Koh Keng Chew v Liew Kit Fah: Minority Shareholder Oppression & Corporate Governance
In Koh Keng Chew and others versus Liew Kit Fah and others, the Singapore High Court addressed a claim brought by minority shareholders Koh Keng Chew, Koh Oon Bin, and Koh Hoon Lye against majority shareholders Liew Kit Fah, Liew Chiew Woon, Pang Kok Lian, Soh Kim Seng, Soh Soon Jooh, and Poh Teck Chuan, along with several Samwoh Group companies. The plaintiffs alleged oppressive conduct under Section 216 of the Companies Act. While the defendants did not admit to oppressive conduct, both parties agreed that the relationship had broken down, necessitating a buyout. The court was tasked with deciding whether the majority should buy out the minority or vice versa. Ultimately, the court ordered the majority shareholders to purchase the minority shareholders' shares.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Order for the 1st to 6th defendants to purchase the shares of the plaintiffs.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court case regarding minority shareholder oppression. Court ordered majority shareholders to buy out minority shares due to breakdown of trust.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Koh Keng Chew | Plaintiff | Individual | Shares to be purchased by defendants | Lost | Alvin Yeo, Lim Wei Lee, Daniel Tan Shi Min, Catherine Chan |
| Koh Oon Bin | Plaintiff | Individual | Shares to be purchased by defendants | Lost | Alvin Yeo, Lim Wei Lee, Daniel Tan Shi Min, Catherine Chan |
| Koh Hoon Lye | Plaintiff | Individual | Shares to be purchased by defendants | Lost | Alvin Yeo, Lim Wei Lee, Daniel Tan Shi Min, Catherine Chan |
| Liew Kit Fah | Defendant | Individual | To purchase shares of plaintiffs | Won | Francis Xavier, Patrick Ang, Chong Kah Kheng, Amy Seow, Chai Wei Han, Priscilla Soh |
| Liew Chiew Woon | Defendant | Individual | To purchase shares of plaintiffs | Won | Francis Xavier, Patrick Ang, Chong Kah Kheng, Amy Seow, Chai Wei Han, Priscilla Soh |
| Pang Kok Lian | Defendant | Individual | To purchase shares of plaintiffs | Won | Francis Xavier, Patrick Ang, Chong Kah Kheng, Amy Seow, Chai Wei Han, Priscilla Soh |
| Soh Kim Seng | Defendant | Individual | To purchase shares of plaintiffs | Won | Francis Xavier, Patrick Ang, Chong Kah Kheng, Amy Seow, Chai Wei Han, Priscilla Soh |
| Soh Soon Jooh | Defendant | Individual | To purchase shares of plaintiffs | Won | Francis Xavier, Patrick Ang, Chong Kah Kheng, Amy Seow, Chai Wei Han, Priscilla Soh |
| Poh Teck Chuan | Defendant | Individual | To purchase shares of plaintiffs | Won | Francis Xavier, Patrick Ang, Chong Kah Kheng, Amy Seow, Chai Wei Han, Priscilla Soh |
| Samwoh Corporation Pte Ltd | Defendant | Corporation | Neutral | Neutral | Thio Shen Yi, Gordon Lim, Matthias Goh |
| Samwoh Resources Pte Ltd | Defendant | Corporation | Neutral | Neutral | Thio Shen Yi, Gordon Lim, Matthias Goh |
| Samwoh Infrastructure Pte Ltd | Defendant | Corporation | Neutral | Neutral | Thio Shen Yi, Gordon Lim, Matthias Goh |
| Samgreen Pte Ltd | Defendant | Corporation | Neutral | Neutral | Thio Shen Yi, Gordon Lim, Matthias Goh |
| Samwoh Marine Pte Ltd | Defendant | Corporation | Neutral | Neutral | Thio Shen Yi, Gordon Lim, Matthias Goh |
| Samwoh Shipping Pte Ltd | Defendant | Corporation | Neutral | Neutral | Thio Shen Yi, Gordon Lim, Matthias Goh |
| Resource Development Holdings Pte Ltd | Defendant | Corporation | Neutral | Neutral | Thio Shen Yi, Gordon Lim, Matthias Goh |
| Highway International Pte Ltd | Defendant | Corporation | Neutral | Neutral | Thio Shen Yi, Gordon Lim, Matthias Goh |
| Sam Land Pte Ltd | Defendant | Corporation | Neutral | Neutral | Thio Shen Yi, Gordon Lim, Matthias Goh |
| Sam Development Pte Ltd | Defendant | Corporation | Neutral | Neutral | Thio Shen Yi, Gordon Lim, Matthias Goh |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chua Lee Ming | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Alvin Yeo | WongPartnership LLP |
| Lim Wei Lee | WongPartnership LLP |
| Daniel Tan Shi Min | WongPartnership LLP |
| Catherine Chan | WongPartnership LLP |
| Francis Xavier | Rajah & Tan LLP |
| Patrick Ang | Rajah & Tan LLP |
| Chong Kah Kheng | Rajah & Tan LLP |
| Amy Seow | Rajah & Tan LLP |
| Chai Wei Han | Rajah & Tan LLP |
| Priscilla Soh | Rajah & Tan LLP |
| Thio Shen Yi | TSMP Law Corporation |
| Gordon Lim | TSMP Law Corporation |
| Matthias Goh | TSMP Law Corporation |
4. Facts
- Plaintiffs held 28.125% of shares in the 7th to 16th defendants.
- 1st to 6th defendants held the remaining 71.875% of the shares.
- Relationship of mutual trust and confidence between the parties had broken down.
- Parties agreed that the appropriate order was a buyout order.
- Dispute arose over whether the majority or minority should buy out the other.
- Elvin Koh was removed as director and MD of Samwoh Corp.
- Koh HL was excluded from management and Board meetings.
5. Formal Citations
- Koh Keng Chew and others v Liew Kit Fah and others, Suit No 125 of 2014, [2016] SGHC 140
6. Timeline
| Date | Event |
|---|---|
| Samwoh Transport and Trading partnership formed | |
| Wang Nee Chon and Liew Chiew Woon joined Samwoh Trading | |
| Poh Choon Huat joined Samwoh Trading | |
| Samwoh Corporation incorporated | |
| Mr Pang Chok passed away | |
| Pang Kok Lian appointed as a director of Samwoh Corp | |
| Koh Keng Chew stepped down as director of Samwoh Corp | |
| Koh Hoon Lye appointed as a director of Samwoh Corp | |
| Koh Oon Bin joined Samwoh Corp as its general manager | |
| Koh Oon Bin became managing director of Samwoh Corp | |
| Eric Soh appointed as a director of Samwoh Corp | |
| Poh Choon Huat sold 10% of his shares back to Samwoh Corp | |
| Samwoh Corp won first place at the Singapore Enterprise 50 Awards | |
| Samwoh Corp won first place at the Singapore Enterprise 50 Awards | |
| Mr Poh Choon Huat passed away | |
| Trust deed nominating Poh Teck Chuan to hold shares | |
| Eric Soh appointed CEO of Samwoh Corp | |
| Poh Teck Chuan appointed to the Samwoh Board | |
| Elvin Koh tendered his resignation as director of Samwoh Corp | |
| Elvin Koh resigned as director from the other companies in the Samwoh Group | |
| Plaintiffs commenced suit | |
| Trial began | |
| Trial concluded | |
| Judgment reserved |
7. Legal Issues
- Minority Shareholder Oppression
- Outcome: The court found some instances of misconduct but determined they did not warrant a minority buyout.
- Category: Substantive
- Sub-Issues:
- Exclusion from management
- Restriction of access to information
- Removal from directorship
- Breach of Director's Duties
- Outcome: The court did not make a specific finding of breach of director's duties but considered the conduct of directors in the context of the oppression claim.
- Category: Substantive
- Tampering of Meeting Minutes and Recordings
- Outcome: The court rejected the allegations that the defendants had tampered with meeting minutes and audio recordings.
- Category: Procedural
8. Remedies Sought
- Order for the 1st to 6th defendants to purchase the plaintiffs’ shares
- Order for the plaintiffs to purchase the 1st to 6th defendants’ shares
9. Cause of Actions
- Oppression under s 216 of the Companies Act
10. Practice Areas
- Commercial Litigation
- Corporate Law
11. Industries
- Construction
- Transportation
- Logistics
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Fedorovitch v St Aubins Pty Ltd (No 2) | New South Wales Supreme Court | Yes | [1999] NSWSC 776 | Australia | Cited to explain the purpose of a remedy under the equivalent provision of s 216, which is to permit the minority to free its capital. |
| Re a company (No 0056885 of 1988), ex parte Schwarcz (No 2) | Unknown | No | [1989] BCLC 427 | Unknown | Cited to support the proposition that a minority buyout order should not be made if it would not be in the company’s interest. |
| Sharikat Logistics Pte Ltd v Ong Boon Chuan and others | High Court | No | [2014] SGHC 224 | Singapore | Cited as the only local decision to consider the possibility of a minority buyout order, where the court found egregious acts on the part of the majority shareholders but held that they were not egregious enough for a minority buyout order. |
| Re a Company (No 006834 of 1988), ex parte Kremer | Unknown | No | [1989] BCLC 365 | Unknown | Cited to support the proposition that the normal remedy in an ordinary case of breakdown of confidence between the parties is for the minority shareholder to be offered a fair price for his shares. |
| Re a company (No 00789 of 1987); ex parte Shooter | Unknown | Yes | [1990] BCLC 384 | Unknown | Cited to support the proposition that a majority shareholder’s egregious conduct should not warrant a minority buyout order unless it makes him unfit to exercise control of the company. |
| Re Brenfield Squash Rackets Club Ltd | Unknown | Yes | [1996] 2 BCLC 184 | Unknown | Cited to support the proposition that a majority shareholder’s egregious conduct should not warrant a minority buyout order unless it makes him unfit to exercise control of the company. |
| Fexuto Pty Ltd v Bosnjak Holdings Pte Ltd | New South Wales Court of Appeal | No | [2001] NSWCA 97 | Australia | Cited to support the proposition that a majority shareholder’s egregious conduct should not warrant a minority buyout order unless it makes him unfit to exercise control of the company. |
| Oak Investment Partners XII, Limited Partnership v Boughtwood and others | High Court of Justice | Yes | [2009] EWHC 176 (Ch) | England and Wales | Cited to support the proposition that a majority shareholder’s egregious conduct should not warrant a minority buyout order unless it makes him unfit to exercise control of the company. |
| Boughtwood v Oak Investment Partners XII, Ltd Partnership | Court of Appeal | Yes | [2010] EWCA Civ 23 | England and Wales | Cited to support the proposition that a majority shareholder’s egregious conduct should not warrant a minority buyout order unless it makes him unfit to exercise control of the company. |
| Lantsbury v Hauser and another | High Court of Justice | Yes | [2010] EWHC 390 | England and Wales | Cited to support the proposition that a majority shareholder’s egregious conduct should not warrant a minority buyout order unless it makes him unfit to exercise control of the company. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) s 216 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Minority buyout
- Oppression
- Shareholder
- Board of directors
- Settlement agreement
- Corporate governance
- Independent valuer
- Directors' duties
- Shareholding structure
15.2 Keywords
- Minority shareholder
- Oppression
- Buyout
- Companies Act
- Corporate governance
- Singapore
- Samwoh Group
16. Subjects
- Company Law
- Shareholder Rights
- Corporate Governance
- Commercial Litigation
17. Areas of Law
- Company Law
- Minority Shareholder Rights
- Oppression
- Corporate Governance