Senda International Capital v Kiri Industries: Minority Oppression & Share Valuation
In a dispute between Senda International Capital Ltd and Kiri Industries Ltd, the Singapore Court of Appeal upheld the order for Senda to buy out Kiri's shares in DyStar Global Holdings (Singapore) Pte Ltd, finding no error in the lower court's decision to deny a minority discount in the share valuation due to Senda's oppressive conduct. The court partially allowed the appeal on the costs issue, adjusting the cost allocation in one of the related suits. The case involved a minority oppression claim and a breach of contract counterclaim.
1. Case Overview
1.1 Court
Court of Appeal of the Republic of Singapore1.2 Outcome
Appeal dismissed in part and allowed in part.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court upholds order for Senda to buy Kiri's DyStar shares, denying minority discount due to Senda's oppressive conduct.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Kiri Industries Limited | Respondent, Plaintiff, Defendant in Counterclaim | Corporation | Successful on claim for minority oppression | Won | |
| Senda International Capital Limited | Appellant, Plaintiff in Counterclaim, Defendant | Corporation | Appeal dismissed in part and allowed in part | Partial | |
| DyStar Global Holdings (Singapore) Pte Ltd | Respondent, Defendant | Corporation | Partial success in Suit 3 | Partial | |
| Manishkumar Pravinchandra Kiri | Respondent, Defendant in Counterclaim | Individual | Costs awarded against | Lost | |
| Pravinchandra Amrutlal Kiri | Respondent, Defendant in Counterclaim | Individual | Neutral | Neutral | |
| Kiri International (Mauritius) Private Limited | Respondent, Defendant in Counterclaim | Corporation | Neutral | Neutral | |
| Mukherjee Amitava | Respondent, Defendant in Counterclaim | Individual | Neutral | Neutral |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Judith Prakash | Judge of Appeal | Yes |
| Robert French | International Judge | No |
| Bernard Rix | International Judge | No |
4. Counsels
4. Facts
- Senda and Kiri owned virtually the entire issued share capital of DyStar.
- Kiri sued Senda for minority oppression in the running of DyStar.
- Senda counterclaimed for breaches of the shareholders’ agreement.
- The SICC found that minority oppression was established.
- The SICC ordered Senda to buy out Kiri’s shareholding in DyStar.
- Senda appealed against the Judges’ decisions on the Minority Discount Issue and the Costs Issue.
- Kiri was found to have breached the non-compete and non-solicitation clause in the SSSA.
5. Formal Citations
- Senda International Capital Ltd v Kiri Industries Ltd and others, Civil Appeal No 23 of 2019, [2020] SGCA(I) 01
6. Timeline
| Date | Event |
|---|---|
| Kiri incorporated DyStar and signed an asset purchase agreement. | |
| DyStar acquired selected assets of the Pre-Acquisition DyStar. | |
| Longsheng appointed three directors to the DyStar board. | |
| First Board meeting took place; Mr. Manish was appointed Chairman. | |
| Mr. Manish stepped down as co-Chairman of the Board. | |
| Board approved the transfer of the convertible bond from WPL to Senda. | |
| Senda converted all the debt under the convertible bond into equity. | |
| Senda caused DyStar to make a payment to Mr Ruan of US$2m. | |
| Senda caused DyStar to make payment of substantial fees to Longsheng. | |
| Senda caused DyStar to make a provision for substantial fees for alleged services and support provided by Longsheng to DyStar. | |
| Kiri sued Senda for minority oppression in SICC Suit No 4 of 2017. | |
| DyStar commenced SICC Suit No 3 of 2017 against Kiri and its related parties. | |
| Case management conference held. | |
| Judges delivered oral grounds of decision. | |
| Written grounds of decision issued. | |
| Appeals in CA 122 and CA 126 against the Main Judgment were heard. | |
| Judgment on appeals in CA 122 and CA 126 was delivered. | |
| Judgment reserved. | |
| Judgment delivered. |
7. Legal Issues
- Minority Oppression
- Outcome: Oppression was established, and Senda was ordered to buy out Kiri's shares in DyStar.
- Category: Substantive
- Sub-Issues:
- Commercially unfair conduct
- Exclusion from management
- Refusal to declare dividends
- Related Cases:
- [2018] 5 SLR 1
- [2019] 2 SLR 1
- Valuation of Shares
- Outcome: The court decided that no minority discount should be factored into the valuation of Kiri's shares.
- Category: Substantive
- Sub-Issues:
- Application of minority discount
- Consideration of oppressive conduct
- Impact of breaches of contract
- Related Cases:
- [2019] 1 SLR 1065
- Breach of Contract
- Outcome: Kiri was found to have breached the non-compete and non-solicitation clause in the SSSA in relation to five customers of DyStar.
- Category: Substantive
- Sub-Issues:
- Non-compete clause
- Non-solicitation clause
- Costs
- Outcome: Kiri was awarded full costs on its claim in Suit 4, and DyStar was awarded 50% of the costs of its claim in Suit 3 against Kiri and Mr Manish.
- Category: Procedural
- Related Cases:
- [1994] 2 SLR(R) 501
8. Remedies Sought
- Buy-out of shares
- Damages
- Costs
9. Cause of Actions
- Minority Oppression
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Corporate Law
- Shareholder Disputes
11. Industries
- Chemicals
- Dye Industry
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| DyStar Global Holdings (Singapore) Pte Ltd v Kiri Industries Ltd and others and another suit | Singapore International Commercial Court | Yes | [2018] 5 SLR 1 | Singapore | Established minority oppression and ordered Senda to buy out Kiri's shareholding in DyStar. |
| Senda International Capital Ltd v Kiri Industries Ltd and others and another appeal | Court of Appeal | Yes | [2019] 2 SLR 1 | Singapore | Decision on the appeal against the Main Judgment, providing facts of the case. |
| Kiri Industries Ltd v Senda International Capital Ltd and another | Singapore High Court (International) | Yes | [2019] SGHC(I) 02 | Singapore | Dealt with the Minority Discount Issue, the Costs Issue and the Counterclaim Issue. |
| Davies v Lynch-Smith and others | England and Wales High Court | Yes | [2018] EWHC 2336 (Ch) | England and Wales | Cited for the proposition that a minority discount should be ordered in cases where the minority shareholder acted in competition or in conflict of interest with the company; distinguished on its facts. |
| Derdall Irrigation Farms Ltd and another v Boyd Derdall | Court of Appeal for Saskatchewan | Yes | [2010] SKCA 104 | Canada | Cited for the proposition that a minority discount should be ordered in cases where the minority shareholder acted in competition or in conflict of interest with the company; distinguished on its facts. |
| Thio Syn Pyn v Thio Syn Kym Wendy and others and another appeal | Court of Appeal | Yes | [2019] 1 SLR 1065 | Singapore | Established that there is no presumption that a discount applies in the context of non-quasi-partnerships. |
| Re McCarthy Surfacing Ltd Hecquet v McCarthy | N/A | Yes | [2009] BCC 464 | N/A | Cited for the factors of whether the majority shareholder will get significant control over the company following the execution of the buy-out order and whether the minority shareholder has received any dividends. |
| Richards v Lundy | N/A | Yes | [2000] 1 BCLC 376 | N/A | Cited for the suggestion that it is possible to take a differentiated approach to minority discount. |
| Tullio Planeta v Maoro Andrea G | N/A | Yes | [1994] 2 SLR(R) 501 | Singapore | Cited for the legal principles on the award of costs. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| No applicable statutes | |
15. Key Terms and Keywords
15.1 Key Terms
- Minority oppression
- Share valuation
- Minority discount
- Shareholders’ agreement
- Non-compete clause
- Non-solicitation clause
- Buy-out order
- Oppressive conduct
15.2 Keywords
- minority oppression
- share valuation
- minority discount
- shareholders agreement
- Singapore
- DyStar
- Senda
- Kiri
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Minority Oppression | 90 |
| Company Law | 75 |
| Costs | 70 |
| Shareholders Agreement | 65 |
| Civil Procedure | 60 |
| Commercial Disputes | 50 |
| Arbitration | 30 |
16. Subjects
- Company Law
- Shareholder Disputes
- Contract Law
- Civil Procedure