the 1st Defendant, and that these transactions form a central part of the alleged oppressive conduct. This is a serious allegation. It implies not merely irregularity, but a deliberate diversion of value from the company to the detriment of the Plaintiff.

The Court therefore approaches this issue with care and examines the evidence in detail.

The Plaintiff’s case is that the shares in SMHSB, which formed a significant part of the 1st Defendant’s value, were transferred to the 2nd and 3rd Defendants without proper authority and without the knowledge or consent of the Plaintiff. It is further contended that the resolutions relied upon to support this transfer were defective, including the involvement of the 3rd Defendant at a time when his status as a director was in question.

Similarly, in relation to BSISB, the Plaintiff contends that the capitalisation of shares diluted the 1st Defendant’s interest in that subsidiary and that this was effected through reliance on alleged debts which are said to be unsupported by proper evidence.

The Court accepts that questions arise as to the manner in which these transactions were documented. There are deficiencies in the corporate records and inconsistencies in the execution of certain resolutions. These matters are not insignificant. However, the Court must go further and consider whether the Plaintiff has established, on the evidence, that these transactions resulted in conduct that is oppressive, in disregard of his interests, or unfairly prejudicial.

A critical difficulty in the Plaintiff’s case lies in the absence of objective evidence demonstrating the effect of these transactions. The Plaintiff characterises the transfer as “asset stripping”, but no valuation evidence has been produced to show the value of the shares at the time of transfer or to demonstrate that the transaction was carried out at an undervalue. There is no expert evidence analysing the financial consequences of the transfer or establishing that the 1st Defendant was deprived of value in a manner that is commercially unfair.

The Court must emphasise that allegations of asset stripping cannot rest on characterisation alone. They require evidential support. Without valuation evidence, financial analysis, or other objective material, the Court is left with assertion rather than proof.

This is consistent with the principle where it was observed that there is a presumption of regularity in corporate affairs unless displaced by cogent evidence. In the present case, while the Plaintiff has raised concerns as to irregularities, he has not produced evidence sufficient to displace that presumption in relation to the substance of the transactions.

The Court must also consider whether the Plaintiff has demonstrated personal prejudice, as required under section 346 of Act 777. Even if it is assumed that the transactions affected the assets of the 1st Defendant, the Plaintiff must show that he suffered a distinct and identifiable loss as a member.

In this regard, the Court is guided by Dato’ Shabaruddin bin Ibrahim v Dato’ Ruslan Ali Omar & Ors [2020] MLJU 1744, which makes clear that a shareholder cannot rely on losses suffered by the company as the basis of a personal claim unless he establishes a separate and distinct prejudice. A diminution in the value of shares resulting from corporate decisions is, without more, a reflective loss.

In the present case, the Plaintiff has not demonstrated that he suffered a loss distinct from that of the company. His complaint is, in substance, that the value of the company has been affected. That is not sufficient to sustain a claim under section 346 of Act 777.

The Court has also considered the broader context of the transactions. The Defendants’ position is that these transactions formed part of a restructuring of the company’s affairs. While the Plaintiff disputes the justification for such restructuring, the Court cannot, in the absence of evidence of bad faith or improper purpose, substitute its own view for that of those managing the company.

The Plaintiff has not produced evidence showing that the transactions were carried out for a collateral purpose directed at him. Nor has he established that he was treated differently from other shareholders in a manner that is unfair.

When the evidence is considered as a whole, the Court is not satisfied that the Plaintiff has established that the transfer of SMHSB or the restructuring of BSISB constitutes conduct that is oppressive, in disregard of his interests, or unfairly prejudicial within the meaning of section 346 of Act 777.

The Plaintiff’s characterisation of these transactions as “asset stripping”, while forcefully presented, is not supported by the evidential foundation required to sustain such a finding.

3.1.5 Removal and Access to Records

The Plaintiff relies on his removal as a director and the alleged denial of access to corporate records.

The Court has also considered the Plaintiff’s complaint regarding his removal as a director and the alleged denial of access to corporate records. When examined more closely, the substance of the Plaintiff’s grievance appears to be that, following the deterioration of his relationship with the 2nd and 3rd Defendants, he no longer had the same level of involvement in the affairs of the company and was unable to obtain information in the manner he desired. This, in turn, gave rise to his perception that he had been excluded and that the Defendants were acting without transparency.

However, the Court must distinguish between a commercial or relational breakdown and conduct that rises to the level of oppression under section 346 of Act 777. The removal of a director, while capable in certain circumstances of forming part of oppressive conduct, does not by itself establish oppression.

In the present case, the evidence shows that the Plaintiff’s involvement in the day-to-day affairs of the company had already diminished. His own admission that he had ceased attending the office is material in this regard. In those circumstances, the removal must be viewed in context and cannot, without more, be characterised as an act of exclusion in the legal sense contemplated by the statute.

In relation to access to corporate records, the Court accepts that there were disputes between the parties. The Plaintiff’s concern, as reflected in the evidence, is that he was not provided with full information relating to the company’s affairs, including financial and transactional documents.

However, the existence of such disputes does not, in itself, establish oppression. The evidence shows that the Plaintiff was able to obtain documents through legal process and rely on them in these proceedings. More importantly, the law provides specific mechanisms to address such grievances, including statutory rights to inspect records, applications for discovery, and other procedural remedies. These avenues are directed at resolving issues of access and disclosure, and their existence underscores that not every dispute over information amounts to oppressive conduct.

Viewed in this light, the Plaintiff’s complaint is more accurately understood as a dispute over access and control of information arising from a breakdown in the parties’ relationship, rather than conduct that is commercially unfair or lacking in probity. The Plaintiff has not demonstrated that the Defendants’ conduct in this regard resulted in prejudice of the nature required to engage section 346.

The Plaintiff has not established that he had a legal right to remain as a director. His own evidence shows that he had ceased active involvement in the company. In such circumstances, the removal does not, without more, support a finding of oppression.

In relation to access to records, the evidence shows that the Plaintiff was able to obtain documents and rely on them in these proceedings. The Plaintiff has not demonstrated that any denial resulted in prejudice sufficient to engage the Court’s jurisdiction.

4.1

The Plaintiff invites the Court to consider the cumulative effect of the acts complained of. The Court accepts that oppression may arise from a series of acts. However, the assessment must be grounded in evidence.

Looking at the matter as a whole, the Court do not find that what occurred can properly be characterised as oppression. The Plaintiff’s complaints, taken at their highest, reflects a breakdown in the relationship between the parties and dissatisfaction with the outcome of corporate decisions. That, however, is not the same as oppressions within the ambit of section 346 of Act 777.

Having considered the evidence in its entirety, the Court is not satisfied that the Plaintiff has established that the affairs of the 1st Defendant were conducted in a manner that is oppressive, in disregard of his interests, or unfairly prejudicial within the meaning of section 346 of Act 777.

5.1

Having considered the entirety of the evidence, both oral and documentary, together with the submissions of the parties, and having applied the principles governing claims under section 346 of the Companies Act 2016, the Court is not persuaded that the Plaintiff has established a case that warrants intervention.

The Plaintiff’s case is premised on the assertion that a series of corporate acts resulted in the effective erosion of his interest in the 1st Defendant and that such acts, taken cumulatively, constitute oppression. However, when the evidence is examined closely, the Court is unable to accept that characterisation.

The Court has found that the Plaintiff has not established that he possessed a substantive beneficial interest in the shares of the 1st Defendant. His own admission that he did not pay for the shares, coupled with the absence of documentary proof of consideration, remains unexplained. This is not a peripheral matter. It goes to the foundation of the Plaintiff’s claim, which is premised on prejudice to his interest as a member.

The Court has further found that the dilution of the Plaintiff’s shareholding arose in the context of a capital exercise of which the Plaintiff was aware and in respect of which he did not take steps to participate. The evidence does not support the conclusion that the process was engineered to exclude him. Rather, it demonstrates that the Plaintiff did not act upon the opportunity available to him. In those circumstances, the resulting dilution cannot be characterised as oppressive.

In relation to the alleged Share Sale Agreement and the claimed entitlement to RM3,000,000.00, the Plaintiff has failed to establish the existence of an enforceable obligation. The evidential basis of the agreement is insufficient, and the Plaintiff’s own evidence does not support the conclusion that he was entitled to receive such consideration. The Court has accepted the evidence of the 3rd Defendant on this issue, having regard to his consistency and demeanour during cross-examination, as well as the alignment of his account with the surrounding circumstances.

The Plaintiff’s complaints regarding the transfer of and the restructuring of BSISB similarly do not meet the threshold required under section 346. While questions were raised regarding the manner in which certain corporate steps were taken, the Plaintiff has not produced cogent evidence to demonstrate that those transactions resulted in actual loss or were carried out in bad faith. Nor has he established that any such loss is personal to him as distinct from the company.

The Court has also considered the Plaintiff’s removal as a director and the alleged denial of access to corporate records. These matters, viewed in context, do not support the inference of oppressive conduct. The Plaintiff’s own evidence indicates that he was no longer actively involved in the company’s operations, and the material before the Court does not demonstrate that he was excluded in a manner that engages the statutory remedy.

When all the matters are considered together, what emerges is a deterioration in the commercial relationship between the parties. While such breakdown may give rise to dissatisfaction or dispute, it does not, without more, constitute oppression within the meaning of section 346. The statutory remedy is not intended to redress every disagreement or adverse outcome arising from corporate decisions, but is reserved for conduct that is unfair in a legal sense and results in identifiable prejudice.

In the present case, the Plaintiff has not discharged the burden of proving that the affairs of the 1st Defendant were conducted in a manner that is oppressive, in disregard of his interests, or otherwise unfairly prejudicial. The claim when examined against the evidence, cannot be sustained.

6.1

The Plaintiff’s claim is dismissed in its entirety.

Costs of RM 20,000.00 are awarded to the Defendants. Dated 31 May 2026 -sgd-ANITA BINTI HARUN JUDICIAL COMMISSIONER HIGH COURT OF MALAYA SHAH ALAM SELANGOR DARUL EHSAN To the parties’ solicitors: For the Plaintiff : Teoh Bi Shan & Chiam Fui Ting (Messrs Bishan & Partners) For the Defendants : Cheah Sau Voon (Messrs KH Wong, Chin & Cheah)