Koh Keng Chew v Liew Kit Fah: Minority Shareholder Rights, Oppression, and Valuation of Shares
In Koh Keng Chew and others v Liew Kit Fah and others, the Singapore High Court addressed a dispute arising from a s 216 Companies Act claim 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. The plaintiffs sought a buyout order for their shares in Samwoh Corporation Pte Ltd and other related entities. The central issue was whether the value of the plaintiffs' shares should be discounted due to their minority status and share transfer restrictions. Justice Chua Lee Ming directed that no discounts should be applied for either reason, emphasizing that such discounts are not automatically justified in court-ordered buyouts and must be assessed for fairness and equity.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Directed that the value of the plaintiffs’ shares is not to be discounted for either lack of control or lack of free transferability.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court case concerning minority shareholder oppression and the valuation of shares in privately held companies. The court ruled against applying discounts for lack of control or marketability.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Liew Kit Fah | Defendant | Individual | Discounts for lack of control and free transferability not applied | Lost | |
| Liew Chiew Woon | Defendant | Individual | Discounts for lack of control and free transferability not applied | Lost | |
| Pang Kok Lian | Defendant | Individual | Discounts for lack of control and free transferability not applied | Lost | |
| Soh Kim Seng | Defendant | Individual | Discounts for lack of control and free transferability not applied | Lost | |
| Soh Soon Jooh | Defendant | Individual | Discounts for lack of control and free transferability not applied | Lost | |
| Poh Teck Chuan | Defendant | Individual | Discounts for lack of control and free transferability not applied | Lost | |
| Koh Keng Chew | Plaintiff | Individual | Shares to be valued without discount | Won | |
| Koh Oon Bin | Plaintiff | Individual | Shares to be valued without discount | Won | |
| Koh Hoon Lye | Plaintiff | Individual | Shares to be valued without discount | Won | |
| Samwoh Corporation Pte Ltd | Defendant | Corporation | Discounts for lack of control and free transferability not applied | Lost | |
| Samwoh Resources Pte Ltd | Defendant | Corporation | Discounts for lack of control and free transferability not applied | Lost | |
| Samwoh Infrastructure Pte Ltd | Defendant | Corporation | Discounts for lack of control and free transferability not applied | Lost | |
| Samgreen Pte Ltd | Defendant | Corporation | Discounts for lack of control and free transferability not applied | Lost | |
| Samwoh Marine Pte Ltd | Defendant | Corporation | Discounts for lack of control and free transferability not applied | Lost | |
| Samwoh Shipping Pte Ltd | Defendant | Corporation | Discounts for lack of control and free transferability not applied | Lost | |
| Resource Development Holdings Pte Ltd | Defendant | Corporation | Discounts for lack of control and free transferability not applied | Lost | |
| Highway International Pte Ltd | Defendant | Corporation | Discounts for lack of control and free transferability not applied | Lost | |
| Sam Land Pte Ltd | Defendant | Corporation | Discounts for lack of control and free transferability not applied | Lost | |
| Sam Development Pte Ltd | Defendant | Corporation | Discounts for lack of control and free transferability not applied | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chua Lee Ming | Judge | Yes |
4. Counsels
4. Facts
- The plaintiffs hold 28.125% of the shares in the 7th to 16th defendants.
- The plaintiffs brought an action under s 216 of the Companies Act against the 1st to 6th defendants.
- The 1st to 6th defendants hold the remaining 71.875% of the shares.
- The court ordered the 1st to 6th defendants to purchase the shares of the plaintiffs.
- The parties could not agree on the reference date, framework, or reasoned valuation.
- The 1st to 6th defendants argued for discounts due to lack of control and marketability.
- The valuer requested directions on whether to apply the discounts.
5. Formal Citations
- Koh Keng Chew and others v Liew Kit Fah and others, Suit No 125 of 2014, [2018] SGHC 262
- Koh Keng Chew and others v Liew Kit Fah and others, , [2016] 4 SLR 1208
- Koh Keng Chew and others v Liew Kit Fah and others, , [2018] 3 SLR 312
- Yeo Hung Khiang v Dickson Investment (Singapore) Pte Ltd and others, , [1999] 1 SLR(R) 773
- In re Bird Precision Bellows Ltd, , [1984] 1 Ch 419
- O’Neill v Phillips, , [1999] 1 WLR 1092
- Poh Fu Tek and others v Lee Shung Guan and others, , [2018] 4 SLR 425
- Re Blue Index Ltd; Murrell v Swallow and others, , [2014] EWHC 2680 (Ch)
- Thio Syn Kym Wendy and others v Thio Syn Pyn and another, , [2018] SGHC 54
- Re Addbins Ltd; Ashdown v Griffin, , [2015] EWHC 3161 (Ch)
6. Timeline
| Date | Event |
|---|---|
| Suit filed in Suit No 125 of 2014 | |
| Judgment delivered ordering the 1st to 6th defendants to purchase the shares of the plaintiffs | |
| Directions given as to the reference date for the valuation of the shares and the valuation process | |
| Hearing date | |
| Court directed that the value of the plaintiffs’ shares is not to be discounted | |
| Hearing date | |
| Judgment date |
7. Legal Issues
- Whether the value of minority shares should be discounted for lack of control in a buyout order under s 216(2) of the Companies Act
- Outcome: The court held that discounts for lack of control should not be applied unless it is just and equitable on the facts of the case.
- Category: Substantive
- Sub-Issues:
- Fairness of applying discounts in court-ordered buyouts
- Valuation of shares in privately held companies
- Whether the value of minority shares should be discounted for lack of free transferability in a buyout order under s 216(2) of the Companies Act
- Outcome: The court held that discounts for lack of free transferability should not be applied unless it is just and equitable on the facts of the case.
- Category: Substantive
- Sub-Issues:
- Impact of share transfer restrictions on valuation
- Fairness of applying discounts in court-ordered buyouts
8. Remedies Sought
- Buyout order for minority shares
9. Cause of Actions
- Oppression under s 216 of the Companies Act
10. Practice Areas
- Commercial Litigation
- Corporate Law
11. Industries
- No industries specified
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Koh Keng Chew and others v Liew Kit Fah and others | High Court | Yes | [2016] 4 SLR 1208 | Singapore | Cited for the order for the 1st to 6th defendants to purchase the shares of the plaintiffs. |
| Koh Keng Chew and others v Liew Kit Fah and others | High Court | Yes | [2018] 3 SLR 312 | Singapore | Cited for directions as to the reference date for the valuation of the shares and the valuation process. |
| Yeo Hung Khiang v Dickson Investment (Singapore) Pte Ltd and others | N/A | Yes | [1999] 1 SLR(R) 773 | Singapore | Cited for the principle that the role of the court is merely to determine a price that is fair and just in the particular circumstances of the case. |
| In re Bird Precision Bellows Ltd | N/A | Yes | [1984] 1 Ch 419 | N/A | Cited for the principle that fixing the price for the shares pro rata, according to the value of all the shares in the company as a whole, is generally fair. |
| O’Neill v Phillips | N/A | Yes | [1999] 1 WLR 1092 | N/A | Cited for the principle that fixing the price for the shares pro rata, according to the value of all the shares in the company as a whole, is generally fair. |
| Poh Fu Tek and others v Lee Shung Guan and others | N/A | Yes | [2018] 4 SLR 425 | Singapore | Cited for the principle that a buyout order under s 216(2) is an exercise of the coercive power of the court. |
| Re Blue Index Ltd; Murrell v Swallow and others | N/A | Yes | [2014] EWHC 2680 (Ch) | N/A | Cited for the principle that applying a discount to a minority shareholding gives the delinquent shareholder a reward which he does not deserve. |
| Thio Syn Kym Wendy and others v Thio Syn Pyn and another | High Court | Yes | [2018] SGHC 54 | Singapore | Cited for the proposition that a discount for lack of free transferability should apply save in exceptional cases. |
| Re Addbins Ltd; Ashdown v Griffin | N/A | Yes | [2015] EWHC 3161 (Ch) | N/A | Applied Re Blue Index. |
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 shareholder
- Buyout order
- Share valuation
- Discount for lack of control
- Discount for lack of free transferability
- s 216 Companies Act
- Oppression
- Quasi-partnership
15.2 Keywords
- minority shareholder
- oppression
- share valuation
- discount
- companies act
- buyout order
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Minority Oppression | 95 |
| Company Law | 80 |
| Corporate Law | 70 |
| Valuation | 60 |
| Shares | 50 |
16. Subjects
- Company Law
- Corporate Governance
- Shareholder Rights