Wei Fengpin v Low Tuck Loong Raymond: Oppression of Minority Shareholder Claim

In Wei Fengpin v Low Tuck Loong Raymond, the High Court of Singapore addressed a claim by Wei Fengpin against Low Tuck Loong Raymond and Sim Eng Chuan, directors and shareholders of Lateral Solutions Pte Ltd, for acting oppressively and unfairly towards him under s 216 of the Companies Act. The court, presided over by Audrey Lim J, found that the Defendants had engaged in oppressive conduct, including improperly paying dividends and bonuses to themselves, withholding company information, diverting corporate opportunities, and failing to hold AGMs. Despite the company being in liquidation, the court ordered Low and Sim to make restitution to the company for the improperly received dividends and bonuses.

1. Case Overview

1.1 Court

General Division of the High Court

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Minority shareholder oppression claim. Court found directors acted unfairly and oppressively, ordering restitution despite company liquidation.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Wei FengpinPlaintiffIndividualClaim Allowed in PartPartial
Sim Eng ChuanDefendantIndividualClaim Partially Upheld AgainstLost
Lateral Solutions Pte LtdDefendantCorporationNominal DefendantNeutral
Low Tuck Loong RaymondDefendantIndividualClaim Partially Upheld AgainstLost

3. Judges

Judge NameTitleDelivered Judgment
Audrey LimJudgeYes

4. Counsels

Counsel NameOrganization
Jimmy YimDrew & Napier LLC
Lim Joe JeeDrew & Napier LLC
Kevin LeeDrew & Napier LLC
Eunice LauDrew & Napier LLC
Tan Chuan ThyeRajah & Tann Singapore LLP
Jared KokRajah & Tann Singapore LLP
Shaun OuRajah & Tann Singapore LLP

4. Facts

  1. Wei, Low, and Sim were equal shareholders and directors of Lateral Solutions Pte Ltd.
  2. Low and Sim passed a resolution to remove Wei as a director at an EGM in September 2017.
  3. Wei commenced an action against Low and Sim under s 216 of the Companies Act, claiming oppressive conduct.
  4. The Defendants applied to wind up the Company, and a winding up order was granted on 12 June 2020.
  5. The Defendants paid themselves dividends and bonuses without Wei's knowledge or approval.
  6. The Defendants withheld company information from Wei.
  7. Low incorporated LSW and diverted a corporate opportunity from the Company to LSW.
  8. The Company made loans to LSW without Wei's knowledge or consent.
  9. SH, a company related to Wei, attempted to undercut the Company by supplying directly to Apple.

5. Formal Citations

  1. Wei Fengpin v Low Tuck Loong Raymond and others, Suit No 238 of 2017, [2021] SGHC 90

6. Timeline

DateEvent
Wei commenced action against Low and Sim under s 216 of the Companies Act.
Trial began
Resolution passed to remove Wei as a director.
Defendants applied to wind up the Company.
Trial concluded
Trial concluded
Winding up order granted.
Judgment reserved.

7. Legal Issues

  1. Oppression of Minority Shareholders
    • Outcome: The court found that the Defendants had engaged in conduct that was oppressive and unfair to the Plaintiff.
    • Category: Substantive
    • Sub-Issues:
      • Unfair discrimination
      • Prejudicial conduct
      • Breach of director's duties
      • Withholding of information
      • Diversion of corporate opportunity
      • Related-party transactions
  2. Director's Duties
    • Outcome: The court found that Low had breached his duties to the Company by diverting a corporate opportunity and failing to disclose related-party transactions.
    • Category: Substantive
    • Sub-Issues:
      • Breach of fiduciary duty
      • Conflict of interest
      • Duty to act bona fide
      • Duty to disclose
      • Duty of care and skill
  3. Effect of Winding Up on s 216 Claim
    • Outcome: The court held that a s 216 action can continue against a company in liquidation, but the fact of liquidation would have a bearing on the orders to be made.
    • Category: Procedural

8. Remedies Sought

  1. Buyout of Wei's shares
  2. Return of improperly paid dividends and bonuses
  3. Damages

9. Cause of Actions

  • Oppression of Minority Shareholder
  • Breach of Fiduciary Duty

10. Practice Areas

  • Commercial Litigation
  • Corporate Law

11. Industries

  • Manufacturing

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Ascend Field Pte Ltd and others v Tee Wee Sien and another appealCourt of AppealYes[2020] 1 SLR 771SingaporeCited for the principle of commercial unfairness in shareholder oppression claims, specifically regarding departure from fair dealing standards.
Leong Chee Kin (on behalf of himself and as a minority shareholder of Ideal Design Studio Pte Ltd) v Ideal Design Studio Pte Ltd and othersHigh CourtYes[2018] 4 SLR 331SingaporeCited for the requirements for a legitimate expectation to arise, specifically the need for an agreement between parties.
Over & Over Ltd v Bonvest Holdings Ltd and anotherHigh CourtYes[2010] 2 SLR 776SingaporeCited for the principle that in quasi-partnerships, courts are more willing to find legitimate expectations based on informal understandings.
Eng Gee Seng v Quek Choon Teck and othersHigh CourtYes[2010] 1 SLR 241SingaporeCited for the principle that in quasi-partnerships, courts are more willing to find legitimate expectations based on informal understandings.
Mukherjee Amitava v DyStar Global Holdings (Singapore) Pte Ltd and othersHigh CourtYes[2018] 2 SLR 1054SingaporeCited for a director's statutory right to inspect the accounting records and other financial documents of a company.
In re Duomatic LtdChancery DivisionYes[1969] 2 Ch 365England and WalesCited for the principle that actions may be validated if all shareholders assented to the matter.
EIC Services Ltd and another v Phipps and othersHigh CourtYes[2004] 2 BCLC 589England and WalesCited for the principle that actions may be validated if all shareholders assented to the matter.
Ho Yew Kong v Sakae Holdings Ltd and other appeals and other mattersCourt of AppealYes[2018] 2 SLR 333SingaporeCited for the principle that a minority shareholder may bring an oppression claim even if the wrong also constitutes a wrong to the company.
Ng Eng Ghee and others v Mamata Kapildev Dave and others (Horizon Partners Pte Ltd, intervener) and another appealCourt of AppealYes[2009] 3 SLR(R) 109SingaporeCited for the duties of a director to act bona fide and in the best interests of the company.
Mona Computer Systems (S) Pte Ltd v Singaravelu MuruganHigh CourtYes[2014] 1 SLR 847SingaporeCited for the duty of a director not to profit from opportunities which would have gone to the company.
Kumagai Gumi Co Ltd v Zenecon Pte Ltd and others and other appealsCourt of AppealYes[1995] 2 SLR(R) 304SingaporeCited for the principle that winding up does not bar relief under s 216 of the Companies Act if the reliefs sought do not interfere with the liquidation process.
Croly v Good and othersCourt of AppealYes[2010] 2 BCLC 569England and WalesCited for the principle that proceedings under s 994(1) of the Companies Act 2006 (UK) can proceed although the company was in administration.
Shepherd v Williamson and anotherHigh CourtYes[2010] EWHC 2375 (Ch)England and WalesCited for the principle that proceedings under s 994(1) of the Companies Act 2006 (UK) can proceed although the company was in administration.
Re Tobian Properties LtdHigh CourtYes[2013] 2 BCLC 567England and WalesCited for the principle that proceedings under s 994(1) of the Companies Act 2006 (UK) can proceed although the company was in liquidation.
Re Cabot Global LtdHigh CourtYes[2016] EWHC 2287 (Ch)England and WalesCited for the principle that proceedings under s 994(1) of the Companies Act 2006 (UK) can proceed although the company was in liquidation.
In re Hailey Group LtdCourt of AppealYes[1993] BCLC 459England and WalesCited for the principle that in determining what relief is appropriate, one must consider the circumstances at the time of the hearing and not at the time of the application.
Campbell and another v Backoffice Investments Pty Ltd and anotherHigh CourtYes(2009) 257 ALR 610AustraliaCited for the principle that a share buyout may not be appropriate if the company is in liquidation and the shares are worthless.
Ng Kek Wee v Sim City Technology LtdCourt of AppealYes[2014] 4 SLR 723SingaporeCited for the principle that a plaintiff is seeking a buyout of his shares as evidence of the personal unfairness to him arising from the Defendants’ actions.
Tan Yong San v Neo Kok Eng and othersHigh CourtYes[2011] SGHC 30SingaporeCited for the principle that equitable defenses in an action under s 216 are not meant to operate in an all-or-nothing fashion.
Re London School of Electronics LtdChancery DivisionYes[1986] 1 Ch 211England and WalesCited for the principle that a plaintiff's conduct may affect the relief that the court thinks fit to grant.
Sakae Holdings Ltd v Gryphon Real Estate Investment Corp Pte Ltd and others (Foo Peow Yong Douglas, third party) and another suitHigh CourtYes[2017] SGHC 73SingaporeCited for the principle that liquidators may carry out investigations and take appropriate steps to redress any wrongs to the Company committed by its directors.
Kitnasamy s/o Marudapan v Nagatheran s/o Manogar and anotherHigh CourtYes[2000] 1 SLR(R) 542SingaporeCited for the principle that the courts have protected the interests of a member qua director.
Petroships Investment Pte Ltd v Wealthplus Pte Ltd and others and another matterHigh CourtYes[2016] 2 SLR 1022SingaporeCited for the principle that a s 216A derivative action would not avail the Company which has been wound up.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Companies Act (Cap 50, 2006 Rev Ed) s 216Singapore
Companies Act s 156Singapore
Companies Act s 157(1)Singapore
Companies Act s 4Singapore
Companies Act s 254(1)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Oppression
  • Minority shareholder
  • Winding up
  • Liquidation
  • Director's duties
  • Corporate opportunity
  • Related-party transactions
  • Commercial unfairness
  • Legitimate expectation
  • Quasi-partnership

15.2 Keywords

  • minority shareholder oppression
  • director's duties
  • winding up
  • corporate governance
  • Singapore
  • Companies Act

17. Areas of Law

Area NameRelevance Score
Minority Oppression95
Company Law85
Winding Up70
Fiduciary Duties60
Duty to Account50
Commercial Disputes30
Fraud and Deceit20
Undue Influence15
Estoppel10
Contract Law10
Insolvency Law5

16. Subjects

  • Corporate Law
  • Shareholder Rights
  • Directors' Duties
  • Insolvency Law