GENERAL RESEARCH ON THE ISSUE OF WHETHER THE COURT CAN

ORDER A SHARE BUY-OUT IF OPPRESSION IS NOT FOUND PURSUANT TO

S. 346(2) CA 2016

Firstly, as to whether the Singaporean case of Liew Kit Fah is still a good law, the answer is
in the affirmative. However, a look into a more recent case of Siva Kumar s/o Avadiar v
Quek Leng Chuang and others [2020] SGCA 110, there could be an alternative for a share
buy-out to happen despite no oppression being found. Be that as it may, the procedure would
not be based on the provision of personal remedies in cases of oppression found in the
Companies Act.

In Siva Kumar, the appellant and respondents applied to the High Court to record a Consent
Order upon reaching a settlement. In essence, the Consent Order was for the respondents to
buy-out the appellant's shares, of which the price shall be determined by a mutually agreed
independent valuer. At trial, the appellant filed a suit to set aside the Consent Order. The
appellant relied on Liew Kit Fah to say that share buy-out order cannot be made if no
oppression was found. The Judge in dismissing the case, emphasised that the Consent Order
was not made under S. 216(2) of the Singaporean Companies Act, but was in essence a
freely negotiated transaction akin to one between a willing seller and a willing buyer.

At the appellate court, the Judges agreed with the trial judge's proposition that in the event a
court finds that minority oppression was not made out, it would lack the power to order a
buy-out order under S. 216(2)(d) of the Singaporean Companies Act. Nevertheless, that
does not arise in the context of a consent order for one shareholder to buy out the other in a
situation where the court is not required to make any finding of minority oppression or the
lack thereof.
Therefore, the appeal was dismissed.

In reference to the above-mentioned case, it can be understood that a Consent Order could be
an alternative to have a share buy-out procedure if no oppression is found. The Consent Order
is independent of the Companies Act, thus, there is no necessity to prove the elements of
oppression as the court power under S. 216(2)(d) of the Singaporean Companies Act was
not engaged in the first place.
Applying to the case at hand, it is suggested for the parties to reach a settlement and apply for
a Consent Order for shares buy-out, considering that both parties are agreeing for such
procedure to happen.

Secondly, following UEM's Federal Court case, there is yet a local case that discusses the
same issue. At most, the cases available seems to suggest that it is a condition for an
oppression to be proven before a share buy-out order can be made according to S. 346 CA
2016.

No. Case Relevant Part(s)

1. Toshiba Elevator and Para. 33 (ii):
Building Systems "Before the Court grants relief under s. 346(2) of the
Corporation v Interplex CA, the Court must be satisfied that there are
Sdn Bhd & Ors and grounds proven under s. 346(1) of CA."
another case [2021]
MLJU 362
2. Jet-Tech Materials Sdn Para. 27:
Bhd & Anor v Yushiro "The Malaysian section, on the other hand, requires
Chemical Industry Co (under sub-s 1(a)) a finding of 'oppression' or
Ltd & Ors and another 'disregard' and then leaves to the court a wide discretion
appeal [2013] 2 MLJ 297 as to the relief which it may grant, including the options
that of winding the company up."
3. Tong Chor Say & Ors v Para. 3:
Batang Malaka Rubber "To sustain a successful application under s 181 it is
Estate Sdn Bhd & Ors necessary for the petitioner to prove that the conduct
[2009] 5 MLJ 224 must relate to the petitioner in his capacity as a
member of the company and it must relate to the
conduct of the affairs of the company."

Para. 7:
"Finally, the Court of Appeal held that for the
petitioner to succeed in his application for the said
reliefs, he must show that it was the affairs of the
company which were being conducted in an
oppressive manner, and that the respondent company
had oppressed the minority shareholders which in
this case is the petitioner."