Thio Syn Kym Wendy v Thio Syn Pyn: Minority Oppression & Share Valuation in Malaysia Dairy Industries
In a suit before the High Court of Singapore, Thio Syn Kym Wendy, Thio Syn Ghee, and Thio Syn San Serene, as plaintiffs, brought a minority oppression claim against Thio Syn Pyn and others, the defendants, concerning Malaysia Dairy Industries Pte Ltd (MDI). The court had previously granted judgment for the plaintiffs, ordering a buyout of their shares in MDI. This judgment addresses whether a discount should be applied to the valuation of the plaintiffs' minority shares. The court ordered that no minority discount should be applied to the sale of the plaintiffs’ shares in MDI, but left it to the independent valuer to consider whether it would be appropriate to apply any discount for a lack of marketability of MDI’s shares.
1. Case Overview
1.1 Court
High Court of Singapore1.2 Outcome
No minority discount should apply to the sale of the plaintiffs’ shares in Malaysia Dairy Industries Pte Ltd.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court judgment on minority oppression claim and share valuation in Malaysia Dairy Industries. Court orders buyout without minority discount.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Thio Syn Pyn | Defendant | Individual | Minority discount not applied | Lost | |
| Thio Syn Wee | Defendant | Individual | Minority discount not applied | Lost | |
| Thio Syn Kym Wendy | Plaintiff | Individual | Shares to be bought out without minority discount | Partial | |
| Thio Syn Ghee | Plaintiff | Individual | Shares to be bought out without minority discount | Partial | |
| Thio Syn San Serene | Plaintiff | Individual | Shares to be bought out without minority discount | Partial | |
| THIO HOLDINGS PTE LTD | Defendant | Corporation | Neutral | Neutral | |
| UNITED REALTY LTD | Defendant | Corporation | Neutral | Neutral | |
| Kwik Poh Leng | Defendant | Individual | Neutral | Neutral | |
| Malaysia Dairy Industries Pte Ltd | Defendant | Corporation | Neutral | Neutral |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Judith Prakash | Judge of Appeal | Yes |
4. Counsels
4. Facts
- Plaintiffs are minority shareholders in Malaysia Dairy Industries Pte Ltd (MDI).
- Defendants Ernest and Patrick are majority shareholders and directors of MDI.
- Plaintiffs brought a minority oppression action against the defendants.
- The court previously granted judgment for the plaintiffs, ordering a buyout of their shares in MDI.
- The parties disagreed on whether a discount should be applied in the valuation of the plaintiffs’ minority shares.
- The court found oppressive conduct on the part of the defendants, but their actions had not been specifically directed at worsening the plaintiffs’ positions as shareholders to compel them to sell their shares.
- The plaintiffs received their shares by way of a gift.
5. Formal Citations
- Thio Syn Kym Wendy and others v Thio Syn Pyn and another, Suit No 490 of 2013, [2018] SGHC 54
6. Timeline
| Date | Event |
|---|---|
| Mr. Thio Keng Poon procured the incorporation of United Realty Ltd, Malaysia Dairy Industries Pte Ltd, and Thio Holdings Pte Ltd. | |
| Michael’s shares were transferred to Ernest and Patrick. | |
| Mr. Thio, Mdm Kwik, Ernest and Patrick were the only family members who held shares in the Group. | |
| Shares in the Group companies were allotted to Michael, Vicki, Wendy and Serene by way of bonus issues. | |
| The members of the family, THPL and MDI entered into a Deed of Settlement. | |
| The shareholders of MDI voted to remove Mr Thio as a director. | |
| Wendy, Serene and Vicki appointed Ernst & Young LLP to prepare valuations of URL, MDI and THPL. | |
| Ernst & Young LLP provided its indicative valuation results in a presentation. | |
| Ernst & Young LLP revised its indicative valuation results. | |
| The family met to discuss the proposed buyout. | |
| The family met to discuss the proposed buyout. | |
| Vicki sold out to Ernest and Patrick. | |
| The plaintiffs brought a minority oppression action against the defendants. | |
| Judgment was delivered. | |
| The parties jointly wrote to the court requesting a hearing to seek directions on the issue of whether a discount should be applied to the valuation of the plaintiffs’ shares in MDI. | |
| Hearing took place. | |
| Judgment reserved. |
7. Legal Issues
- Application of Minority Discount
- Outcome: The court held that no minority discount should apply to the sale of the plaintiffs’ shares in MDI.
- Category: Substantive
8. Remedies Sought
- Buyout of Shares
9. Cause of Actions
- Minority Oppression
10. Practice Areas
- Commercial Litigation
- Corporate Law
11. Industries
- Dairy
- Manufacturing
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Thio Syn Kym Wendy and others v Thio Syn Pyn and others | High Court | Yes | [2017] SGHC 169 | Singapore | Outlines the full facts underlying this action. |
| Low Janie v Low Peng Boon and others | High Court | Yes | [1998] 2 SLR(R) 154 | Singapore | Cited for the principle that it would ordinarily be unfair for oppressed minority shareholders to be bought out at a discount. |
| Poh Fu Teck and others v Lee Shung Guan and others | High Court | Yes | [2017] SGHC 212 | Singapore | Cited for the principle that it would ordinarily be unfair for oppressed minority shareholders to be bought out at a discount. |
| In re Bird Precision Bellows Ltd | Chancery Division | Yes | [1984] 1 Ch 419 | England and Wales | Cited for the principle that it would ordinarily be unfair for oppressed minority shareholders to be bought out at a discount. |
| Tan Eck Hong v Maxz Universal Development Group Pte Ltd and others | High Court | Yes | [2017] SGHC 309 | Singapore | Cited to support that the general rule of no discount ought to apply regardless of whether the company in question is a quasi-partnership. |
| Leong Chee Kin v Ideal Design Studio Pte Ltd and others | High Court | Yes | [2017] SGHC 192 | Singapore | Cited to support that the general rule of no discount ought to apply regardless of whether the company in question is a quasi-partnership. |
| Irvine and another v Irvine and another (No 2) | Unknown | Yes | [2007] 1 BCLC 445 | England and Wales | Cited for the principle that a minority shareholding is to be valued for what it is, a minority shareholding, short of a quasi-partnership or some other exceptional circumstance. |
| Strahan v Wilcock | Unknown | Yes | [2006] 2 BCLC 555 | England and Wales | Cited for the principle that there is a strong presumption that no discount should be applied where the company in question is a quasi-partnership. |
| O’Neill and Another v Phillips and Others | House of Lords | Yes | [1999] 1 WLR 1092 | England and Wales | Cited for the principle that the presumption of no discount may be displaced in special circumstances. |
| CVC/Opportunity Equity Partners Ltd and another v Demarco Almeida | Unknown | Yes | [2002] 2 BCLC 108 | England and Wales | Cited for the rationale for denying a discount in the context of a quasi-partnership. |
| Sharikat Logistics Pte Ltd v Ong Boon Chuan and others | High Court | Yes | [2014] SGHC 224 | Singapore | Cited for the principle that the general rule is that no discount is to be applied in court-ordered buyouts under s 216(2) of the Companies Act. |
| Re Blue Index Ltd | English High Court | Yes | [2014] EWHC 2680 (Ch) | England and Wales | Cited for the general rule that there should be no discount for a minority shareholding unless the minority shareholder had acquired his shares at a discounted price in the first place. |
| Over & Over Ltd v Bonvests Holdings Ltd and another | Court of Appeal | Yes | [2010] 2 SLR 776 | Singapore | Cited for the principle that the court will be more inclined to order no discount where the majority’s oppressive conduct was entirely responsible for precipitating the breakdown in the parties’ relationship. |
| Re Sunrise Radio Ltd | Unknown | Yes | [2009] EWHC 2893 (Ch) | England and Wales | Cited for the principle that the court will be more inclined to order no discount where the majority’s oppressive conduct was directed at worsening the position of the minority as shareholders so as to compel them to sell out. |
| Lim Chee Twang v Chan Shuk Kuen Helina and others | High Court | Yes | [2010] 2 SLR 209 | Singapore | Cited to show that there ought to be a minority discount where the shares had been received as a gift. |
| Mathers v Mathers | Unknown | Yes | [1992] NSJ No 266 | Nova Scotia | Cited to support the argument that a lack of contribution by the minority shareholders per se is a reason to apply a discount. |
| Derdall v Derdall Irrigation Farms Ltd | Unknown | Yes | [2010] SJ No 513 | Saskatchewan | Cited to support the argument that a lack of contribution by the minority shareholders per se is a reason to apply a discount. |
| In re Bird Precision Bellows Ltd | Court of Appeal | Yes | [1986] 1 Ch 658 | England and Wales | Affirmed the decision in In re Bird Precision Bellows Ltd [1984] 1 Ch 419. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Minority Discount
- Share Valuation
- Minority Oppression
- Quasi-Partnership
- Fair Market Value
- Lack of Control
- Lack of Marketability
15.2 Keywords
- Minority Oppression
- Share Valuation
- Minority Discount
- Malaysia Dairy Industries
- Singapore High Court
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Minority Oppression | 95 |
| Discount on minority shares | 90 |
| Valuation | 85 |
| Shares | 80 |
| Company Law | 75 |
| Corporate Law | 60 |
| Corporate Litigation | 50 |
16. Subjects
- Company Law
- Valuation
- Shareholder Rights