Tan Choon Yong v Goh Jon Keat: Shareholder Oppression under Companies Act

In Tan Choon Yong v Goh Jon Keat, the High Court of Singapore addressed a claim by Dr. Tan Choon Yong against Mr. Goh Jon Keat and Ms. Tan Hui Kiang for shareholder oppression under Section 216 of the Companies Act. Dr. Tan, a minority shareholder, alleged that the majority shareholders acted oppressively by removing him as CEO and director. The court found in favor of Dr. Tan, citing breaches of fiduciary duty and a deliberate exclusion from management, and ordered the defendants to purchase Dr. Tan's shares or, failing that, for the company to be wound up.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Shareholder Tan Choon Yong sued Goh Jon Keat for oppression under s 216 of the Companies Act. The court found in favor of Tan, citing breaches of fiduciary duty.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Alphomega Research Group LtdDefendantCorporationOrder to purchase shares or company wound upLost
Tan Choon YongPlaintiffIndividualJudgment for PlaintiffWon
Goh Jon KeatDefendantIndividualOrder to purchase shares or company wound upLost
Tan Hui KiangDefendantIndividualOrder to purchase shares or company wound upLost

3. Judges

Judge NameTitleDelivered Judgment
Tan Lee MengJudgeYes

4. Counsels

Counsel NameOrganization
Roy YeoSterling Law Corporation
Ismail AtanNanyang Law LLC
Wendell WongDrew & Napier LLC
Adrian TanDrew & Napier LLC
Sophine ChinDrew & Napier LLC
Mustaffa bin Abu BakarMustaffa & Co

4. Facts

  1. Dr. Tan left CPG Labs to join Alphomega with the understanding he would have a major role.
  2. Mr. Goh and Ms. Tan signed employment contracts with the company without board approval.
  3. Dr. Tan was denied access to company accounts and human resources records.
  4. Mr. Goh and Ms. Tan tried to remove Dr. Tan as CEO shortly after the company was listed.
  5. The company used funds to pay for legal advice for the majority shareholders against Dr. Tan.
  6. Dr. Tan was summarily dismissed as CEO at a board meeting where it was not on the agenda.
  7. KPMG was appointed to conduct a review into the affairs of the company to ascertain whether there is prima facie evidence of fraudulent conduct by Dr Tan.

5. Formal Citations

  1. Tan Choon Yong v Goh Jon Keat and Others and Other Suits, Suit 49/2008, [2009] SGHC 106

6. Timeline

DateEvent
Alphomega Research Group Ltd incorporated
Tan Choon Yong resigned from CPG Labs and joined Alphomega Research Group Ltd as CEO
Alphomega Research Group Ltd applied for listing on Phillip Securities’ Over-The-Counter Capital
Alphomega Research Group Ltd listed on OTC Capital
Meeting between OTC Capital chairman, Dr Tan, Mr Goh, Mr Heng, and Mr Leong to resolve company problems
Mr Goh and Ms Tan instructed the company secretary to issue a Notice of an Extraordinary General Meeting
Dr Tan lodged a report with the Commercial Affairs Department
OTC Capital suspended the trading of the company’s shares
Dr Tan sought and was granted an injunction to restrain Mr Goh and Ms Tan from holding the EOGM
Dr Tan received a notice cancelling the EOGM of 28 January 2008
Dr Tan convened an urgent board meeting
Mr Goh and Ms Tan boycotted the board meeting; Dr Tan and Ms Sim sacked Mr Goh and Mr Leong
Dr Tan summarily dismissed as CEO
Corporate Advisor, Mr MH Tan, resigned
OTC Capital informed the company that its listing would be terminated
Termination of company's listing on OTC Capital
All three actions were consolidated by an Order of Court
Dr Tan and Ms Sim were not re-elected as directors at the company’s annual general meeting
Judgment reserved

7. Legal Issues

  1. Shareholder Oppression
    • Outcome: The court found that the majority shareholders acted oppressively towards the minority shareholder, entitling him to relief under s 216 of the Companies Act.
    • Category: Substantive
    • Sub-Issues:
      • Exclusion from management
      • Breach of fiduciary duty
      • Misuse of company funds

8. Remedies Sought

  1. Winding up of the company
  2. Order for majority shareholders to purchase minority shareholder's shares

9. Cause of Actions

  • Oppression under Section 216 of the Companies Act

10. Practice Areas

  • Commercial Litigation
  • Corporate Law

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Re Jermyn Street Turkish Baths LtdEnglish Court of AppealYes[1971] 1 WLR 1042England and WalesCited as a guide for determining what is generally considered as oppression or a disregard of minority interests under s 216 of the Companies Act.
Scottish Co-operative Wholesale Society v MeyerHouse of LordsYes[1959] AC 324United KingdomCited for the expression 'burdensome, harsh and wrongful' in relation to oppression.
Low Peng Boon v Low JanieCourt of AppealYes[1999] 1 SLR 761SingaporeCited for regarding Re Jermyn as a guide for determining what is generally considered as oppression or a disregard of minority interests under s 216 of the Companies Act.
Re Kong Thai Sawmill (Miri) Sdn BhdPrivy CouncilYes[1978] 2 MLJ 227MalaysiaCited for the principle that majority rule must not pass into oppression of the minority.
Ebrahimi v Westbourne Galleries LtdHouse of LordsYes[1973] AC 360United KingdomCited for the principle that depriving a member of their right to participate in management can justify winding up on just and equitable grounds.
Tay Bok Choon v Tahansan Sdn BhdPrivy CouncilYes[1987] 1 MLJ 433MalaysiaCited for the relevance of the circumstances under which a person became a member of a company when determining oppression.
Kitnasamy s/o Marudapan v Nagatheran s/o ManogarCourt of AppealYes[2000] 2 SLR 598SingaporeCited for the principle that exclusion of a member from management in breach of an understanding justifies relief under s 216.
Chow Kwong Ching v Chow Kwok ChiCourt of AppealYes[2008] 4 SLR 577SingaporeCited for the principle that notice of a board meeting may be called at short notice.
Browne v La TrinidadCourt of AppealYes(1888) LR 37 Ch D 1England and WalesCited for the principle that notice of a board meeting may be called at short notice.
Tang Choon Keng Realty (Pte) Ltd v Tang Wee ChengHigh CourtYes[1992] 2 SLR 1114SingaporeCited for the guideline on how the discretion under s 216 should be exercised.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Section 216 Companies Act (Cap 50, 2006 Rev Ed)Singapore
Penal Code (Cap 224, 1985 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Shareholder oppression
  • Fiduciary duty
  • Legitimate expectation
  • Minority shareholder
  • Majority shareholder
  • OTC Capital
  • Small Offer Document
  • Corporate Advisor

15.2 Keywords

  • shareholder oppression
  • companies act
  • minority shareholder
  • fiduciary duty
  • corporate governance

17. Areas of Law

Area NameRelevance Score
Minority Oppression95
Company Law90
Winding Up70
Fiduciary Duties60
Breach of Contract40

16. Subjects

  • Corporate Governance
  • Shareholder Disputes