Mah Yuen Shi v 1. ) Wong Koon Hung (WA-24NCC-831-08/2022)

WONG KOON HUNG (No. K/P: 520606-10-5691)

WONG KIEN CHOONG (No. K/P: 911011-14-5617)

MAK CHOOI PENG (No. K/P: 700621-10-5268)

MASERA REALTY SDN BHD … DEFENDAN - [No. Syarikat: 201001019806 (903516-U)] DEFENDAN

This was an application via Originating Summons (Enclosure 1) by the Plaintiff, a 40% minority shareholder of the 4th Defendant, Masera Realty Sdn. Bhd., under Section 346 of the Companies Act 2016 alleging oppressive conduct by the majority shareholder, the 1st Defendant, acting in concert with the 2nd and 3rd Defendants.

The Plaintiff claims the 1st Defendant, holding 60% of the shares, unlawfully appointed the 2nd Defendant as director and the 3rd Defendant as company secretary via a Members’ Written Resolution dated 20.7.2022, contrary to the Articles of Page 3 of 20 Association and statutory provisions. These acts, together with other conduct, are said to marginalise the Plaintiff and disregard her rights as a minority member.

By Notice of Application dated 8.8.2022 (Enclosure 2), the Plaintiff sought an interim injunction to preserve the status quo of the Company’s management and assets until the disposal of Enclosure 1. The following day, 9.8.2022, an ad interim injunction was granted, restraining the Defendants from holding the Board of Directors’ meeting scheduled for 11.8.2022 and from making any alterations to the Company’s shares, assets, or finances without the Plaintiff’s written consent or a further Order from the Court.

Both Enclosures 1 and 2 were heard together. A]

The 4th Defendant (“the Company”), was incorporated on 7.6.2010 with the Plaintiff and 1st Defendant as its only directors and shareholders. The 1st Defendant holds 60% majority shares whilst the Plaintiff holds 40% minority shares in the Company.

Since incorporation of the Company, the 1st Defendant was appointed as chairman of the Company’s meetings, sole signatory to the Company’s bank accounts and authorised to receive balance sales proceeds of RM15.75 million on behalf Page 4 of 20 of the Company. These arrangements were agreed via resolutions signed by the Plaintiff.

On 19.7.2022, the 1st Defendant circulated a Members’ Written Resolution dated 20.7.2022 to appoint his son, the 2nd Defendant, as an additional director and the 3rd Defendant, Mak Chooi Peng, as the Company secretary, without convening any members’ general meeting.

The Members’ Written Resolution itself bears the date of 20.7.2022, which was one day after it was circulated on 19.7.2022. On 20.7.2022, the 1st Defendant, as the 60% majority shareholder, approved the Members’ Written Resolution and the appointments were immediately filed and effected with the Companies Commission of Malaysia (CCM) on the same day (refer to the CCM search at pages 125-130 of Enclosure 3). The appointments of the 2nd and 3rd Defendants as director and company secretary respectively were thus completed within this one-day period from 19.7.2022 to 20.7.2022.

The Plaintiff filed the present Originating Summons on 8.8.2022 seeking, inter alia, orders to declare the appointments of the 2nd and 3rd Defendants invalid, null and void, and for the Company’s records to be rectified accordingly. Page 5 of 20 B]

The Plaintiff contended that the appointments of the 2nd and 3rd Defendants were unlawful and oppressive as they contravened Article 67 of the Company’s Articles of Association and Section 302(2)(a) of the Companies Act 2016.

The Plaintiff submitted that Article 67 of the Articles of Association specifically requires any appointment of an additional director to be “by ordinary resolution passed at a general meeting”.

The Plaintiff argued that Section 302(2)(a) of the Companies Act 2016 provides that any resolution may properly be moved as a written resolution unless the resolution “if passed, would be ineffective whether by reason of inconsistency with any written law or the constitution”.

The Plaintiff relied on the High Court decision in Mohd Radwan Alami v. Ibrahim bin Mohd Yusof & Ors [2019] 10 MLJ 761, where the Court held that under Article 67 of the Articles of Association (Table A), any appointment of an additional director must be done by way of a general meeting of members and that a members’ written resolution appointing an additional director was ineffective, null and void pursuant to Section 302(2)(a) of the Companies Act 2016.

The Plaintiff further contended that the 1st Defendant’s conduct constituted an escalation of a series of oppressive and discriminatory acts that amounted to a serious departure and violation of the standards of fair dealing in the Company, relying on Owen Sim Liang Khui v. Piasau Jaya Sdn Bhd & Anor [1996] 1 MLJ 113. C]

The 1st, 2nd and 4th Defendants argued that the appointments were valid under Sections 202 and 290 of the Companies Act 2016, which allow directors to be appointed by ordinary resolution, including written resolutions.

The Defendants relied on Mohamed Zahid Yon Mohamed Fuad v. Jason Jonathan Lo & Ors [2019] MLRHU 247, where the High Court held that a majority shareholder with 60% shareholding could validly sign a written resolution appointing an additional director.

The Defendants contended that Section 32(2) of the Companies Act 2016 provides that the constitution of a company has no effect to the extent that it contravenes or is inconsistent with the provisions of the Act, arguing that Article 67 was inconsistent with Sections 202 and 290 of the Companies Act 2016.

Regarding the appointment of the 3rd Defendant as company secretary, the Defendants argued that the Company had been without a secretary since 17.10.2016 and was in breach of Section 235(1) of the Companies Act 2016. D] THE PRINCIPLES APPLICABLE TO MINORITY

The jurisdiction to grant relief in cases of minority oppression is found in Section 346 of the Companies Act 2016, which provides that any member of a company may apply to the Court for an order if the affairs of the company are being conducted in a manner that is oppressive to one or more members or in disregard of their interests as members.

In Re Kong Thai Sawmill (Miri) Sdn Bhd & Ors v. King Beng Sung [1978] 2 MLJ 227, the Privy Council speaking through Lord Wilberforce explained what oppression means under section 181 of the Companies Act 965 (which is in pari materia with Section 346 CA 2016) as follows: “Secondly, for the case to be brought within section 181(l)(a) at all, the complaint must identify and prove "oppression" or "disregard". The mere fact that one or more of those managing the company possess a majority of the voting power and, in reliance upon that power, make policy or executive decisions, with which the complainant does not agree, is not enough. Those who take interests in companies limited by shares have to accept majority rule. It is only when majority rule passes over Page 8 of 20 into rule oppressive of the minority, or in disregard of their interests, that the section can be invoked. As was said in a decision upon the United Kingdom section there must be a visible departure from the standards of fair dealing and a violation of the conditions of fair play which a shareholder is entitled to expect before a case of oppression can be made (Elder v Elder & Watson Ltd 1952 SC 49): their Lordships would place the emphasis on "visible". And similarly "disregard" involves something more than a failure to take account of the minority's interest: there must be awareness of that interest and an evident decision to override it or brush it aside or to set at naught the proper company procedure (per Lord Clyde in Thompson v Drysdale 1925 SC 311 315). Neither "oppression" nor "disregard" need be shown by a use of the majority's voting power to vote down the minority: either may be demonstrated by a course of conduct which in some identifiable respect, or at an identifiable point in time, can be held to have crossed the line.” (own emphasis added)

As established in Owen Sim (supra), oppression must be considered as part of a consecutive story and not in isolation. The Federal Court held that events complained of must be examined collectively to determine whether they constitute oppression. E]

The central issue in this case concerns whether the appointments of the 2nd and 3rd Defendants via Members’ Written Resolution dated 20.7.2022 were valid and lawful.

Article 67 of the Company’s Articles of Association clearly states: “67. The company may from time to time by ordinary resolution passed at a general meeting increase or reduce the number of directors, and may also determine in what rotation the increased or reduced number is to go out of office.” (own emphasis added)

This provision unambiguously requires that any appointment of additional directors must be done at a general meeting. The use of the phrase “passed at a general meeting” is mandatory and provides no alternative method for such appointments.

Section 302(2)(a) of the Companies Act 2016 supports this interpretation by providing that any resolution may properly be moved as a written resolution unless the resolution “if passed, would be ineffective whether by reason of inconsistency with any written law or the constitution”.

I find the decision in Mohd Radwan Alami (supra) to be directly on point. In that case, which involved similar facts with a 60% majority shareholder attempting to appoint an additional director against the wishes of a 40% minority shareholder, the High Court specifically considered Article 67 and Section 302(2)(a) of the Companies Act 2016 and held that any appointment of additional directors must be by way of a general meeting and cannot be done by way of a members’ written resolution.

The Defendants’ reliance on Mohamed Zahid (supra) is misplaced. Article 67 of the Articles of Association and Section 302(2)(a) of the Companies Act 2016 were not raised in that case and were not considered by the Court.

The Defendants’ argument that Article 67 is overridden by Sections 202 and 290 of the Companies Act 2016 through the operation of Section 32(2) is not sustainable. Section 32(2) only renders constitutional provisions ineffective where they contravene or are inconsistent with the Act. Here, Article 67 is not inconsistent with the Companies Act 2016 but rather provides a specific procedure that must be followed for the appointment of additional directors.

The Court in Mohd Radwan Alami (supra) specifically considered Sections 202, 290 and 32(2) of the Companies Act 2016 and concluded that these provisions do not support the contention that the appointment of directors can be done by way of a written resolution where the Articles of Association require a general meeting. F] APPOINTMENT OF THE 3RD DEFENDANT AS COMPANY

Regarding the appointment of the 3rd Defendant as company secretary, the evidence shows that this appointment was also Page 11 of 20 made via the same Members’ Written Resolution dated 20.7.2022.

The 3rd Defendant’s appointment as Company Secretary through a Members’ Written Resolution violates Sections 211, 236, and 302(2)(a) of the Companies Act 2016, as well as Article 95 of the Company’s Articles of Association. These provisions state that the Board of Directors, not the members, should appoint the Company Secretary. This appointment is therefore unfair and oppressive to the Plaintiff.

Article 95 of the Company’s Articles of Association provides as follows: “95. The secretary shall in accordance with the Act be appointed by the directors for such term, at such remuneration, and upon such conditions as they may think fit; and any secretary so appointed may be removed by them.” (own emphasis added)

Section 236(1) of the Companies Act 2016 states as follows: “The Board shall appoint a secretary and determine the terms and conditions of such appointment.” (own emphasis added)

The appointment of a company secretary is a function of the Board of Directors, not the members. The purported appointment via a members’ written resolution is therefore invalid and unlawful.

The 1st Defendant’s attempt to subsequently seek ratification of this appointment in the Notice of Board of Directors’ Meeting dated 2.8.2022 cannot cure the initial invalidity, particularly when the Board would include the invalidly appointed 2nd Defendant. G]

I find that the 1st Defendant’s unilateral actions in appointing the 2nd and 3rd Defendants without following the proper procedures constitute oppressive conduct towards the Plaintiff as a minority shareholder.

As held in Re H. R. Harmer Ltd (1958) 3 All ER 689, shareholders are entitled to have the affairs of the Company conducted in the way laid down in the Company’s constitution.

I find that the manner in which the 1st Defendant bulldozed through the appointments of his son, the 2nd Defendant, and 3rd Defendant were particularly egregious. The 1st Defendant circumvented the requirement for a general meeting by unilaterally preparing and circulating a Members’ Written Resolution on 19.7.2022, purportedly on behalf of the Page 13 of 20 Company, without prior notice to or consultation with the Plaintiff. Within less than a day, on 20.7.2022, the 1st Defendant hastily passed the Resolution, demonstrating a reckless disregard for proper deliberation and due process. The signed resolution was only produced for the first time more than a month later on 2.9.2022, after this proceeding was filed. This bulldozing approach, executed in deliberate disregard of proper corporate procedures, demonstrates a complete disregard for the principles of corporate governance and the rights of minority shareholders (Re Kong Thai (supra)).

The 1st Defendant’s deliberate breach of Article 67 of the Articles of Association, despite the Plaintiff’s query dated 8.6.2022 regarding the need to appoint the 2nd Defendant, demonstrates a blatant disregard for the Plaintiff’s rights as a member.

The Defendants’ failure to provide the Plaintiff with documents and information relating to the appointments, as required under Lai Ban Guan v. Lai Yeow Choo & Satu Lagi [2016] 1 LNS 32, constitutes further oppressive conduct.

The Defendants have systematically refused to furnish the Plaintiff with essential company documents and information, in a calculated effort to exclude her from the management and affairs of the company. This refusal goes beyond matters relating to the appointments and includes denial of access to financial records, board resolutions, and other documents to Page 14 of 20 which the Plaintiff is lawfully entitled as a director and/or shareholder. Such conduct not only impedes the Plaintiff’s ability to perform her duties as a director, but also frustrates the exercise of her rights as a member, amounting to further acts of oppression.

Following the principle in Owen Sim (supra), these acts must be viewed as part of a continuous series or pattern of oppressive conduct that has seriously prejudiced the Plaintiff’s interests as a minority shareholder.

Beyond the unlawful appointments, I further find that the 1st to 3rd Defendants obtained majority control of the Board of Directors for collateral purposes and personal agenda, in complete disregard of the Plaintiff’s interests as a minority shareholder. The evidence demonstrates that these appointments were not made in the genuine interests of the Company but to advance the Defendants’ own ulterior motives.

The conduct of the 1st Defendant in respect of previous court proceedings constitutes further oppressive behaviour. The background to these proceedings involves the 1st Defendant filing a winding up petition against Delta Park Sdn Bhd on 27.4.2021, with a private liquidator being appointed on 14.10.2021. In the subsequent Winding Up Termination Proceedings (Post Winding Up No. WA-28PW-107-02/2022) (“PW 107 Application”) filed by Camas Services Sdn Bhd, a company owned by the wife of Lee Keok Hooi (“LKH”), who is Page 15 of 20 said to be the ultimate beneficial owner of the 1st Defendant’s shares, the High Court made serious findings against, inter alia, the 1st Defendant (as the Petitioner). These can be seen from the following passages from the High Court’s Grounds of Judgment in the PW 107 Application: “22. Based on all of the above I hold that the Petitioner knew at all material times of the true effect and orders given in the Suit 660 Judgment but that he had intentionally and dishonestly concealed the said true facts from the Court hearing the Petition. The Petition and the subsequent orders emanating from it are therefore a blatant abuse of court process and void ab initio. …..” “23. I also hold that from the facts before this Court, that OKK had intended by his actions of filing the Petition purportedly as solicitor for the Petitioner, acted in a manner not for the purpose of obtaining the relief so claimed but for the collateral purpose of preventing the Company from recovering a judgment of RM1,572,000 from OKK of which OKK is personally liable to the Company under the judgment dated 24.2.2017 obtained against OKK (OKK Judgment) by the Company vide Suit No. 22NCVC-326- 07/2014 as seen in exhibit LSK-6 of enclosure 2 herein and which remains unpaid to date. Such an act is of course highly mischievous, irregular and improper. It cannot be anything less than a wrong in law.” ……. Page 16 of 20 “25. From all of the above findings, it is clear that Masera cannot be described as an Applicant or the Petitioner and that these in itself are again a serious case of misleading the Court. This Court therefore agrees with counsel for the Applicant that:

it appears that the Liquidator is being used as a tool by certain parties to advance their own ulterior motives;

(ii) the actions by the Petitioner and/or OKK are premeditated for their own collateral purposes;

(iii) the Company has been unable to recover the OKK Judgment from OKK as OKK has used the Winding Up Order and the Petition to stifle the Company’s bankruptcy proceedings against OKK as shown in exhibit LKS-7 of enclosure 2.” (own emphasis added)

The attempted Board meeting on 11.8.2022, including the proposed ratification of the 3rd Defendant’s appointment as company secretary and the resolution granting the 1st Defendant sole discretion to appoint solicitors, was pursued in bad faith to cover prior wrongdoing and to improperly exert control over the Company’s affairs.

These oppressive acts, when viewed together with the unlawful appointments, form part of a continuous course of oppression as contemplated in Owen Sim (supra), Page 17 of 20 demonstrating a systematic pattern of conduct designed to marginalise the Plaintiff’s position in the Company. H]

Based on the above, I find that the acts of the 1st Defendant (together with the 2nd and 3rd Defendants) constitute “a visible departure from the standards of fair dealing and a violation of the conditions of fair play which a shareholder is entitled to expect” as held in Re Kong Thai (supra).

Hence, the Plaintiff has made out a case of oppression against the Defendants under Section 346 of the Companies Act 2016.

In the circumstances, this Originating Summons (Enclosure 1) is allowed, and the following orders were essentially granted: i) The Members’ Written Resolution dated 20.7.2022 (circulated on 19.7.2022), appointing the 2nd Defendant as an additional director and the 3rd Defendant as company secretary, is invalid, null and void, and is accordingly set aside and cancelled; ii) The appointment of the 2nd Defendant as an additional director of the Company is invalid, null and void, and is accordingly set aside and cancelled; Page 18 of 20 iii) The appointment of the 3rd Defendant as company secretary of the Company is invalid, null and void, and is accordingly set aside and cancelled; iv) The Company’s records, including the Register of Directors, the Register of Secretaries, and the records filed with the Companies Commission of Malaysia, be forthwith rectified and/or amended to remove the 2nd Defendant as director and the 3rd Defendant as company secretary; and v) The 1st, 2nd, and 3rd Defendants are to pay costs of RM15,000 to the Plaintiff (subject to allocator).

The Plaintiff’s Notice of Application dated 8.8.2022 (Enclosure 2) is accordingly allowed upon the same terms as Ad Interim Order dated 9.8.2022 (Enclosure 20). Dated this 12th day of August, 2025 -SGD- (WAN MUHAMMAD AMIN BIN WAN YAHYA) JUDGE HIGH COURT OF MALAYA, (COMMERCIAL DIVISION (NCC 3)) HIGH COURT OF KUALA LUMPUR IN THE FEDERAL TERRITORY, MALAYSIA Page 19 of 20 PLAINTIFF : Yee Mei Ken (Lee See Loon and Mattheus Goon together with him) Messrs Lee, Oliver & Gan Block A-5-5, Level 7, Menara Uncang Emas (UE3), No. 85, Jalan Loke Yew, 55200 Kuala Lumpur Tel: 03-92823716/8 Emel: sllee@leeolivergan.com 1ST, 2ND AND 4TH DEFENDANTS : Ong Keh Keong Messrs Hakim Abdul Wahid & Co. No. 9A, Jalan SS 15/2A, 47500 Subang Jaya, Selangor Tel: 03-56361171 / 017-6126588 Emel: legal_hawc@yahoo.com 3RD DEFENDANT : Ong Keh Keong (mentioning on behalf) Messrs Syed Muhamad Akhyari Suite B-06-12, 6th Floor, Plaza Mont Kiara, No. 2 Jalan Kiara, 50480 Kuala Lumpur Tel: 013-4433572 Emel: syedahmadalbab@gmail.com LEGISLATION / RULES CITED Companies Act 2016 ▪ Section 32(2) ▪ section 181 Page 20 of 20 ▪ Section 202 ▪ Section 211 ▪ Section 235(1) ▪ Section 236 ▪ Section 290 ▪ Section 302(2)(a) ▪ Section 346

Lai Ban Guan v. Lai Yeow Choo & Satu Lagi [2016] 1 LNS 32

Mohd Radwan Alami v. Ibrahim bin Mohd Yusof & Ors [2019] 10

Mohamed Zahid Yon Mohamed Fuad v. Jason Jonathan Lo &

Owen Sim Liang Khui v. Piasau Jaya Sdn Bhd & Anor [1996] 1

Re Kong Thai Sawmill (Miri) Sdn Bhd & Ors v. King Beng Sung [1978] 2 MLJ 227

Re H. R. Harmer Ltd (1958) 3 All ER 689