V.S. Industry Berhad v Lim Chang Huat (WA-24NCC-400-07/2023)

The law recognises that although the will of the majority binds shareholders in a company, it will intervene if the act of the majority leads to tyranny.

In Malaysia, the legal intervention against the tyranny of the majority comes in the form of section 181 of our Companies Act,1965 which is the predecessor of our current section 346 Companies Act, 2016 Act 777 (“CA 2016”).

According to Lord Wilberforce in Re Kong Thai Sawmill (Miri) Sdn Bhd [1978] 2 MLJ 227; [1978] 1 MLRA 235, section 181 of our Companies Act ,1965 “trace its descent from section 210 of the United Kingdom Companies Act, 1948 which was introduced in that year in order to strengthen the position of minority shareholders in limited companies.”

Section 210 of the United Kingdom Companies Act, 1948 was enacted after the United Kingdom accepted a recommendation from the Cohen Committee chaired by Lord Cohen which recommended the introduction of an alternative remedy of oppression in section 210 to the only remedy then available which was the winding-up of the company. [See the Report of the Committee on Company Law Amendment [1945], known in short as the Cohen Report and Umakanth Varottil, “Unpacking the Scope Of Oppression, Prejudice And Mismanagement Under Company Law In India,” NUS Law Working Paper 2020/020, July 2020, www.law.nus.edu.sg/wps/].

On 25-07-2023, the plaintiff filed an Originating Summons (“OS”) seeking reliefs under section 346 of the CA 2016 on the grounds that the 1st, 2nd and 3rd defendants have conducted and/or are conducting the affairs of the 4th defendant NEP Holdings (Malaysia) Berhad (“NEP”) and/or are exercising their powers as directors in a manner oppressive or unfairly prejudicial to the plaintiff and/or in disregard of the plaintiff’s interest as a member of NEP.

The plaintiff is a minority shareholder of NEP holding 251,451 or 20% shares.

It is not in dispute that the plaintiff became a minority shareholder arising from the plaintiff’s investment of RM 60 million in NEP in 2016.

For the purposes of this Judgment, the term “oppression”, when used in isolation by me, is used as a short form to refer to the entire range of conduct prohibited by section 346 of the CA 2016. Plaintiff’s claim for oppression

The plaintiff’s claim for oppression is based on the following [undisputed] breaches by the 1st to 3rd defendants as at June 2023 – i. the failure to hold a Board Meeting of NEP since 06/05/2021 despite the plaintiff’s numerous requests to do so; ii. the failure to call or convene NEP’s Annual General Meeting (“AGM”) for the Financial Years Ended (“FYE”) 30-06-2021 and 30-06-2022. NEP’s last AGM was on 06-05-2021; iii. the failure to made available and/or table for approval before the Board of Directors or any AGM of NEP the Audited Financial Statements of NEP for FYE 2021 and 2022; iv. the failure to declare and pay dividend for FYE 30/06/2020 that was decided during NEP’s Board Meeting of 14/09/2020; v. the failure to disclose information pertaining to the financial affairs of NEP post-2021 after the plaintiff had obtained accounting records up to 2020 pursuant to an Inspection Order obtained by a court order dated 10-06-2022; and vi. serious allegations have been made against the 1st defendant by members of the public who were induced to invest and become iPartners in NEP’s subsidiary. The 1st defendant has completely shut out the plaintiff in responding to these serious allegations. [See Enclosure 58 plaintiff’s written submissions at paragraph 2] 1st, 2nd and 4th defendants’ reply [10] The 1st, 2nd and 4th defendants in their reply written submissions dated 08-04-2024 in Enclosure 131 do not deny the facts contained in the six oppressive grounds cited by the plaintiff.

Strangely, at paragraph 1 they said they will rely on the 3rd defendant’s Submission in Reply [which can be seen below under the topic “3rd. defendant’s reply” to had thrown the 1st, 2nd and 4th defendants under the bus] –

On the onset we will adopt the 3rd Defendant’s Submission in Reply as it has clearly replied to all the issues raised by the Plaintiff in their Submissions. [12] As a sustentative submission, the 1st, 2nd and 4th defendants alleged that the plaintiff had lodged a police report against the defendants under section 409 of the Penal Code for criminal breach of trust and so this OS cannot be decided by just affidavit evidence alone! [See the 1st, 2nd and 4th defendants reply written submissions dated 08- 04-2024 Enclosure 131 at paragraphs 1 - 6]. [13] This submission is, with the greatest respect to lead counsel Mr Sng Eu Kim, not a defence to an action for oppression relief. 3rd defendant’s reply [14] Similarly, Mr. Kenneth Gomes counsel for the 3rd defendant in his reply written submissions dated 06-04-2024 in Enclosure 129 does not deny the facts contained in the six oppressive grounds cited by the plaintiff. [15] Instead the 3rd defendant absolves himself from any breach of duty as a director and pushed all blame to the 1st, 2nd and 4th defendants on the ground that he is only a nominee independent director of the 4th defendant /NEP with no executive powers or shareholding in NEP; and in no position to call for a Board of Directors meeting or to compel NEP to complete and file the Audited Accounts of NEP. [16] This is what the 3rd defendant submits in his reply written submissions dated 06-04-2024 in Enclosure 129–

Taking the Plaintiffs pleadings from their affidavit evidence and submissions the primary issues facing the 3rd Defendant as a nominee independent director of the 4th Defendant is mainly: a) What were the duties of the 3rd Defendant as a Non-Executive Director of NEP Holdings Bhd with no executive powers or shareholding in the 4th Defendant. b) Did the 3rd Defendant breach his duties as a Director or was he even negligent in the performance of his individual performance of his Directorship, for the 4th Defendant. c) Did the 3rd Defendant breach his duties in relation to the i. Subscription Agreement dated 25/7/2016 ii. Shareholder Agreement dated 25/7/2016 d) Was the 3rd Defendant in a position to call for a Board of Directors meeting or could he even compelled [sic] the 4th Defendant to complete and file the Audited Accounts of the 4th Defendant. …

The key issue which the Plaintiff have raised is that NEP has not called for a Board of Directors Meeting for 2 years and has been kept in the dark regarding the Audited Accounts of the 4th Defendant.

However, it is not in dispute that prior to the oppression application filed by the Plaintiff, the Plaintiff and DBKL had filed an Originating Summons in the Kuala Lumpur High Court Originating Summons No. WA-24NCC-43-01/2022 against NEP seeking for inspection and taking copies of NEP and its subsidiaries' accounting and other records.

The High Court allowed the Inspection OS on 10/06/2022 and granted the inspection sought. See Datuk Beh Kim Ling & Anor v. NEP Holdings (M) Bhd [2023] 8 MLJ 81. The High Court's decision has since been affirmed by the Court of Appeal on the 27/09/2023.

NEP and its officers (including LCH, LCK and CCP) were subsequently cited for contempt of Court and were sentenced with fines for breaching the terms of the Inspection Order.

It is because of these disputes that the 4th Defendant has not called for a Board of Directors Meeting and the stance taken by the 4th Defendant is that it is in dispute with the Plaintiff over the legal actions taken against the 4th Defendant and the directors of the 4th Defendant and also that the Plaintiff is in breach of the terms and conditions of the Shareholders Agreement dated the 25/7/2016.

It is therefore my submissions that the 3rd Defendant has not committed any oppressive conduct warranting any individual reliefs that the Plaintiff is seeking against the 3rd Defendant in his individual capacity as a Director of the 4th Defendant. It is the Plaintiffs own conduct by way of the High Court actions for the Inspection Order and the committal proceedings which is still pending in the Court of Appeal which are considered the vary oppression that the Plaintiff is talking about in this application. …

There is a Deadlock between the parties, but the Plaintiff is only a minority shareholder with 20% shares in the 4th Defendant. The 1st Defendant has almost 80% shareholding in the 4th Defendant and is in majority control of the 4th Defendant. The business of the company is still running smoothly and the Plaintiff allegation are only at a deadlock in the 4th Defendant not calling for a Board of Directors meeting in the last 2 years…

There has only been a breakdown of the relationship between the minority shareholder and the majority shareholder. We continue to insist that the Plaintiff should resolve their issue according to the Shareholders Agreement that the Plaintiff and 1st and 2nd Defendant have entered accordingly. [Emphasis added] My decision [17] I took over this OS in late 2024 and heard counsel on 21-11-2024 and 13-12-2024. On 15-01-2025, I delivered decision in favour of the plaintiff. I also dismissed an oral application for a stay of my orders in view of the gravity of the breaches by the 1st to 3rd defendants and as there are no special circumstances to justify a stay of my orders. [18] In the OS [Enclosure 1/110] the plaintiff has asked for the following orders-i. a declaration that the 1st, 2nd and 3rd defendants have conducted and/or are conducting the affairs of NEP and/or are exercising their powers as directors in a manner oppressive to and/or unfairly prejudicing the plaintiff and/or in disregard to the plaintiff’s interest as a member of NEP; ii. NEP be wound up and the assets of NEP be distributed on the shareholdings of the parties on the basis as if no oppressive and unfair prejudice conduct had taken place; iii. Datuk Ooi Woon Chee (Approval No. 01891/03/2024 P) and Mr Wong Ching Yong (Approval No. 01296/07/2025 P) be appointed as joint and several liquidators of NEP; iv. general damages be assessed and paid by the 1st, 2nd and 3rd defendants to the plaintiff and/or NEP together with interest from date of the order for damages until date of full settlement; v. the costs of this action be paid by the 1st, 2nd and 3rd defendants to the plaintiff; vi. such further and/or other Orders and/or reliefs which this Honourable Court deems fit and proper; and vii. the parties are given liberty to apply. [19] Mr. Sivaneindiren a/l P Selvanandam, lead cousel for the plaintiff, during oral submissions has asked for-i. order in terms for prayer 1; ii. a modified form of prayer 2 to be granted i.e. for NEP be wound up only, as I have told counsel I will not interfere with the process of distribution post-winding-up; and iii. the withdrawal of prayer 4 of the OS. [20] The orders I had made therefore are-i. a declaration that the 1st, 2nd and 3rd defendants have conducted and/or are conducting the affairs of NEP and/or are exercising their powers as directors in a manner oppressive to and/or unfairly prejudicing the plaintiff and/or in disregard to the plaintiff’s interest as a member of NEP; ii. NEP be wound up; iii. Datuk Ooi Woon Chee (Approval No. 01891/03/2024 P) and Mr Wong Ching Yong (Approval No. 01296/07/2025 P) be appointed as joint and several liquidators of NEP; and iv. the 1st, 2nd and 3rd defendants to pay jointly and severally costs of RM 80,000 to the plaintiff subject to allocatur. [21] On 16-01-2025, the 3rd defendant has appealed to the Court of Appeal against my entire decision. On 17-01-2025, the 1st, 2nd and 4th defendants have also appealed to the Court of Appeal against my entire decision. [22] These are my Grounds of Judgment. Material facts of the case Parties [23] The plaintiff V.S. Industry Berhad is a public company listed on the Main Market of Bursa Malaysia Securities Berhad. The plaintiff is an investment holding company principally engaged in the business of investment holding, manufacturing, assembling and sale of electronic and electrical products and plastic moulded components and parts and is the holding company of various subsidiary companies that are also conducting similar business activities. [24] The plaintiff is a minority shareholder of NEP holding 251,451 or 20% shares. [25] One Datuk Beh Kim Ling [“DBKL”] is the Executive Chairman and a director of the plaintiff. DBKL is a shareholder of NEP holding 17,462 or 1.39% shares. He is not a party to this oppression OS. [See paragraph 1 of the plaintiffs’ AIS in Enclosure 2]. [26] The 1st defendant Lim Chang Huat (“LCH”) is the majority shareholder of NEP holding 988,337 or 78.61% shares. The 2nd Defendant Lim Chee Kon (“LCK”) is also a shareholder of NEP, holding 5 or less than 0.01% shares. [27] The 3rd defendant is not a shareholder of NEP. He is a Non-Executive Director of NEP. [28] The 4th defendant NEP is an investment holding company and through its subsidiaries, has been principally engaged in the business of assembling, wholesaling, distributing and trading in water filtration system and health care related products and sale and distribution of beverage making machines and beverages capsules. NEP has 8 wholly owned subsidiaries and 8 indirectly owned subsidiaries as particularised in paragraph 18 of the plaintiff’s AIS. The plaintiff invested RM 60 million in NEP in 2016 [29] As mentioned above, the plaintiff became a minority shareholder when it invested RM 60 million in NEP in 2016. [30] It is not in dispute that a Subscription Agreement dated 25-07-2016 between the plaintiff as investor, NEP as issuer and LCH as guarantor (who was holding 99.9% of the total issued and paid-up share capital of NEP at that material time) was executed for the plaintiff’s said investment of RM 60 million in NEP. [31] Concurrently with the Subscription Agreement, the plaintiff entered into a Shareholders’ Agreement dated 25-07-2016 (“the SHA”) with LCH, LCK and NEP which set out their mutually agreed rights, duties, liabilities and obligations. [32] These rights, duties, liabilities and obligations have been incorporated into the new Articles of Association of NEP via a Special Resolution dated 08-08-2016(“NEP’s Articles”). Documents i. For the Subscription Agreement see paragraph 29 and page 184 Exhibit “BKL-6” of the plaintiffs’ AIS in Enclosure 2; ii. For the SHA see paragraph 30 and page 230 Exhibit “BKL-7” of the plaintiffs’ AIS; and iii. For the NEP’s Articles see paragraph 33 and page 262 - 295 of Exhibit “BKL-8” of the plaintiffs’ AIS. The Pleaded case of the plaintiff [33] The plaintiff’s case setting out the background facts in support for relief from oppression is set out in its AIS affirmed by DBKL who is the Executive Chairman and a director of the plaintiff and also a shareholder of NEP holding 17,462 or 1.39% shares. He said-QUERIES ARISING FROM CONCERNS OVER THE AFFAIRS OF

Sometime in the second half of 2020, NEP had approached AmInvestment Bank Bhd (“AmInvestment”) to put up a proposal to list the Arissto Group, which comprises AMSB and the 7 companies set out at paragraph 18(ii)(a) to (g) hereinabove on the Main Board of Bursa Malaysia Securities Berhad (“Intended IPO”). …

Notwithstanding the Board’s decision to proceed with the Intended IPO, the Management of NEP inexplicably failed to submit sufficient information and documentation required for purposes of undertaking the Intended IPO despite requests by AmInvestment.

I began to have suspicions about the conduct of management of the business and affairs of NEP and its subsidiaries by the 1st Defendant.

I then caused the Plaintiff to seek legal advice from its previous solicitors, Messrs Radhi Azizan (“Radhi”).

The Plaintiff was informed by Radhi that a search they conducted at the CCM on NEP on 14/04/2021 revealed that NEP had not filed its audited accounts for Financial Years Ended 2017 onwards in breach of Section 259 CA 2016.

The Plaintiff and I were shocked by this discovery. I had assumed that NEP had filed its audited financial statements since NEP had paid interim dividends in 2018 and 2019 to VSIB (and also to me).

As the nominated director of VSIB in NEP, I was very concerned that NEP has not been filing its Audited Financial Statements since Financial Year Ended 2017. This discovery caused me to be even more suspicious that there may be mismanagement of the business and affairs of NEP by the other Board members, led by the 1st Defendant.

On the instructions of the Plaintiff, Radhi issued a letter dated 15/04/2021 to the 1st and 2nd Defendants and to NEP expressing concern over NEP and its subsidiaries’ failure to comply with their statutory obligations to lodge its Audited Financial Statements with the CCM since the last one filed for Financial Year Ended 30/06/2016. By the same letter, Radhi demanded that NEP, the 1st and 2nd Defendants grant the Plaintiff full access to the records, financial statements and information of NEP as provided for in Clause 7.8.1 of the Shareholders’ Agreement dated 25/07/2016. As a matter of fact, it is expressly provided in Article 58 of NEP’s Constitution that:- “For so long as the Investor holds at least five percent (5%) of the Ordinary Shares or any other classes of shares in the Company, the Investor (the Plaintiff) will be given full access to the records, financial statements and information of the Company and further the Company shall deliver to the Investor, in such manner as the Investor may determine:

annual budget and operating plan within thirty (30) days prior to the beginning of each fiscal year or at such time the Investor may otherwise determine;

audited financial statements within ninety (90) days after the end of each fiscal year or at such time the Investor may otherwise determine;

monthly management accounts, management reports and report of key indicators inclusive of explanations on budget variances (in the form approved by the Investor) within thirty (30) days after the end of each month or at such time the Investor may otherwise determine;

other management reports of the Company; and (e) such other information as the Investor may reasonably request. The above-mentioned audited financial statements shall include those of the Company’s Subsidiaries, and shall be provided on a consolidated basis.” There is now shown to me a copy of Radhi’s letter dated 15/04/2021 annexed herewith and marked as Exhibit “BKL-11”. …

Meanwhile, VSIB through CS Chong started pressing one Kong Kian Huat (the General Manager (Finance & Accounts of NEP) and said Alex Tan for a board meeting to be held by NEP so that I can find out more about the management of the business and affairs of NEP. …

By a letter dated 21/04/2021, NEP replied Radhi’s letter of 15/04/2021 purporting to acknowledge the Plaintiff’s nominated representative’s right to have access to “all documents and accounts” i.e. the Accounting Records of NEP and its subsidiaries. There is now shown to me a copy of NEP’s letter dated 21/04/2021 annexed herewith and marked as Exhibit “BKL- 13”.

However, notwithstanding NEP’s letter of 21/04/2021 acknowledging my rights as a nominated director of the Plaintiff, NEP did not furnish its Accounting Records to the Plaintiff or me. …

As I did not receive any of the Accounting Records from NEP despite NEP’s acknowledgment of my rights to said Accounting Records, I issued a reminder to NEP and the 1st Defendant by my letter attached to my email dated 30/07/2021. Said letter demanded for documents/information of NEP’s various subsidiaries to be provided to me, namely: - … There is now shown to me a copy each of my letter and email dated 30/07/2021 and my email dated 16/08/2021 annexed herewith and collectively marked as Exhibit “BKL-16”.

By my letter of 30/07/2021, I also called for a Board Meeting to be held without delay due to my concerns over the unavailability of financial records and real data of NEP and its subsidiaries’ performance as well as complaints by iPartners published in social media regarding alleged non-payment or late payment by one of NEP’s subsidiaries. …

As I did not hear from NEP or the 1st Defendant or Andrew more than a week after Andrew’s email of 06/08/2021, I emailed said Andrew on 16/08/2021, which email was copied to the 1st and 2nd Defendants to ask for an indication when the Accounting Records can be made available. There is now shown to me a copy of my email of 16/08/2021 annexed herewith and marked as Exhibit “BKL-18”.

As neither the Plaintiff nor I received any response from NEP, Radhi was again instructed to write to NEP. By letter dated 27/08/2021, Radhi requested NEP to provide the Accounting Records within 14 days. There is now shown to me a copy of Radhi’s letter dated 27/08/2021 to NEP annexed herewith and marked as Exhibit “BKL-19”.

Subsequent to Radhi’s aforesaid letter of 27/08/2021, the following reminders for the Accounting Records, coupled with requests to convene a Board Meeting of NEP were sent to NEP and to inter alia the 1st to 3rd Defendants: -

my email of 07/09/2021;

my email of 10/09/2021;

the Plaintiff’s letter dated 08/11/2021; and

the Plaintiff’s letter dated 17/11/2021. There is now shown to me a copy each of the aforesaid emails and letters annexed herewith and collectively marked as Exhibit “BKL- 20”.

Despite the aforesaid requests and reminders and despite the 1st Defendant informing the Plaintiff as early as 06/08/2021 that the relevant departments of NEP have been instructed to prepare the documents requested by the Plaintiff, the only financial documents which NEP furnished to the Plaintiff were: -

the Audited Accounts of NEP for Financial Year Ended 30th June 2016;

the Audited Accounts of NEP for the financial period from 1st July 2016 to 31st December 2017;

the Audited Accounts of NEP for the financial period from 1st January 2018 to 30th June 2019; and

the Audited Accounts of NEP for Financial Year Ended 30th June 2020. No reasons were given by NEP or the 1st Defendant why the documents sought by the Plaintiff were not provided despite informing the Plaintiff on 06/08/2021 that the documents would be provided to the Plaintiff.

There was also no Board Meeting fixed despite my repeated requests from as early as 30/07/2021.

As NEP continued to fail, refuse and/or neglect to allow me in my capacity as a director of NEP and/or VSIB as a shareholder pursuant to the Shareholders Agreement and Subscription Agreement access and/or furnish VSIB or me the Accounting Records, VSIB and I commenced Kuala Lumpur High Court Originating Summons No. WA-24NCC-43-01/2022 (“Inspection OS”) against NEP seeking inter alia, that: - “(1) the accounting and other records (“Accounting Records”) of the Defendant (NEP) required to be kept pursuant to Section 245 of the Companies Act 2016 be: -

open to inspection by Andrew Heng … an approved company auditor (“Auditor”) and partner/director of Baker Tilly Monteiro Heng PLT … and acting for: -

the 1st Plaintiff (me), a director of the Defendant; and/or

(ii)

(ii) the 2nd Plaintiff (VSIB), who is entitled to the said Accounting Records under a Shareholders’ Agreement dated 25/07/2016

(iii) and/or by the Auditor’s colleagues from Baker Tilly;

available for the Auditor and/or his colleagues from Baker Tilly to make copies of and/or take extracts from the Accounting Records upon the undertaking in writing given by the Auditor to the High

the Defendant (NEP), do within eight (8) days from the date of being served with this Order; supply to the 1st Plaintiff (me) and/or the 2nd Plaintiff (VSIB) a copy of the documents listed in Annexure B to this Originating Summons;”

NEP opposed the Inspection OS. On 10/06/2022, the High Court allowed VSIB’s and my Inspection OS. NEP has since appealed to the Court of Appeal against the decision of the High Court and said appeal as at date of this Affidavit herein is currently pending. [updated note-the appeal has since been dismissed] [34] The plaintiff makes the following allegations of oppression and unfairly prejudicial conduct by the 1st to 3rd defendants in its AIS affirmed by DBKL, the Executive Chairman and a director of the plaintiff. He said as of 25-07-2023- Failure and/or refusal to call for a Board of Directors’ Meeting of NEP

Although it is inter alia expressly provided at Clause 7.5.1 of the Shareholders’ Agreement that: - “A meeting of the Board shall be held every quarter and more frequently if required by the Investor (the Plaintiff)” And even though the Board of NEP had at the Board Meeting of 14/09/2020 agreed to my suggestion that NEP should hold Board Meetings on a quarterly basis, the Board of NEP failed to hold meetings on a quarterly basis as agreed.

In fact, since the last Board Meeting held on 06/05/2021, NEP has to date failed, refused and/or neglected to hold any Board Meetings even though I have repeatedly requested for a Board of Directors’ Meeting be convened, brief particulars of which are set out below: -

CS Chong’s email of 19/07/2021 to NEP’s Alex Tan and copied to the 1st and 3rd Defendants calling for a Board Meeting to discuss amongst others, the financial health of NEP arising from a complaint by an Aristo iPartner on Facebook who alleged that he/she did not receive payment from Arissto for more than 3 months and asked whether the iPartner scheme is a scam; There is now shown to me a copy of CS Chong’s aforesaid email of 19/07/2021 and a screenshot of the Facebook post annexed herewith and collectively marked as Exhibit “BKL-21”.

my letter to NEP, the 1st and 2nd Defendants dated 30/07/2021 (Exhibit “BKL-16” hereinabove) calling for a Board Meeting to address all urgent and pressing issues faced by NEP including the complaints raised in social media regarding the non-payment or late payment to Arissto iPartners which adversely affect the image of NEP;

CS Chong’s subsequent email of 06/09/2021 to NEP’s Alex Tan and copied to the 1st and 3rd Defendants noting the fact that there are further complaints from the business partners of Arissto and reiterating the Plaintiff’s request for a Board Meeting to be held immediately; There is now shown to me a copy of CS Chong’s aforesaid email of 06/09/2021 annexed herewith and marked as Exhibit “BKL-22”.

my email of 07/09/2021 to NEP’s Andrew, Alex Tan, CK Lew, the 1st and 3rd Defendants to press for a Board Meeting to discuss the issues raised by CS Chong and I on behalf of the Plaintiff and Andrew’s reply vide email issued on 09/09/2021 suggesting mid October 2021 as a tentative time to hold a Board Meeting when the office is anticipated to be fully reopened;

my email of 10/09/2021 to Andrew and the 1st to 3rd Defendants amongst others, proposing to hold the meeting sooner i.e. by 17/09/2021 given the seriousness of the issues to be discussed including allegations that NEP is a scam company and the fact that the Board Meeting could be held given the easing of Covid-19 restrictions and that the proposed Board Meeting could be held at any Meeting rooms available at most reputable hotels; and There is now shown to me a copy each of my email of 07/09/2021, Andrew’s email of 09/09/2021 and my email of 10/09/2021 annexed herewith and marked collectively as Exhibit “BKL-23”.

As there was no response from the 1st to 3rd Defendants, Andrew or NEP to my email of 10/09/2021 for a Board Meeting, the Plaintiff issued a letter dated 17/11/2021 to the Board of Directors of NEP, the 1st, 2nd and 3rd Defendants to inter alia formally request for an urgent Board Meeting to be held on an urgent basis to discuss, amongst others, the up to date accounts of NEP, the latest business development and future business plan of NEP. There is now shown to me a copy of the Plaintiff’s letter dated 17/11/2021 annexed herewith and marked as Exhibit “BKL-24”.

Despite the aforesaid letter of 17/11/2021 and numerous prior requests for a Board Meeting, neither NEP nor the 1st to 3rd Defendants took any steps to convene a Board Meeting.

So as to overcome the 1st to 3rd Defendants’ and Andrew’s “excuse” of Covid-19 restrictions, the Plaintiff had by letter dated 09/12/2021 suggested to the Board of NEP to hold a Board Meeting of NEP virtually, given the ongoing Covid-19 Pandemic then. There is now shown to me a copy of the Plaintiff’s letter dated 09/12/2021 annexed herewith and marked as Exhibit “BKL-25”.

Despite the aforesaid letters of 07/11/2021 and 09/12/2021 requesting for a Board Meeting, the Plaintiff did not receive any response from NEP or the 1st to 3rd Defendants.

Consequently, I exercised my right as the Plaintiff’s nominated director to the board of NEP to issue a notice dated 22/12/2021 by email to the other Board members of NEP, i.e. the 1st, 2nd and 3rd Defendants and to the “Acting Company Secretary” of NEP, said Andrew to convene a board meeting of NEP on 30/12/2021 at 10.30 a.m. There is now shown to me a copy of my email dated 22/12/2021 sending and attaching the Notice of Meeting dated 22/12/2021 to the 1st, 2nd and 3rd Defendants and Andrew annexed herewith and marked as Exhibit “BKL-26”.

In response to my Notice of Meeting, the “Acting Company Secretary” of NEP, said Andrew by letter dated 27/12/2021 inter-alia alleged “unavailability” of several directors to attend the Board of Directors’ Meeting on 30/12/2021 and short notice of my Notice of Meeting. Said Andrew went on to state that “the directors are in agreement for a board meeting to be held at the best opportunity available” and that “an exact date for the Board Meeting to be held will be proposed and circulated”. There is now shown to me a copy Andrew’s email of 28/12/2021 attaching the said letter dated 27/12/2021 annexed herewith and marked as Exhibit “BKL-27”.

Andrew also rejected the possibility of holding a Board Meeting virtually even though Article 43 (a) of NEP’s Articles expressly provide that a Board Meeting may be conducted “via telephone, radio, conference television or similar communication equipment or any other form of audio or audio-visual instantaneous communication whereby all participating persons are able to hear and be heard by all other participants”.

Andrew’s contention that a Board Meeting of NEP cannot be held virtually is patently false and inconsistent with the Constitution of

As the 1st to 3rd Defendants have failed to hold any Board Meeting despite my repeated requests since July 2021, by letter dated 29/12/2021, I rejected the allegation of short notice and inter-alia stated that the response evidences a studious avoidance of duties and responsibilities by the Board members to hold a Board meeting to discuss important issues affecting NEP. I also informed Andrew and the other directors that the Board Meeting on 30/12/2021 will proceed and that a failure on the part of the directors to attend the Board Meeting will be regarded as a willful refusal to perform their duties and obligations. There is now shown to me a copy of my email dated 29/12/2021 sending and attaching my letter dated 29/12/2021 to the 1st, 2nd and 3rd Defendants and Andrew annexed herewith and marked as Exhibit “BKL-28”.

On 30/12/2021, I attended at the venue for the scheduled Board Meeting but could not proceed for want of quorum as neither the 1st, 2nd nor 3rd Defendants bothered to turn up. Said alleged “acting Company Secretary”, Andrew was also absent. There is now shown to me a copy of the Attendance List for the said Board Meeting annexed herewith and marked as Exhibit “BKL-29”.

In view of the 1st, 2nd and 3rd Defendants’ failure and/or refusal to attend the Board Meeting, I wrote to them on 31/12/2021 to state that their failure to attend the Board Meeting coupled with their failure and/or refusal and/or neglect to convene a board meeting for over 7 months despite my repeated requests evidences a clear and deliberate act to ignore and frustrate inter alia the Plaintiff’s rights as a shareholder to have important issues in relation to the affairs of NEP discussed and resolved at the Board of NEP through its nominated Director. There is now shown to me a copy of my email dated 31/12/2021 sending and attaching my letter dated 31/12/2021 to the 1st, 2nd and 3rd Defendants and Andrew annexed herewith and marked as Exhibit “BKL-30”.

Although Andrew’s letter dated 27/12/2021 stated that the Directors are in agreement for a Board Meeting to be held at the first opportunity available and although the Articles of NEP provided that a Board Meeting is to be held “every quarter or more frequently, if required by the Investor” (i.e. the Plaintiff), no Board Meeting was convened by the 1st, 2nd or 3rd Defendants even as at July 2022.

As such, the Plaintiff made another attempt to call for a Board of Directors’ Meeting by my email of 19/07/2022 to the 1st, 2nd and 3rd Defendants attaching a Notice of Meeting dated 19/07/2022 calling for a board meeting on 27/07/2022 to discuss, amongst others, the reputation and interest of NEP and to receive status updates on all matters raised at the last Board Meeting of 06/05/2021. There is now shown to me a copy of my email dated 19/07/2022 sending and attaching my letter dated 19/07/2022 to the 1st, 2nd and 3rd Defendants and Andrew annexed herewith and marked as

In response to my letter of 19/07/2022, Andrew responded vide letter dated 25/07/2022 to once again allege that none of the other Directors are available on 27/07/2022 and the Board Meeting must be postponed. Andrew went on to state that he will confirm the earliest date possible to convene a Board Meeting upon receiving confirmation from all directors. There is now shown to me a copy of Andrew’s letter of 25/07/2022 annexed herewith and marked as Exhibit “BKL-32”.

By my email of 26/07/2022, I responded to Andrew’s said letter and reminded him of the failure to call for a board meeting. Since Andrew had informed that none of the other Directors are available on 27/07/2022 and none of the other Directors had responded to my Notice for a Board Meeting to be held on 27/07/2022, the proposed Board Meeting on 27/07/2022 was aborted as there would not be a quorum. There is now shown to me a copy of my email of 26/07/2022 annexed herewith and marked as Exhibit “BKL-33”.

As I did not hear from Andrew for more than a week after his 25/07/2022 letter, I emailed Andrew and copied the email to the 1st to 3rd Defendants on 03/08/2022 to call for a Board Meeting to be convened without delay. There is now shown to me a copy of my email of 03/08/2022 to Andrew and copied to the 1st, 2nd and 3rd Defendants annexed herewith and marked as Exhibit “BKL-34”.

Despite my reminder of 03/08/2022, my request as the Plaintiff’s nominated Director to convene a Board Meeting of NEP continued to be ignored. NEP’s failure to hold its AGM for financial years ended 30/06/2021 and 30/06/2022

Apart from not holding any Board Meetings for more than 2 years in breach of Article 42 of NEP’s Articles of Association and Clause 7.5.1 of the Shareholders’ Agreement and in breach of what was decided by the Board of NEP on 06/05/2021, the 1st, 2nd or 3rd Defendants have not convened any AGM of NEP since the 18th AGM of NEP held on 06/05/2021. The previous AGM i.e. the 17th AGM was in fact held more than 3 years before the 18th AGM i.e. on 11/01/2018.

I am advised by the Plaintiff’s solicitors and verily believe that failure to hold the AGM for the Financial Years Ended 30/06/2021 and 30/06/2022 is an offence under Section 340 CA 2016 and exposes NEP to a fine of RM20,000.00 for each offence.

As a result of the 1st, 2nd and 3rd Defendants’ failure and/or neglect to convene the AGMs of NEP, the Plaintiff has been prejudiced and deprived of the opportunity as a shareholder to query the management of NEP on inter alia the performance, business and financial health of NEP and the negative image suffered by NEP and NEP’s subsidiary, AMSB due to allegations made in social media about its failure to pay its business partners.

The failure to hold an AGM of NEP is rendered more serious, prejudicial and suspicious given the 1st, 2nd and 3rd Defendants’ failure, refusal and/or neglect to attend any of the Board Meetings which I have repeatedly called for as a nominated Director of the Plaintiff to no avail.

The Plaintiff has grave and serious concerns about the management of NEP given the fact that the Audited Financial Statements of NEP for Financial Years Ended 2017, 2018, 2019 and 2020 were only circulated and received by the shareholders of NEP on 06/05/2021. The Plaintiff’s concerns about the propriety of the management of NEP is made worse by the fact that there is no indication when the Audited Financial Statement for Financial Years Ended 2021 and 2022 will be prepared let alone be circulated to and received by the shareholders of NEP.

Given the complaints raised in social media about non-payments by Arissto (i.e. AMSB) to its iPartners coupled with the 1 st, 2nd and 3rd Defendants’ failure to convene or attend any of the Board Meetings I had called since May 2021, the Plaintiff has reason to be concerned about the financial health and management of NEP and its subsidiaries under the control of the 1st and 2nd Defendants who together hold a majority stake in NEP and control the management of NEP.

To date, no reason has been given for the Audited Financial Statements of NEP for Financial Years Ended 2021 and 2022 not being available and circulated to NEP’s shareholder.

Furthermore, even though the Board of NEP had on 14/09/2020 decided and agreed to have a policy of paying 50% of its profits in dividends, NEP ought to have but failed to declare and pay dividends for the profits of NEP for Financial Year Ended 2020 which recorded a PAT of RM19.866 million.

As at date hereof, neither NEP nor any of the 1st to 3rd Defendants have taken any steps to cause NEP to declare dividends to the shareholders in breach of the Board’s decision and policy to pay 50% of its profits as dividends. Class Action Suit against NEP, Arissto and the 1st Defendant by iPartners

On 12/07/2022, I received an email from the Company Secretary of NEP in my capacity as a director of NEP, attaching a copy of a Writ and Statement of Claim filed in the Kuala Lumpur High Court Suit No. WA-22NCvC-355-06/2022 filed by 22 iPartners in a class action against NEP, AMSB and the 1st Defendant claiming for inter-alia unpaid commission totaling RM1,085,975.00, special damages in the sum of RM1,381,314.40, general, exemplary and aggravated damages based on fraudulent misrepresentation, fraudulent trading, fraud/evasion of liability and conspiracy to defraud (collectively “iPartners Writ”). There is now shown to me a copy of the said email of 12/07/2022 and the said iPartners Writ and Statement of Claim annexed herewith and collectively marked as Exhibit “BKL-35”.

As AMSB is a 100% owned subsidiary of NEP, I was very concerned since the allegations of non-payment by AMSB, if true, would suggest that AMSB is either financially distressed or AMSB is not properly managed or both. At this stage, it is useful to provide a brief background of the Arissto iPartner Program. To the best of my knowledge: -

NEP through AMSB had marketed and promoted “Arissto iPartner” whereby in consideration of an upfront license fee of RM2,980.00, investors (“iPartner”) are required to purchase a minimum of 5 units (and up to 30 units) of Arissto coffee machines from AMSB at a special dealer offer price of RM799.00 per unit for a period of 1 year with a five years free maintenance and warranty.

In return, the iPartner has the options of selling the Arissto coffee machines above RM799.00 to:

any persons or third parties (“iPartner Customers”); or

any persons or third parties provided by AMSB (“Company Customers”) with the sole purpose of the iPartner Customers or the Company Customers purchasing Arissto coffee capsules from AMSB.

The iPartner is then entitled to inter alia commissions at the rate of 10% to 20% of the total value of the Arissto coffee capsules purchased by the iPartner Customers or at the rate of 6.5% of the total value of the Arissto coffee capsules purchased by the Company Customers. There is now shown to me a printout from AMSB’s website (https://arissto.com/my/ipartner-terms-conditions/) setting out the terms and conditions for the “Arissto iPartner” programme annexed herewith and marked as Exhibit “BKL-36”.

As early as 19/07/2021, I was aware of complaints on social media and internet that AMSB failed to pay commission to its iPartner. There is now shown to me some of the Facebook screenshots and printout from the internet regarding the complaints annexed herewith and collectively marked as Exhibit “BKL-37”.

Although these complaints were brought to NEP’s and the 1st Defendant’s attention since 19/07/2021, neither NEP or AMSB put an end to all these complaints nor held any board meeting to deliberate and resolve the complaints.

The Plaintiff had more concerns about the management of NEP and AMSB after I received the iPartners Writ.

Despite my repeated efforts to convene a Board Meeting at NEP level to inter alia find out more about the claims in the iPartners Writ, neither the 1st, 2nd or 3rd Defendants have bothered to attend or agree to attend the Board Meeting I called.

Given the 1st to 3rd Defendants’ refusal to convene and/or attend Board Meetings despite repeated calls by me as the representative of the Plaintiff and the fact that the Audited Financial Statements for Financial Years Ended 2021 and 2022 have yet to be presented to the shareholders at an AGM, the Plaintiff has good reason to believe that there is mismanagement and/or misconduct by the 1st Defendant in the management of NEP and its subsidiary, AMSB. … DETRIMENT AND PREJUDICE TO VSIB

Even though NEP and the 1st, 2nd and 3rd Defendants as directors were aware that I had on behalf of VSIB repeatedly called for a board meeting to be held, neither NEP nor the 1st, 2nd or 3rd Defendants took any steps to convene a board meeting for the last 2 years. In fact, the 1st, 2nd and 3rd Defendants have frustrated the Plaintiff’s attempts, through me as its representative, to have a Board Meeting by refusing, failing and/or neglecting to turn up for the proposed Board Meeting or simply not making themselves available for any proposed Board Meeting.

VSIB is highly concerned that NEP and/or the 1st, 2nd and 3rd Defendant as directors have in breach of their statutory duties and/or the Constitution of NEP and/or the Shareholders’ Agreement, failed refused and/or neglected to: -

hold any AGM for financial years ended 30/06/2021 and 30/06/2022;

circulate the Audited Financial Accounts for financial years ended 30/06/2021 and 30/06/2022 to the shareholders and table it at the AGM of NEP; and/or

convene any Board Meetings for more than 2 years i.e. since 06/05/2021.

By NEP’s and/or the 1st, 2nd and 3rd Defendants’ aforesaid failure, refusal and/or neglect, VSIB has been denied of its statutory rights as a member of NEP: -

to know the financial position, performance and health of NEP and its subsidiaries, in particular the serious and damaging allegations against NEP and AMSB by various iPartners;

to ask the Directors and management to explain the affairs of

to vote on the election or re-election of directors. 106. As matters stand, VSIB has been kept in the dark as to the financial state and health of not only NEP but the financial state and health of NEP’s 16 subsidiaries for more than 2 years.

By reason of the failure, neglect and or refusal of the Board (which is controlled by the 1st Defendant) to comply with the statutory requirements as set out above, NEP is unnecessarily exposed to penalties and sanctions by the authorities and by extension, the Plaintiff’s rights as a shareholder is prejudiced.

VSIB, having invested RM60,000,000.00 to purchase a 20% stake in NEP in 2016 owes a duty to its shareholders who are members of the public to protect its RM60,000,000.00 investment into NEP.

The Plaintiff’s rights as a shareholder of NEP have been blatantly violated and ignored by the 1st Defendant who is abusing his majority controlling interest in NEP to the extent that VSIB’s statutory rights to attend the AGM of NEP and to have the audited financial statements circulated for FYE 2021 and 2022 have also been violated and rendered meaningless.

Furthermore, dividends which ought to have been declared and paid in respect of the PAT of NEP for Financial Year Ended 30/06/2020 (i.e. 50% of the RM19,866,000.00) have not been declared let alone paid to the shareholders. No explanation has been given for NEP’s delay in declaring the dividends for Financial Year Ended 30/06/2020.

This failure coupled with the fact that NEP, NEP’s subsidiary, AMSB and the 1 st Defendant, Lim Chang Huat have been sued for failure to pay its iPartners gives rise to serious concerns about the financial health and quality of the management of NEP and its fully owned subsidiary, AMSB.

It is clear that VSIB’s (and my) efforts to find out more about the goings on of NEP have been and continue to be thwarted by NEP through its other directors namely the 1st to 3rd Defendants who have failed, refused and/or neglected to attend at Board Meetings which I, as the representative director of the Plaintiff, had called for.

Given the fact that the 1st Defendant has consistently and continuously resisted all of VSIB’s legitimate attempts to find out more on the financials of NEP, refused to hold any Board of Directors’ Meeting for the issues and matters to be candidly discussed, I aver that there is no more trust on the part of the Plaintiff vis-à-vis the 1st to 3rd Defendants. Speaking for VSIB (and myself), the relationship has broken down irretrievably to the extent that the Plaintiff and I no longer trust the 1st Defendant and by extension, the 2nd and 3rd Defendants’ management of NEP’s business.

By reason of the matters aforesaid, in particular the Defendants’: -

failing and/or refusing to call for a Board of Directors’ Meeting of NEP for more than 2 years despite my numerous requests to do so;

failing and/or refusing to use all reasonable endeavors to procure that a quorum is present in the first place to convene a Board of Directors’ Meeting when I as a representative director of the Plaintiff requisitioned for such a meeting much less endeavoring that there is a quorum throughout the meeting of the Board when decisions of the board are made and voted upon;

failing and/or refusing to call and/or hold NEP’s AGM for

failing and/or refusing to declare and pay dividends for

failing to make available the Audited Financial Statements of NEP for Financial Years Ended 2021 and 2022. The Plaintiff has reason to believe that the affairs of NEP are being conducted and/or the powers of the directors are being exercised in a manner oppressive to the Plaintiff (and me) and/or in disregard of the Plaintiff’s (and my) rights. I further aver that the aforesaid actions of the Defendants are prejudicial to the interest of the Plaintiff as a shareholder of NEP.

I am advised by VSIB’s solicitors and verily believe that in view of the lack of visibility as to the financial position of NEP, the Plaintiff ought not to seek an order for a buyout by the 1st and 2nd Defendants. For the same reason, I am advised by VSIB’s solicitors and verily believe that it would be in the interest of justice for NEP to be ordered to be wound up and two private liquidators be appointed to investigate into the affairs of NEP.

Datuk Ooi Woon Chee …and Mr. Wong Ching Yong …, who are respectively approved and licenced liquidators and partners of DC Restructuring Solutions PLT, have given their consent to act at the joint and several liquidators of NEP. …. CONCLUSION In the circumstances, I respectfully pray for an order in terms of the Originating Summons and for the appropriate further Orders to be granted to remedy VSIB's complaints. [Emphasis added] The Pleaded defence of the 1st, 2nd and 4th defendants [35] The 1st, 2nd and 4th defendants in their reply affidavit dated 27-12-2023 [Enclosure 114] gave bare denials to the allegations made by the plaintiff. No evidence was exhibited to support their denials or that they had provided the financial documents or called for the meetings of the Board of directors or AGMs of NEP. [See paragraphs 31 to 45 of the 1st, 2nd and 4th defendants’ reply affidavit dated 27-12-2023 in Enclosure 114]. The Pleaded defence of the 3rd defendant [36] The 3rd defendant in his reply affidavit dated 28-12-2023 [Enclosure 29/117] does not deny the allegations made by the plaintiff. [37] In a mere 4 paragraphs his only substantive comments are that he is only a nominated director of the 1st defendant, he is a director merely holding an honourary position and attends meetings only when asked to attend and has no knowledge of all things. [38] I now move to consider the law relevant to the issues before me. Section 346 CA 2016 [39] In Malaysia, the protection of shareholders and debenture holders of a company is governed by section 346(1) CA 2016. [40] Section 346[1] CA 2016 gives a member or debenture holder of a company remedies from oppression, disregard of his interests, an act of the company which unfairly discriminates against or is otherwise prejudicial to him. [41] Section 346 CA 2016 reads as follows-Remedy in cases of an oppression “(1) 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.”

If on such application the Court is of the opinion that either of those grounds is established, the Court may make such order as the Court thinks fit with the view to bringing to an end or remedying the matters complained of, and without prejudice to the generality of subsection (1), the order may-

direct or prohibit any act or cancel or vary any transaction or resolution;

regulate the conduct of the affairs of the company in the future;

provide for the purchase of the shares or debentures of the company by other members or debenture holders of the company or by the company itself;

in the case of a purchase of shares by the company, provide for a reduction accordingly of capital of the company; or

provide that the company be wound up. [Emphasis added] The law on section 346 CA 2016 [42] Section 181 CA 1965 is the predecessor of section 346 CA 2016. The courts have held that Malaysian cases decided in respect of section 181 CA 1965 apply equally to actions brought under the new section 346 CA 2016. [See Thirumaran Sinnahiah v Fji Lead Sdn Bhd & Ors [2021] 1 LNS 2126 HC at [11], per Vazeer Alam Mydin Meera J]. The origins of section 181 CA 1965 on the protection of minority shareholders and debenture holder of a company [43] The locus classicus on section 346 CA 2016 [and its predecessor section 181 CA 1965] is the Privy Council decision of Re Kong Thai Sawmill (Miri) Sdn Bhd [1978] 2 MLJ 227; [1978] 1 MLRA 235 which is an appeal from the Federal Court of Malaysia. [44] Lord Wilberforce (delivering the judgment of the Board) analysed the legislative history and emphasised the wide scope of section 181 CA 1965 and said-This section can trace its descent from section 210 of the United Kingdom Companies Act, 1948 which was introduced in that year in order to strengthen the position of minority shareholders in limited companies. It also resembles the rather wider section 186 of the Australian Companies Act,

But s. 181 is in important respects different from both its predecessors and is notably wider in scope than the United Kingdom section. In sub-section

(1)(a) it adds disregard of the interests of members, etc to oppression as a ground for relief in this respect making explicit what was already inherent in the section … It introduces a new ground in sub-section (1)(b) and, most importantly, in sub-section (2), which sets out the kinds of relief which may be granted, it provides for "remedying the matters complained of" and states as a specific type of relief that of winding-up of the company. Section 210 is differently constructed. Under it, the court is required to find that the facts would justify the making of a winding-up order under the "just and equitable" provision in the Act, but also that to windup the company would unfairly prejudice the "oppressed" minority. The Malaysian section, on the other hand, requires (under sub-section 1(a) a finding of "oppression" or "disregard", and then leaves to the court a wide discretion as to the relief which it may grant, including among the options that of winding the company up. That option ranks equally with the others, so that it is incorrect to say that the primary remedy is winding-up. That may have been so before 1948 and even after the enactment of s. 210, but is not the case under s. 181. Their Lordships consider it important that courts applying s. 181 should do so according to its terms and its purpose and should not regard themselves as necessarily bound by United Kingdom decisions, which are based upon a different section, and in some cases restrictive. The same applies, though with less force, to reliance upon Australian decisions upon s.

… Secondly, for the case to be brought within s. 181(1)(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 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. 195249): 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 …). 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. Thirdly, in a number of United Kingdom decisions it has been held that for s. 210 to apply the complainant must show oppression continuing up to the date of proceedings (e.g. Re Jermyn Street Turkish Baths Ltd. [1971] 1 WLR 1042); where there has been oppression in the past, the section does not bite. Their Lordships agree that the wording of the section (and the same is true of s. 181(1)(a) relates to a present state of affairs: "are being conducted", powers "are being exercised" are grammatically clear: the language may be contrasted with that of s. 181(1)(b) which refers to an act of the company which has been done or threatened. But this argument must not be taken too far. What is attacked by sub-section (1)(a) is not particular acts but the manner in which the affairs of the company are being conducted or the powers of the directors exercised. And these may be held to be "oppressive" or "in disregard" even though a particular objectionable act may have been remedied. A last minute correction by the majority may well leave open a finding that, as shown by its conduct over a period, a firm tendency or propensity still exists at the time of the proceedings to oppress the minority or to disregard its interests so calling for a remedy under the section. This point is well brought out in Re Bright Pine Mills Pty. Ltd. [1969] VR 1002, 1011-2. [Emphasis added] [45] The test to make out a case of oppression by the Privy Council in Re Kong Thai Sawmill (Miri) Sdn Bhd [1978] 2 MLJ 227 has been accepted by our Federal courts in Pan-Pacific Construction Holdings Sdn Bhd v Ngiu-Kee Corp (M) Bhd & Anor [2010] 6 CLJ 721 FC and in Looh Siong Chee v Numix Engineering Sdn Bhd & Ors And Other Appeals [2015] 7 CLJ 561 FC. [46] From decided cases, the principles that can be distilled for a case of relief under section 346(1) CA 2016 are-i. The member or debenture holder of a company must identify and prove “oppressive conduct” or “conduct in disregard of interests” or “an act which unfairly discriminates” or “an act which is prejudicial” to him. [See Ho Sue San @ David Ho Sue San v Hovid Berhad and 2 others [2024] CLJU 1353 CA at (29)]. ii. For “oppression”, there must be a visible departure from the standards of fair dealing and a violation of the conditions of fair play of which a shareholder or debenture holder of a company is entitled to expect. iii. For “disregard”, there must be awareness of the minority interest of the member or the rights of the debenture holder of and an evident decision to override it or brush it aside or to set at naught the proper company procedure. iv. “Oppression” or “disregard” does not need to be shown by 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. v. the basic theme is “unfairness” and must be applied judicially and fairness means “commercial fairness” in the context of a commercial relationship, not whatever the judge happens to think fair. Since keeping promises and honouring agreements is the most important element of commercial fairness, the starting point will be to ask whether the conduct of which the shareholder or debenture holder complains was in accordance with the articles of association. [See Ho Sue San @ David Ho Sue San v Hovid Berhad and 2 others [2024] CLJU 1353 CA at (40)] vi. the term “disregard of interests” is to be understood to mean “unfair disregard” while “oppression” denotes an “unfairly prejudicial conduct which means a conduct departing from standards of fair dealing and violation of conditions of fair play. vii. the member or debenture holder of a company need not show oppression continuing up to the date of proceedings. There can be "oppression" or "in disregard of interests" even though a particular objectionable act may have been remedied. A last-minute correction by the majority may well leave open a finding that as shown by its conduct over a period, a firm tendency or propensity still exists at the time of the proceedings to oppress the member or debenture holder of a company or to disregard its interests so calling for a remedy under the section. viii. Decisions from jurisdictions like India, United Kingdom and Australia on oppression legislation are useful guidance but should be applied with caution as their scope and ambit are slightly different from our section 346 CA 2016. ix. Decisions from Singapore courts are useful guidance as the wording of their section 216 [1] and [2] Companies Act 1967 are similar to our section 346 CA 2016, save for one relief where the Singapore court is expressly authorised to give the remedy of “authorise civil proceedings to be brought in the name of or on behalf of the company by such person or persons and on such terms as the Court may direct.” [See section 216 [2] [c] Singapore Companies Act 1967]. Issues before the court [47] As I see it, the issues before me are whether the plaintiff has made out a case for relief under section 346[1] CA 2016 based on the following [undisputed] breaches by the 1st to 3rd defendants as at June 2023- i. The failure to hold a Board Meeting of NEP since 06-05-2021 despite the plaintiff’s numerous requests to do so; ii. The failure to call or convene NEP’s Annual General Meeting (“AGM”) for the Financial Years Ended (“FYE”) 30-06-2021 and 30-06-2022. NEP’s last AGM was on 06-05-2021; iii. The failure to made available and/or table for approval before the Board of Directors or any AGM of NEP the Audited Financial Statements of NEP for FYE 2021 and 2022; iv. The failure to declare and pay dividend for FYE 30-06-2020 that was decided during NEP’s Board Meeting of 14-09-2020; v. The failure to disclose information pertaining to the financial affairs of NEP from 2021 after the plaintiff had obtained accounting records up to 2020 pursuant to an Inspection Order obtained by a court order dated 10-06-2022; and vi. Serious allegations have been made against the 1st defendant by members of the public who were induced to invest and become iPartners in NEP’s subsidiary. The 1st defendant has completely shut out the plaintiff in responding to these serious allegations. [See Enclosure 58 plaintiff’s written submissions at paragraph 2] 1 Failure to hold any board meeting since 06-05-2021. 2 No AGMs for FYE 30-06-2021 and 30-06-2022. 3 Audited financial statements for FYE 2021 and 2022 have not been made available and/or tabled. Facts [48] The facts are undisputed there was a failure to hold any board meeting since 06-05-2021, no AGMs for FYE 30-06-2021 and 30-06-2022 and no audited financial statements for FYE 2021 and 2022 have been made available and/or tabled. [49] The last audited Financial Statements of NEP lodged with the Companies Commission of Malaysia (“CCM”) was for FYE 30-06-2020 (tabled on 06-05-2021, which was the last held AGM of NEP) as clearly shown in the CCM search dated 20-06-2023. [See Exhibit “BKL-1” at page 100 of the AIS in Enclosure 2] Law [50] Every member of a company has a right to attend any general meetings of the company, to speak at such meetings and to vote. The right to vote is one of a member’s fundamental rights. It is indeed through his vote that his voice is heard in the company’s affairs. Therefore, when the majority in control of a company refuses to convene an AGM there is an oppressive conduct for the purposes of section 346 of the CA

[51] In Khoo Peng Lai v Tan Ah Hin & Ors [2013] 10 CLJ 347 one of the oppressive acts complained of was the respondents’ failure to call for an AGM. Hanipah Farikullah J held that the failure of the board of directors to have an AGM called annually amounts to mismanagement and oppressive conduct for the purposes of section 181 CA 1965. [52] In Chiew Sze Sun v Cast Iron Production Sdn Bhd & 4 Ors [1994] 1 CLJ 157 Dr Zakaria Yatim J held that there was oppression and a disregard of the petitioner’s interest as the audited accounts for 1981 were only made available in 1987 and the failure to submit the accounts for the years 1981 to 1986 were clear evidence of mismanagement of the financial affairs of the 1st respondent. The respondents had clearly acted in total disregard of the interests of the petitioners. [53] In Re Chi Liung & Son Ltd; Tong Chong Fah v Tong Lee Hwa & Ors [1968] 1 MLJ 97 Gill J held that- “If the company is doing something which is ultra vires its powers, then there is oppression because it deprives the minority of shareholders of their rights as members of the company to have its affairs conducted in accordance with its articles of association. [see Re H.R. Harmer Ltd [1959] 1 WLR 62]. [54] In Ho Yaw Ming v Ho Yau Hong and Others [2022 1 LNS 655 at [23 - 27] the High Court cited and applied Re Coroin Ltd [2013] 2 BCLC 583, where Arden LJ held that the failure to file audited accounts and hold AGMs were unfair to the plaintiff’s rights as a shareholder and would constitute oppression and disregard of the plaintiff’s interest as a shareholder. [55] In Re a company (No 00789 of 1987), ex parte Shooter, Re a Company (No 3017 of 1987), Ex parte Broadhurst and others [1990] BCLC 384 at 386 - 393- i. A controlling shareholder who was the chairman of the board ran the company without regard to formalities, with accounts not prepared and AGMs not held. ii. In assessing whether the company’s affairs were being conducted in a manner which is unfairly prejudicial to the interest of some members, Harman J held that the repeated failure to hold AGMs or to lay accounts before members, had resulted in members being wholly deprived of any opportunity to consider the affairs of the company, to vote on the election or re-election of directors, or to know what was going on. iii. Harman J held that these conducts, which would deprive members of their right to know and consider the state of the company and its directorships, and to ask questions of its directors, are conducts prejudicial to the interests of members of the company. [56] In Tan Kian Hua v Colour Image Scan Sdn Bhd & Ors 2004] 6 CLJ 174 HC, the Court ordered the company to be wound up arising from oppression. Amongst the oppressive acts were irregular financial transactions, denial of access to the company’s accounts and non-declaration of dividends. [57] In the Hong Kong High Court case of Tse Yun Lam Aries (formerly known as Tse Chee Lam Aris) v Haine International Investment Consultants Limited & Ors [2024] HKCU 3138 at [141, 146 and 154], the court held that the failure to call any AGMs, to prepare audited financial statements [“AFS”] and to lay such AFS at an AGM were in breach of the Hong Kong Companies Ordinance and amount to acts of oppression. No dividend for FYE 30-06-2020 Facts [58] Dividends are payments a company makes to its shareholders when it has a profit. [59] It is not denied by the defendants that during NEP’s Board Meeting of 14-09-2020, the Board has decided and agreed to adopt a policy of paying 50% of its profits after tax (“PAT”) in dividends for FYE 2020. [See Exhibit “BKL-9”, paragraph 11.1(a) of the Board Minutes at page 304 of the AIS in Enclosure 2.] [60] It is also not denied by the defendants that NEP’s PAT for FYE 2020 is RM 19.866 million. [See Exhibit “BKL-1” – CCM search dated 20-06- 2023 at page 100 of the AIS in Enclosure 2 showing that NEP’s PAT is RM 19.866 million.] [61] After investing RM 60 million in NEP and becoming a 20% shareholder, it is reasonable for the plaintiff to expect that NEP will pay dividend when there are substantial profits of almost RM 20 million for FYE

[62] To date, there is no Directors’ Resolution declaring dividends to be paid for FYE 30-06-2020 in breach of the Board’s decision and policy decided during the Board Meeting of 19-04-2020 to pay 50% of NEP’s PAT as dividends. Law [63] A failure to declare dividends out of profits can amount to oppressive conduct and/or conduct in disregard of shareholders’ interest. This can be seen from these cases-i. Chiew Sze Sun v Cast Iron Production Sdn Bhd & 4 Ors [1994] 1 CLJ 157 per Dr Zakaria Yatim J where the Court held that the failure to declare dividends constituted an oppressive conduct and a total disregard of the interests of the petitioners as shareholders. ii. Eric Lau Man Hing v Eramara Jaya Sdn Bhd & Ors [1998] 3 CLJ Supp 12471 where there was substantial profits of more than RM 5 million but there had not been any payment of dividends. iii. Gee Hoe Chan Trading Co. Pte. Ltd., Re [1992] 4 CLJ (Rep) 383 where the Court held that the petitioners who held 40% shares were deprived of dividends. iv. Low Chee Kwong v Low Cheong & Sons Sdn Bhd & Ors [2017] MLJU 1982 where the Court held that the failure to pay dividends connotes oppression. Defence advanced by the 3rd defendant [64] Mr. Kenneth Gomes counsel for the 3rd defendant in his written submissions dated 01-04-2024 in Enclosure 62/127 and in his reply written submissions dated 06-04-2024 in Enclosure 64/129 does not deny the facts contained in the oppressive grounds cited by the plaintiff. [65] Instead the 3rd defendant absolves himself from any breach of duty as a director and pushed all blame to the 1st, 2nd and 4th defendants on the ground that he is only a nominee independent director of the 4th defendant with no executive powers or shareholding in the 4th defendant; and in no position to call for a Board of Directors meeting or to compel the 4th defendant to complete and file the Audited Accounts of the 4th defendant. Analysis of the defence advanced by the 3rd defendant [66] I reject the gaji buta defence of the 3rd defendant. It is a misconceived submission. [67] The Court of Appeal in Zaheran Hj Zakaria v Redmax Sdn Bhd & Other Appeals [2016] 5 MLJ 9130 CA, per Abang Iskandar JCA held in strong terms that: - [60] This case against the first defendant had illustrated in no small measure, the duty of a director to his company, being his principal. He was a fiduciary and as one, he owed a duty to protect the interests of his principal. In short, he must never act in any manner that would put his company in harm’s way. He must not act in any manner that would be detrimental to the company’s interests. We had occasion to advert to this duty of a director when we were dealing with the appeal pertaining to the second defendant. Nevertheless, we felt rather compelled here to emphasise the duty cast upon a director by adverting to a decision of this court in the case of Dato’ Abul Hasan bin Mohamed Rashid v Multi-Code Electronics Industries & Anor [2012] 5 MLJ 176; [2012] 1 LNS 258, where it was held, among others, as follows:

the directors must act bona fide in the interests of the company and must not exercise their powers for any collateral purpose;

a director who, by using his position, makes a profit is liable to account for that profit; and

where a director finds himself in a position where his duty to the company and his personal interests’ conflict, any contract entered is voidable at the instance of the company. [61] Further, there is that statutory provision as contained in the Companies Act 1965 as encapsulated under s 132 therein. For impact, we now reproduce s 132 of the Companies Act 1965 which reads as follows:

A director of a company shall at all times exercise his powers for a proper purpose and in good faith in the best interest of the company.

A director of a company shall exercise reasonable care, skill and diligence with-

the knowledge, skill and experience which may reasonably be expected of a director having the same responsibilities; and

any additional knowledge, skill and experience which the director in fact has. [62] In other words, a director of a company has to give his all to serve in the best interest of the company of which he is a director. As a fiduciary, the company is backed up by the statutory provision to expect nothing less from its directors. Gone are the days when a company director can be heard to say that he was a sleeping director and expect to escape liability. His duty may appear onerous but that is to be expected as he is part of the alter ego of the company. He is a fiduciary, a trustee. It is not his business to act like a rogue, much less to act to the detriment of the company. [Emphasis added] [68] In Ravichantiran A/L Ganesan v Percetakan Wawasan Maju Sdn Bhd & Ors [2008] 8 MLJ 45031 the High Court cited the following passage from a Singapore Court of Appeal’s decision- “… every director of a company, regardless of whether he has an executive or non-executive designation, has fiduciary duties and legal responsibilities to his company”. [Emphasis added] [69] In Lembaga Kumpulan Wang Simpanan Pekerja v Adorna RMIT Sdn Bhd & 9 Ors [2003] 4 MLJ 729 the High Court held that- “Directors are alter ego of a company. It is therefore not appropriate for a director to attempt to escape culpability by pleading that he is a sleeping partner or director or a silent director or a non-executive director.” [Emphasis added] Conclusion on plaintiff’s claim under section 346[1] of the CA 2016 [70] For the reasons set out above, I find that the plaintiff has proven its case under section 346[1] of the CA 2016 that the 1st, 2nd and 3rd defendants have conducted and/or are conducting the affairs of NEP and/or are exercising their powers as directors in a manner oppressive or unfairly prejudicial to the plaintiff and/or in disregard of the plaintiff’s interest as a member of NEP. What is the appropriate relief to give to the plaintiff? Section 346[2] of the CA 2016 [71] What is the most appropriate relief to give to the plaintiff in the circumstances of this case? Section 346[2] of the CA 2016 provides:

If on such application the Court is of the opinion that either of those grounds is established, the Court may make such order as the Court thinks fit with the view to bringing to an end or remedying the matters complained of, and without prejudice to the generality of subsection (1), the order may-

direct or prohibit any act or cancel or vary any transaction or resolution;

regulate the conduct of the affairs of the company in the future;

provide for the purchase of the shares or debentures of the company by other members or debenture holders of the company or by the company itself;

in the case of a purchase of shares by the company, provide for a reduction accordingly of capital of the company; or

provide that the company be wound up. Each relief ranks equally. Court has a wide unfettered discretion [72] Under section 346 [2] of the CA 2016 each relief ranks equally. The Court has a wide unfettered discretion to grant reliefs and such relief can be one that is not prayed for by the plaintiff. A court determining an oppression claim is not bound by the reliefs the petitioner prefers or insists on, but is at liberty to fashion the remedy in accordance with the factual matrix of the case. [See Auspicious Journey Sdn Bhd v Ebony Ritz Sdn Bhd & Ors [2021 3 MLJ 549 FC and Low Peng Boon v Low Janie and others and other appeals [1999] 1 SLR(R) 337, Singapore Court of Appeal] [73] The remedy granted would depend on the complaint and the circumstances prevailing at the time of the hearing, not at the start of the proceedings. [74] In Auspicious Journey Sdn Bhd v Ebony Ritz Sdn Bhd & Ors [2021 3 MLJ 549 FC, the Federal Court said via Nallini Pathmanathan FCJ: [151] A court determining an oppression claim is not bound by the reliefs the petitioner prefers or insists on, but is at liberty to fashion the remedy in accordance with the factual matrix of the case see (Low Peng Boon v Low Janie [1999] 1 SLR 337, Re Gee Hoe ChanTrading Co Pte Ltd [1991] 3 MLJ 137 and Lim Swee Khiang v Borden Co (Pte) Ltd [2006] 4 SLR(R) 745). The remedy granted would depend on the complaint and the circumstances prevailing at the time of the hearing, not at the start of the proceedings; see; ReVia Servis Ltd Skala v Via Sevis Ltd and another [2014] All ER (D) 180 (Sep), at [80] and Re Hailey Group Ltd [1993] BCLC 459 at 473]. [ emphasis added] [75] In Low Peng Boon v Low Janie and others and other appeals [1999] 1 SLR(R) 337, the Singapore Court of Appeal ordered the winding-up of the company for oppression even though it was not sought by the plaintiff. [76] LP Thean [delivering judgment for the court] said: 55 Each of the remedies enumerated therein ranks equally: Re Kong Thai Sawmill (Miri) Sdn Bhd ([43] supra) at 233 per Lord Wilberforce and Kuah Kok Kim v Chong Lee Leong Seng Co (Pte) Ltd [1991] 1 SLR(R) 795. The court has an unfettered discretion to make such order as it thinks most appropriate. Each case has to be considered on its own merits. 56 ECPK and its operating subsidiaries are a prosperous group of companies, and in normal circumstances an order requiring the oppressive majority (in this case LPB and LKG) to buy the shares of the oppressed minority (in this case JL) is an appropriate order. But this is a very unusual case and there are other considerations which we should bear in mind in determining the appropriate remedy. This is a family company which has been operating for several decades. The strength of the company lies in the unity and commitment of each member of the family to advance the interests of the family business. Once, however, there is a rift in the family, it may or would no longer be feasible for the business to continue. The Group has been managed and run by LPB, LKG, LKS and JL. LPB is about 85 years old, half paralysed and wheelchair-bound, and is hardly in a position to manage and run ECPK and its subsidiaries. Notwithstanding that, he is not asking for a winding-up order. Subject to the determination of an appropriate price and presumably subject to the court granting him an order authorising the necessary financial assistance to be provided by ECPK to enable him to buy the shares, he is in favour of buying the shares of JL. Be that as it may, we do not think that he could effectively run the Group without the assistance of LKG and probably LKS. Further, we do not expect that he would be able to change his management style and temperament; he would remain autocratic and domineering and a dominant figure at board and management levels and would continue to deal with the affairs of ECPK and its subsidiaries as though these companies were all under his sole proprietorship. … Conclusion 60 In our judgment, in the very unusual circumstances of this case, the appropriate remedy to be made is a winding up-order and such an order is in the interest of ECPK as a whole. [Emphasis added] [77] In the Hong Kong High Court case of Tse Yun Lam Aries (formerly known as Tse Chee Lam Aris) v Haine International Investment Consultants Limited & Ors [2024] HKCU 3138 at [156, 162 and 168], the court set out factors which justify granting a winding-up order: 156 the court might be reluctant to order a buy-out over winding up where it would be difficult for the valuer to value the shares of the company due to, inter alia, the uncertainties surrounding the financial position of the company… Thus, if a buy-out order would involve the court embarking on a laborious and expensive process requiring a degree of co-operation between the parties which had hitherto been lacking, it would be a factor in favour of winding up relief. …where… the company is a holding company which does not carry on any business of its own but owns an operating and profitable subsidiary, the court is more receptive to making a winding up order. The fact that winding up the holding company may well be to the advantage of the petitioner as the liquidator of the company could sell the subsidiary as a going concern. Thus, it cannot be said that the petitioner is unreasonable to seek winding-up. … 161 …The absence of any AFS prepared in compliance with the… Companies Ordinance … means that it is impossible to assess the fair value of [the company] 162 The only relief available is a winding up order… As the company is an investment holding company, the liquidators can take steps to ascertain the true financial position [of the company] … and to realise the company’s assets… Application to facts [78] The plaintiff has prayed for a winding-up order against NEP. The plaintiff is not asking for the 1st to 3rd defendants to buy out its shares. Neither is this the stand of the 1st to 3rd defendants. In fact, they filed no submissions setting out why I should order a buyout instead of winding up of NEP. [79] In my view, exercising my discretion a winding-up remedy is warranted and justified to bring an end to the plaintiff’s complaints based on the caselaw I have set out above and on these facts: i. NEP is a holding company. ii. The plaintiff who invested RM 60 million to become a minority shareholder has been treated as an outsider with no entitlement to any information in respect of the finances and all the affairs of NEP and its subsidiaries since the last BOD meeting held on 06-05-2021. There were no AGMs for FYE 30-06-2021 and 30-06-2022. Audited financial statements for FYE 2021 and 2022 have also not been made available to the shareholders including the plaintiff. iii. Even after the Inspection Order was obtained on 10-06-2022 (and upheld by the Court of Appeal on 27-09-2023), the defendants failed to comply with the court order. It required an order for committal against the defendants on 24-08-2023 before NEP’s financial documents were furnished to the plaintiff. Whatever financial documents NEP furnished were only up to 2020. iv. With no BOD meetings and AGM held for more than 2 ½ years and continuing to date and absence of financial documents and information from 2021 onwards, the plaintiff is completely unaware of the financial health and performance of NEP and whether NEP is still solvent. v. The 1st to 3rd defendants merely made bare averments that NEP is an ongoing concern without any evidence to prove the same. Nor was there any evidence of the current business and profits of NEP. vi. There would be difficulties of valuing the shares of NEP since it is a non-listed company. vii. LCH has control of NEP’s financial records and management and has refused to accord the plaintiff or DBKL access to the same. Hence, no true and accurate valuation of NEP’s shares can be arrived at. viii. An inference can be drawn that there has been mismanagement of NEP by the 1st to 3rd defendants and irregularities in the finances and affairs of NEP and its subsidiaries given the absence of audited accounts for FYE 2021 and 2022 (and now FYE 30-06-2023), absence of BOD meetings and AGM for more than 2 ½ years and continuing to date, and more alarming, the existence of the iPartners Class Action claiming more than RM 2 million general, exemplary and aggravated damages based on fraudulent misrepresentation, fraudulent trading, fraud/evasion of liability and conspiracy to defraud. ix. Based on the above, any valuation of NEP’s value will not be a true reflection of what the plaintiff ought to be entitled to. x. Any buyout would end up only favouring and benefitting the majority shareholders and the directors (i.e. the 1st to 3rd defendants) of NEP since in an order for a buyout, any wrongdoing by the 1st to 3rd defendants will be swept under the carpet and/or concealed. xi. An order for NEP to be wound up would allow the private liquidators to be appointed for them to investigate into the affairs of NEP. xii. Good corporate governance dictates that any wrongdoing in NEP is investigated thoroughly by the private liquidators to be appointed. Prayer 4 of the OS [80] The plaintiff in its prayer 4 of the OS had prayed for general damages to be assessed and paid by the 1st, 2nd and 3rd defendants to the Plaintiff and/or NEP together with interest from date of the order for damages until date of full settlement. [Emphasis added] [81] Although prayer 4 of the OS was withdrawn by the plaintiff towards the end of the oral submissions, I would like to say a bit on it as useful submissions were made by counsel on the two issues set out below: i. Whether the 1st, 2nd and 3rd defendants as directors of NEP are liable to pay damages to the plaintiff; and ii. Whether the 1st, 2nd and 3rd defendants are liable to pay damages to NEP as NEP is not a plaintiff in this OS. Whether the 1st, 2nd and 3rd defendants as directors of NEP are liable to pay damages to the plaintiff [82] In respect of the issue whether the 1st, 2nd and 3rd defendants as directors of NEP are liable to pay damages to the plaintiff the leading cases in Malaysia are Auspicious Journey Sdn Bhd v Ebony Ritz Sdn Bhd & Ors [2021] 3 MLJ 549 FC [“Auspicious Journey”] and Low Cheng Teik & Ors v Low Ean Nee [2024] 6 MLRA 220 FC [“Low Cheng Teik”]. Whether directors of the company and third parties who had collaborated with them could be held accountable to the minority shareholder [83] The issue in Auspicious Journey before the Federal Court was whether in a petition filed by a minority shareholder under section 181 of the Companies Act 1965 (now section 346 of the Companies Act 2016) for relief against the oppressive, discriminatory or prejudicial manner in which the affairs of the company were run, the directors of the company and third parties who had collaborated with them could be held accountable. [84] The Federal Court gave an affirmative answer and said via Nallini Pathmanathan FCJ at: Held (2) The language of section 181 of the Companies Act 1965 (now section 346 of the Companies Act 2016) was wide enough to encompass compensatory relief against directors and third parties in an appropriate case depending on the facts and circumstances. Pursuant to section 181(2) of the CA 1965 (section 346(2) of the CA 2016) the court was empowered to make such order as it thought fit to bring an end to, or remedy, the matters complained of. The court was not bound by the reliefs sought by the petitioner or restricted to the reliefs mentioned in section 181(2) of the CA 1965 (section 346(2) of the CA 2016) but was at liberty to fashion the remedy in accordance with the factual matrix of the case (see paragraphs 136, 148 & 151); and At Held (6) The following legal test was applicable in assessing whether in any given complaint of oppression, liability had been established against a director and/or a third party (see paragraphs 127 - 128):

whether there was evidence of the director’s or the third party’s deliberate involvement or participation in, or a sufficiently close nexus, to the oppressive or detrimental or prejudicial conduct that the minority complained of;

an objective assessment should be made to determine whether in all the circumstances of the case the imposition of liability was fair and just;

the imposition of liability should be circumspect, going no further than was necessary to remedy the breach complained of or to stop the oppressive or prejudicial conduct;

the imposition of liability must be reasonable and serve to alleviate the legitimate concerns of the shareholders of the company in question; and e) in exercising its powers under section 181 of the CA 1965 (section 346 of the CA 2016) the court should bear in mind general corporate law principles such that director liability did not become a substitute for other statutory relief or under the common law. Oppression action under section 346 of the CA 2016 and derivative action under section 347 of the CA 2016. The Rule against Reflective Loss [85] The issue in Low Cheng Teik before the Federal Court was whether the claim should not have been brought by way of an oppression action under section 346 of the CA 2016 but pursued under section 347 of the CA 2016 as a derivative action. A related issue examined in detailed by the Federal court was “The Rule against Reflective Loss”. [86] A close reading of the leading judgment of Nallini Pathmanathan FCJ gives us the following guidance: i. Where the nature of the act, omission or misconduct is oppressive or unfairly prejudicial to a shareholder, and the resulting injury and loss has been suffered directly and distinctly by the shareholder, as opposed to loss or injury suffered by the company or all the other shareholders, then oppression is made out and the cause of action vests in the shareholder. In such an instance, section 346 provides the remedies available. [See paragraph 95 of Judgment]. ii. If, however, the act, omission or misconduct is an injury done to the company, resulting in a loss to the company, then the cause of action vests in the company and section 347 is the proper remedy to be utilised. This situation arises where the injury causes loss to all shareholders equally. [See paragraphs 96 to 98 of Judgment]. iii. Often a wrong done to the company may concurrently cause harm to its shareholders. For example, the misappropriation of the company’s funds by a majority shareholder will not only harm the company but will also harm its shareholders in the form of a reduction in the value of their shares in the company or in dividends to the shareholders. This type of loss cannot be recovered by the shareholder personally because of the “Rule Against Reflective Loss”. The shareholder’s loss simply “reflects” the company’s loss. [See paragraphs 99 to 100 and 111 of Judgment]. iv. The rationale of avoidance of double recovery to the plaintiff at the expense of the defendant, as the basis for the rule against reflective loss, propounded by Lord Millett in Johnson v Gore Wood & Co [2000] UKHL 65; [2002] 2 AC 1, has been subsequently rejected by the United Kingdom Supreme Court in Sevilleja v Marex Financial Ltd [2020] UKSC 31; [2021] AC 39. [See paragraphs 109 and 110 of Judgment]. v. Consequently, the view expressed by the Federal court in Rinota Construction Sdn Bhd v Mascon Rinota Sdn Bhd & Ors [2018] 1 MLRA 368 FC at [21]] to the effect that “On the “reflective loss” principle as raised by the Court of Appeal in their judgment, we are of the view that this principle can have no application to this case where there is no claim by the company.” ought to be departed from. [See paragraphs 121 to 123 of Judgment]. Whether the 1st, 2nd and 3rd defendants as NEP’s directors are liable to pay damages to NEP as NEP is not a plaintiff in this OS [87] I now move to the 2nd issue. This issue arises as the argument is that a claim for damages to be paid by NEP’s directors to NEP must be by way of the plaintiff filing another writ by way of a statutory derivative action in the name of NEP under section 347 read with section 348 of the CA 2016. [88] This argument was rejected in Automobiles Peugeot SA v Asia Automobile Industries Sdn Bhd & Ors [1988] 3 MLJ 209 HC by Siti Norma Yaakob J who held: To get around this, the second respondent suggests that nothing short of the petitioner filing another writ by way of a derivative action will suffice in the circumstances of this case. By so pleading, the second respondent is in fact giving recognition to the rule in Foss v Harbottle. The injured party in this action is the first respondent and s 181(1) and (2) of the Companies Act 1965, under which this petition is presented and relief sought, was specially enacted to overcome the problem posed by Foss v Harbottle, and to strengthen the position of the minority shareholders in limited companies. Since there is now statutory sanction for a shareholder with a minority interest in a company to institute proceedings against directors from conducting the affairs of the company in a manner prejudicial to the company, there is no longer any need for a derivative action to be filed by the petitioner in the manner suggested by the second respondent as that would amount to a duplicity of actions relating to the same subject matter. In Re Kong Thai Sawmill (Miri) Sdn Bhd, the Privy Council held that under s 181(2) the courts have a wide and an unfettered discretion as to the reliefs they may grant which are in no way limited to those listed in sub-s (2Xa)-

(e). Since a claim for a damages against the second respondent would be a natural consequence should the wrong acts complained of by the petitioner be established, I had concluded that the particular amendment objected to by the second respondent should not prejudice him in any way and that it is necessary in the circumstances to enable the court to determine the issues in dispute between the parties… [89] Automobiles Peugeot SA v Asia Automobile Industries Sdn Bhd & Ors [1988] 3 MLJ 209 HC was cited with approval and followed by the Singapore Court of Appeal in Kumagai Gumi Co Ltd v Zenecon Pte Ltd and others and other appeals [1995] 2 SLR(R) 304 at [67]. [90] In Low Peng Boon v Low Janie and others and other appeals [1999] 1 SLR(R) 337 at [60], the Singapore Court of Appeal ordered the oppressor, as a consequential order to the winding-up of the company, to make restitution to the company of company funds used unlawfully for travelling expenses. [91] The Court of Appeal in Lee Yee Wuen v Lee Kai Wuen & Ors [2020] MLJU 1902 CA per S Nantha Balan JCA also allowed the plaintiff to seek the remedy of restitution of defalcated monies to be repaid to the company as part of the reliefs sought with a view to bringing the acts of oppression to an end: [107] In conclusion, we are impelled to the conclusion that the plaintiff, as the protagonist of the oppression action is entitled in law to seek the remedy of restitution of defalcated monies to be repaid to the company as part of the reliefs sought with a view to bringing the acts of oppression to an end. [Emphasis added] [92] For the reasons above, I hold that the plaintiff has proven its case under section 346 of the CA 2016 and the appropriate remedy is to order the winding-up of NEP and to appoint the two liquidators, who to my knowledge are seasoned and experienced liquidators, as prayed. [93] Lastly, I would like to thank lead counsel for the plaintiff and his team for a very helpful and thorough submissions.

[94] For the OS [Enclosure 1], I make the following orders-i. a declaration that the 1st, 2nd and 3rd defendants have conducted and/or are conducting the affairs of NEP and/or are exercising their powers as directors in a manner oppressive to and/or unfairly prejudicing the plaintiff and/or in disregard to the plaintiff’s interest as a member of NEP; ii. NEP be wound up; iii. Datuk Ooi Woon Chee (Approval No. 01891/03/2024 P) and Mr Wong Ching Yong (Approval No. 01296/07/2025 P) be appointed as joint and several liquidators of NEP; iv. The 1st, 2nd and 3rd defendants to pay jointly and severally costs of RM 80,000 to the plaintiff subject to allocatur. …..……(signed)……….. Leong Wai Hong Judge High Court of Malaya Kuala Lumpur (NCC 6) Dated: 07th February 2025. COUNSEL: 1) S. Sivaneindren, Bong Lep Siong, Joycelyn Teoh, Lim Jing Rui, Jayne Kong and Emilia Ting for plaintiff. (Cheah Teh & Su (Kuala Lumpur)) 2) Sng Eu Kim for 1st defendant, 2nd defendant and 4th defendant. (Sulaiman & Taye (Kuala Lumpur)) 3) Kenneth Gomes for 3rd defendant. (Sabarudin Othman & Ho (Kuala Lumpur)) CASES REFERRED TO: 1) Auspicious Journey Sdn Bhd v Ebony Ritz Sdn Bhd & Ors [2021 3 MLJ 549 FC. 2) Automobiles Peugeot SA v Asia Automobile Industries Sdn Bhd & Ors [1988] 3 MLJ 209 HC. 3) Chiew Sze Sun v Cast Iron Production Sdn Bhd & 4 Ors [1994] 1 CLJ

4) Dato’ Abul Hasan bin Mohamed Rashid v Multi-Code Electronics Industries & Anor [2012] 5 MLJ 176; [2012] 1 LNS 258. 5) Datuk Beh Kim Ling & Anor v. NEP Holdings (M) Bhd [2023] 8 MLJ 81. 6) Eric Lau Man Hing v Eramara Jaya Sdn Bhd & Ors [1998] 3 CLJ Supp 12471. 7) Elder v. Elder & Watson Ltd. 195249. 8) Gee Hoe Chan Trading Co. Pte. Ltd., Re [1992] 4 CLJ (Rep) 383. 9) Ho Sue San @ David Ho Sue San v Hovid Berhad and 2 others [2024] CLJU 1353 CA. 10) Ho Yaw Ming v Ho Yau Hong and Others [2022 1 LNS 655. 11) Johnson v Gore Wood & Co [2000] UKHL 65; [2002] 2 AC 1 12) Khoo Peng Lai v Tan Ah Hin & Ors [2013] 10 CLJ 347. 13) Kuah Kok Kim v Chong Lee Leong Seng Co (Pte) Ltd [1991] 1 SLR(R)

14) Kumagai Gumi Co Ltd v Zenecon Pte Ltd and others and other appeals [1995] 2 SLR(R) 304. 15) Lembaga Kumpulan Wang Simpanan Pekerja v Adorna RMIT Sdn Bhd & 9 Ors [2003] 4 MLJ 729. 16) Lee Yee Wuen v Lee Kai Wuen & Ors [2020] MLJU 1902 CA. 17) Lim Swee Khiang v Borden Co (Pte) Ltd [2006] 4 SLR(R) 745. 18) Low Chee Kwong v Low Cheong & Sons Sdn Bhd & Ors [2017] MLJU

19) Low Peng Boon v Low Janie and others and other appeals [1999] 1 SLR(R) 337. 20) Looh Siong Chee v Numix Engineering Sdn Bhd & Ors And Other Appeals [2015] 7 CLJ 561 FC. 21) Pan-Pacific Construction Holdings Sdn Bhd v Ngiu-Kee Corp (M) Bhd & Anor [2010] 6 CLJ 721 FC. 22) Ravichantiran A/L Ganesan v Percetakan Wawasan Maju Sdn Bhd & Ors [2008] 8 MLJ 45031. 23) Re Bright Pine Mills Pty. Ltd. [1969] VR 1002, 1011-2. 24) Re Chi Liung & Son Ltd; Tong Chong Fah v Tong Lee Hwa & Ors [1968] 1 MLJ 97. 25) Re Hailey Group Ltd [1993] BCLC 459. 26) Re H.R. Harmer Ltd [1959] 1 WLR 62. 27) Re Jermyn Street Turkish Baths Ltd. [1971] 1 WLR 1042. 28) Re Kong Thai Sawmill (Miri) Sdn Bhd [1978] 2 MLJ 227; [1978] 1 MLRA

29) ReVia Servis Ltd Skala v Via Sevis Ltd and another [2014] All ER (D) 180 (Sep). 30) Rinota Construction Sdn Bhd v Mascon Rinota Sdn Bhd & Ors [2018] 1 MLRA 368 FC. 31) Sevilleja v Marex Financial Ltd [2020] UKSC 31; [2021] AC 39. 32) Tan Kian Hua v Colour Image Scan Sdn Bhd & Ors 2004] 6 CLJ 174 HC. 33) Thirumaran Sinnahiah v Fji Lead Sdn Bhd & Ors [2021] 1 LNS 2126 HC. 34) Tse Yun Lam Aries (formerly known as Tse Chee Lam Aris) v Haine International Investment Consultants Limited & Ors [2024] HKCU

35) Zaheran Hj Zakaria v Redmax Sdn Bhd & Other Appeals [2016] 5 MLJ 9130 CA. LEGISLATION REFERRED TO: 1) Companies Act,1965 section 181. 2) Companies Act, 2016 sections 346, 346[1], 346[2] and 347. 3) United Kingdom Companies Act, 1948 Section 210. REPORT REFERRED TO: 1) Report of the Committee on Company Law Amendment [1945], known in short as the Cohen Report. 2) Umakanth Varottil, “Unpacking the Scope Of Oppression, Prejudice And Mismanagement Under Company Law In India,” NUS Law Working Paper 2020/020, July 2020, www.law.nus.edu.sg/wps/.