Pang Cheng Chaw v Goh Teck Sin (JA-24NCC-16-03/2026)

GOH TECK SIN [NRIC NO. : 730516-10-5343]

CTS SOLUTIONS MARKETING SDN BHD [COMPANY NO. : 201901022427 / 1331756-X]

CHOO JIE SHENG [NRIC NO. : 001109-01-1681]

ISOMETRIC PRECAST SDN BHD [COMPANY NO. : 202501011814 / 1613228-M] …DEFENDANTS GROUNDS OF JUDGMENT

By the Originating Summons in Enclosure 1, the Plaintiff, who holds 30% of the issued shares in the Second Defendant company, seeks relief for minority oppression under section 346 of the Companies Act 2016 [Act 777]. He asks for –

a declaration of oppression;

an order that the First Defendant buy his shares at a fair value to be fixed by an independent auditor, with directions that the valuation add back profits said to have been diverted to the Fourth Defendant, management fees paid to a Singapore company and certain related-party transactions;

that the purchase be conditional on the discharge of his personal guarantees;

a declaration that the Third and Fourth Defendants hold diverted assets and profits on constructive trust for the Second Defendant, an account of profits;

an injunction restraining competition and solicitation, an indemnity from the First Defendant pending discharge of the guarantees; and

the appointment of a forensic auditor at the First Defendant's cost.

At the hearing, counsel for the Defendants indicated that the Plaintiff's reply submissions in Enclosure 24 had not been served on her. I allowed her to reply to them orally, which she did and I have taken that oral reply into account.

The Second Defendant, CTS Solutions Marketing Sdn Bhd, was incorporated on 26 June 2019 and trades in steel welded mesh and related construction materials. Its issued capital is RM600,000.00. The First Defendant holds 70% and is its sole director. The Plaintiff holds 30%. The Plaintiff was also employed by the Second Defendant until his employment was terminated on 28 October 2025. He is, in addition, a 30% shareholder of CTS Solutions Supplies Pte Ltd, a Singapore company in which the First Defendant holds the remaining 70% and which is the subject of separate proceedings brought by the Plaintiff in Singapore.

The Plaintiff’s complaint is put as three connected “schemes” –

first, that his termination was a sham designed to exclude him from the company;

secondly, that the First Defendant siphoned the company’s profits to the Singapore company through management fees and an inter-company loan; and

thirdly, that the company’s reinforcement bar business was diverted to the Fourth Defendant, a company incorporated by the Third Defendant. 6 5. The Defendants deny each allegation and say that –

the Plaintiff was an employee and shareholder rather than a quasi-partner;

the termination is an employment matter pending pending in the statutory dismissal process the Plaintiff himself initiated (Industrial Court);

the impugned transactions were genuine, documented and disclosed; and

the Plaintiff has himself set up competing companies which he did not disclose.

This is an application by originating summons, to be determined on affidavit evidence. That mode is appropriate where the material facts are not seriously in dispute. Here they are. The parties are in direct and credible conflict on every matter that counts –

whether the Plaintiff absconded or was excluded;

whether the management fees and the inter-company loan were genuine or a sham;

whether the purchase order to the Fourth Defendant reflected a bona fide commercial decision or a fraudulent diversion; and

whether the Plaintiff's own companies are dormant or competing.

Several of these allegations are advanced as fraud, sham and conspiracy.

The burden of establishing oppression lies on the Plaintiff and it is not discharged by suspicion or by pointing to a deficiency in the accounts. [See : Pan-Pacific Construction Holdings Sdn Bhd v. Ngiu-Kee Corporation (M) Bhd & Anor [2010] 6 CLJ 721]. Where the existence of a quasi-partnership is credibly denied on affidavit and the company has on its face been run in accordance with its constitution, the court should not decide that question on disputed facts in the claimant’s favour. [See : Yai Yen Hon & Ors v Lim Mong Sam @ Lim Ah Tee [1997] 2 MLJ 190]. Allegations of fraud and conspiracy require cogent proof and the elements of conspiracy in particular must be made out. [See : Renault SA v Inokom Corp Sdn Bhd & Anor and other appeals [2010] 5 MLJ 394] and directly conflicting affidavits do not supply that proof.

The Plaintiff chose this procedure. The matter therefore falls to be decided on the affidavit record. Where the competing accounts cannot be resolved on that record, the burden of proof is decisive. But where, as with the foundation of the relationship, the documents and the Plaintiff's own evidence determine the matter, I decide it on that footing. ANALYSIS The legal principles

Section 346 of Act 777 confers a wide remedial power. On proof that the affairs of the company are being conducted, or the directors’ powers exercised, oppressively or in disregard of a member’s interests, or that an act or resolution unfairly discriminates against or is prejudicial to a member, the court may make such order as it thinks fit to bring the matters complained of to an end and is not confined to the reliefs listed in the section or to those sought. [See : Auspicious Journey Sdn Bhd v Ebony Ritz Sdn Bhd & Ors [2021] 3 MLJ 549].

The threshold to engage that power is exacting. There must be a visible departure from the standards of fair dealing and a violation of the conditions of fair play that a shareholder is entitled to expect. “Disregard” requires an awareness of the member’s interest and an evident decision to override it. The test is objective and a shareholder accepts majority rule as part of his bargain. [See : Re Kong Thai Sawmill (Miri) Sdn Bhd; Kong Thai Sawmill (Miri) Sdn Bhd & Ors v Ling Beng Sung [1978] 2 MLJ 227]. Where the company is in substance a quasi-partnership, equity may subject the majority’s strict legal powers to equitable constraints. [See : Ebrahimi v Westbourne Galleries Ltd [1973] AC 360, adopted in Jet-Tech Materials Sdn Bhd & Anor v. Yushiro Chemical Industry Co Ltd & Another Appeal [2013] 2 CLJ 277]. Contributions of capital and the assumption of liability for the company’s debts are relevant indicia of such a relationship. [See : Tay Bok Choon v Tahansan Sdn Bhd [1987] 1 MLJ 433].

Two limiting principles also apply. The complaint must concern the affairs of the company in question, a grievance that is in substance a personal dispute, or that concerns a different company, does not engage the section. And a member cannot ordinarily recover for a diminution in the value of his shares which merely reflects a loss suffered by the company, for that is the company’s loss.

The first of these principles has recently been affirmed at the Federal Court. In ISM Sdn Bhd v. Queensway Nominees (Asing) Sdn Bhd & Ors and another appeal [2026] 5 CLJ 343, the Federal Court held that both limbs of the oppression provision are directed at the affairs of the company and that a grievance which is in truth a private matter between shareholders, such as a dispute over the disposal or valuation of shares, does not relate to the company's affairs and cannot ground relief under the section. That distinction applies directly here, where much of what is complained of concerns the Plaintiff's employment, his proposed exit and the affairs of a separate Singapore company in which he is himself a shareholder.

A third matter should be noted at the outset, as it bears on more than one of the schemes. Part of the Plaintiff's case and the third of his issues for determination, is put as a breach by the First Defendant of his statutory duties as a director, i.e. the duty under section 213 of Act 777 to exercise his powers for a proper purpose and in good faith in the best interest of the company and the prohibition in section 218 of Act 777 against the improper use of the company's property, position or opportunity, or competition with it. (The originating process also invokes section 217 of Act 777). Duties of that character are owed by the director to the company. Their breach founds a claim by the company, or a statutory derivative action brought with leave on its behalf under section 347 of Act 777 and sounds in relief that ensures to the company. It does not, of itself, convert into a personal remedy for the member under section 346 of Act 777, save where the same conduct independently works an unfairness to him in his capacity as a member. I keep that distinction in mind in addressing Schemes II and III in which the statutory-duty complaints are principally advanced. Issue 1 : Whether a quasi-partnership existed

The Plaintiff relies on –

the authorities, capable of supporting a quasi-partnership;

a long prior association with the First Defendant dating from their employment together in Singapore;

a cash contribution of RM190,000.00 to the company in its early period, joint and several personal guarantees of about RM1.55 million together with a charge over his personal property; and

an active operational role.

I do not discount these matters. The assumption of personal liability of that order is not the usual incident of mere employment. [See : Tay Bok Choon v Tahansan Sdn Bhd [1987] 1 MLJ 433].

The difficulty for the Plaintiff is that his own account of how the relationship began is not borne out by the contemporaneous record, including his own evidence.

In his supporting affidavit he swears that the company was incorporated jointly by himself and the First Defendant on 26 June 2019, with the shareholding divided 70:30 from the outset. The statutory records show otherwise. The First Defendant was the sole shareholder of the company from its incorporation on 26 June 2019 until 29 March 2021 and the Plaintiff was allotted his 30% only on 30 March 2021, some twenty-one months after incorporation. The Plaintiff himself confirms this in his affidavit in reply, where he states that he injected the RM190,000.00 before his name was entered in the register of members. On his own evidence, therefore, he was not a member at incorporation and the company was not jointly formed on a 70:30 basis as his supporting affidavit asserts. The remaining contemporaneous documents point the same way : the Plaintiff was appointed to the company by a letter of appointment dated 1 December 2019 as “Business Development Manager”, a document he accepted and acted upon, the First Defendant was the sole director throughout and the statutory filings, the CTOS report and the company’s resolutions are consistent with his having taken the commercial decisions and there is no shareholders’ agreement, declaration of trust or partnership agreement. Much of the Plaintiff’s “equal partner” material in reply, the 2022–2023 instructions to the company secretary concerning capital and a 70:30 split, concerns the Singapore company, not the affairs of the Second Defendant.

In support of the quasi‑partnership the Plaintiff relies in particular on Tay Bok Choon v Tahansan Sdn Bhd [1987] 1 MLJ 433 and on my own decision in Soon Lai Tiong v Lim Tian Fei & Ors [2026] 9 MLJ

He says that his contribution of capital and his assumption of liability for the company's debts mirror the indicia that the Privy Council in Tay Bok Choon treated as pointing to an implied right to participate in management and that, as in Soon Lai Tiong, the company was in substance run on an informal, trust‑based footing in which he was directly involved in its daily operations. The Defendants distinguish both authorities. I deal with each.

As to Tay Bok Choon, I accept that the contribution of further capital and the assumption of personal liability for a company's debts are matters capable of evidencing a relationship that goes beyond mere shareholding or employment and I have already given weight to the Plaintiff's RM190,000.00 and to his guarantees of some RM1.55 million on that footing. But those indicia were not treated as conclusive and they do not operate in a vacuum. In Tay Bok Choon the petitioner contributed his further capital after he had become a shareholder, so that it was an incident of an existing participation. Here, on the Plaintiff's own evidence in reply, the RM190,000.00 was injected before he was entered in the register of members and his shares were allotted twenty‑one months after incorporation, against a documented background of sole directorship, a formal letter of appointment and the absence of any shareholders' agreement. In that setting the same indicia are equivocal : they are as consistent with an investor who later took up equity as with a partner from inception. Tay Bok Choon is, in any event, the leading authority on how a case of this kind is to be proved when it is brought on affidavit : the party asserting the relationship must prove it, bare assertion contradicted by the contemporaneous record will not do and where a real and unresolved conflict exists the party bearing the burden must ordinarily seek cross‑examination or a trial of the issue or else fail. The Plaintiff has done neither and his sworn account of a joint incorporation on a 70:30 basis is contradicted by the statutory record and by his own affidavit in reply. So understood, Tay Bok Choon does not advance the Plaintiff's case on these facts.

Soon Lai Tiong is distinguishable on its facts. That was a company incorporated by four participants who were, from the outset, directors holding equal 25% shares and who collectively ran the business in an informal manner, it was undisputed there that the company had been operated on the basis of mutual trust and informal arrangements and the finding of a quasi‑partnership rested on that admitted parity of stake, common directorship and shared participation from inception. The oppression found in that case turned on a specific and documented act, i.e. a notice that curtailed the plaintiff's statutory rights of access to the company's records in his capacity as a director, together with his exclusion from an enterprise in which he had always participated as an equal. None of those features is present here. The Plaintiff was never a director of the Second Defendant, the First Defendant was its sole director throughout. The shareholding was not equal but 70:30 and the Plaintiff did not hold it from inception but acquired it twenty‑one months after incorporation. And the informal, trust‑based mode of operation that was common ground in Soon Lai Tiong is, in this case, squarely in dispute and is contradicted by the contemporaneous record. The very matters that made that company a quasi‑partnership and that gave the plaintiff there the statutory foothold on which the oppression was found, are therefore absent. Soon Lai Tiong does not assist the Plaintiff.

Weighing the indicia relied upon against this documented chronology, I am not satisfied that a quasi-partnership has been established. The early capital and the personal guarantees are consistent with an investor who later acquired equity as much as with a partner from inception and they cannot outweigh the contemporaneous record of incorporation, sole shareholding, later allotment and employment. The more so where the Plaintiff’s own sworn account of how the relationship began is contradicted by that record and by his own reply. This is not a case in which the existence of the equitable relationship is left evenly balanced on the affidavits and simply cannot be resolved, it is a case in which the party bearing the burden has not made it out. Insofar as any residual conflict on this issue might be said to remain, it is not such as to require a trial on oral evidence and neither party has applied to cross-examine the deponents or for the matter to proceed as if begun by writ. Following Yai Yen Hon & Ors v Lim Mong Sam @ Lim Ah Tee [1997] 2 MLJ 190, where a company has on its face been run in accordance with its constitution and a quasi-partnership is credibly denied, the court should not find the relationship established on disputed affidavits in the claimant’s favour. The Plaintiff’s exclusion case, which depends on first establishing the equitable bargain said to have been broken, falls away with this finding. Issue 2 : Scheme I the alleged sham termination and exclusion

Exclusion from management can amount to oppression where a quasi-partnership exists. Here, the factual premise is disputed at every point. The Defendants say the Plaintiff absconded from 16 October 2025 and left the company’s WhatsApp groups on 22 and 24 October 2025 while still employed. The Plaintiff says he continued working and was removed by the First Defendant. The lawfulness and fairness of the dismissal are the very questions now pending before the Industrial Court on the Plaintiff’s own representation lodged on 19 December 2025. It is not appropriate for me to make findings on the propriety of a dismissal that the Plaintiff has himself referred to that forum.

In support of the exclusion case the Plaintiff relied on Lim Titt Huat & Anor v. Tan Say Keng & Ors [2026] 4 MLRH 829, where exclusion from management, absent equitable justification and a fair exit, was held to destroy the substratum of a quasi-partnership and so to constitute oppression. That reasoning presupposes the very thing I have found to be absent, it operates only once a quasi-partnership and the equitable expectation of continued participation that attends it, has been established. Having found no such relationship, the Plaintiff's removal does not carry the significance that the exclusion in Lim Titt Huat carried.

Nor does Pelabuhan Tanjung Pelepas Sdn Bhd v. Industrial Court Malaysia & Anor [2020] MLRHU 230, on which the Plaintiff relied for the absence of a show-cause letter and a domestic inquiry, advance matters in this forum. Whether the dismissal was procedurally fair, and whether it was in truth an abscondment or an exclusion, are the very questions arising on the Plaintiff's own representation now pending in the statutory process he himself invoked. They fall to that forum and not to a determination on affidavit under section 346 of Act 777.

It is also relevant that the Plaintiff remains a registered shareholder, that no buy-out has been forced upon him and that it was he who first proposed to sell his shares and exit. In the absence of an established quasi-partnership, the termination of the Plaintiff’s employment does not, without more, amount to oppression of him in his capacity as a member. I am not satisfied that Scheme I is made out on this record. Issue 3 : Scheme II - management fees, the loan and dividends

This scheme faces three difficulties. First, it is in substance a complaint about monies said to have left the company, any loss is the company’s loss, reflected in the value of the Plaintiff’s shares and is therefore reflective loss rather than a personal wrong distinct from the company. Secondly, the transactions are documented. The management fees appear in the audited accounts for 2021 to 2024, which were circulated to and received by the Plaintiff and the SGD500,000.00 loan is contained in a written agreement which, on the Defendants’ evidence, the Plaintiff witnessed. To characterise these as a “sham” is a serious allegation that cannot be established by suspicion. [See : Pan-Pacific Construction Holdings].

Thirdly, the dividend and bonus grievance is directed at the Singapore company, a separate legal entity in which the Plaintiff is himself a shareholder and from which, on the Defendants’ evidence, he received a bonus of SGD150,000.00 and a dividend of SGD90,000.00 that he did not disclose. The Plaintiff relied on Koay Peng Soon v. Lee Seik Fun & Ors [2026] MLRH 578 for the proposition that the payment of the company's monies to entities associated with the majority and the misappropriation of company funds, may amount to oppression. The principle is not in doubt, but the case is distinguishable. There the payments were made to entities in which the complainant had no interest and for purposes unconnected with the paying company's business. Here the management fees were recorded in audited accounts circulated to the Plaintiff, the loan is documented in an agreement he witnessed and the recipient is a company in which the Plaintiff is himself a 30% shareholder and which is the subject of his own separate proceedings. Those features take this case outside the reasoning in Koay Peng Soon.

The affairs of the Singapore company are not the affairs of the Second Defendant and they are the subject of the Plaintiff’s separate proceedings in Singapore. They do not engage Section 346 in this action. I am not satisfied that Scheme II is made out. Issue 4 : Scheme III - the alleged diversion to the Fourth Defendant

The diversion actually evidenced is a single purchase order from YTC Precast to the Fourth Defendant for RM109,056.00. The email and purchase order were copied to the Plaintiff, which is difficult to reconcile with a concealed fraud. The Defendants give a coherent commercial explanation : reinforcement bar was an ad hoc line rather than the committed-project core business. At the material time the company was cash-constrained while YTC Precast itself owed the company some RM3.76 million. The Fourth Defendant was incorporated and owned by the Third Defendant and operates from his home and the Second Defendant trades by direct delivery, so that no transfer of stock arises. Whether, contrary to this, the company supplied rebar to YTC Precast as an established and continuing stream and whether the First Defendant directed the order to the Fourth Defendant are disputed questions of fact that I cannot resolve on affidavit.

The constructive trust and account of profits reliefs against the Third and Fourth Defendants require fraud or other exceptional circumstances to be pleaded and proved before the separate legal personality of a company may be disregarded or its business impressed with a trust. No such case is made out on these affidavits. This accords with Capital City Property Sdn Bhd v Teh Swee Neo & Anor [2026] 3 MLJ 433, on which the Third and Fourth Defendants relied, where the Court of Appeal held that the court's power to disregard the separate personality of a company may be invoked only on proof, to the requisite standard, of actual fraud, or of equitable or constructive fraud and that the lifting of the veil is not a cause of action in itself but a consequence that must be pleaded and established. Here the Plaintiff has neither pleaded actual fraud against the Third and Fourth Defendants with the particularity such an allegation demands, nor made it out on the affidavits. And the diversion said to justify the trust rests, as I have found, on a single documented transaction openly copied to him.

In support of this part of his case the Plaintiff relied on a line of authority on the fiduciary duties of a director. [See : Sun Pharmaceutical Sdn Bhd v. Wong Fong Leng & Ors [2026] 2 MLRH 633, Karisma Wira (M) Sdn Bhd v. Salleh Abdul Majid and Anor [2010] 19 MLRH 189 and KJW Engineering Sdn Bhd v. Balakrishnan Iyavoo & Ors [2014] MLRHU 247], for the propositions that –

a director may not divert a maturing business opportunity to a vehicle in which he is interested;

a director cannot excuse the loss of the company's business by attributing it to the choice of a third party; and

it is no answer that the company might not in any event have retained the business.

I do not doubt those principles. But they are principles concerning wrongs done to the company and the remedies they attract, which include an account of profits, restitution of the diverted gain, the restraint of competition, are remedies that enure to the company. They are, in the sense I have described, reflective and derivative in character. Even taken at their highest, they do not, without more, establish a wrong done to the Plaintiff in his personal capacity as a member such as to engage section 346 of Act 777. Their factual premise, that an established and continuing stream of the company's business was diverted, is the very matter I have found to be unresolved on these affidavits. On this record the authorities do not carry the Plaintiff across either threshold.

In any event, an account of profits payable to the company and the restraint of competition with the company, are in substance reliefs for wrongs to the company, they are derivative in character and reflect the company’s loss rather than a personal wrong to the Plaintiff. The conspiracy alleged against the First, Third and Fourth Defendants is not established to the standard required. [See : Renault SA v Inokom Corp]. I am not satisfied that Scheme III is made out. Issue 5 : Clean hands

The Plaintiff incorporated two companies, in Malaysia and Singapore, in July 2025, as sole director and shareholder and did not disclose them until the Defendants raised the matter. His explanation that they are dormant and defensive is itself disputed. A party invoking the just-and-equitable jurisdiction must come with clean hands. This does not by itself decide the application, but it reinforces my conclusion that the competing accounts cannot fairly be resolved in the Plaintiff’s favour on affidavit. The reliefs sought

Even had some unfairness been shown, the reliefs sought would not readily follow. The buy-out is the Plaintiff’s real objective and it was he who initiated the sale and the exit. The court’s power under section 346 of Act 777 is not a means by which a member may escape a bad bargain, recoup his investment, or shed the risk to which his capital was exposed. [See : Auspicious Journey]. The discharge of the personal guarantees and the indemnity sought pending discharge, would require the cooperation of banks that are not before the court and lie within the banks’ discretion. The constructive trust, account of profits, injunction and forensic audit each depend on findings of fact that cannot be made on this record and several are in substance reliefs for the company rather than for the Plaintiff.

Based on the foregoing reasons and applying the principles set out above, I am not satisfied that the Plaintiff has discharged the burden of establishing oppression or unfair prejudice within section 346 of Act 777 to the standard required for the declarations and consequential relief he seeks.

Accordingly, the Originating Summons in Enclosure 1 is dismissed with costs of RM10,000.00, subject to allocatur. Dated : 25 June 2026 -signed- (NORADURA BINTI HAMZAH) Judicial Commissioner High Court Civil 2 Johor Bahru Counsel for the Plaintiff : : Low Kin Fai together with Chong Ee Wen Messrs. Low & Fong Counsel for the Defendants : :