A 3 Min Read On Choy Yuk Kong & Ors v Landyork Farming Sdn Bhd & Ors

**In this article, we will only focus on whether there exists minority oppression in this particular case (the short answer is no, the long answer can be gleaned below). 

Case summary

Yuk Kong is a minority shareholder and director in Landyork Farming. He alleged that there exists minority oppression instituted by the majority shareholders of Landyork Farming because:

1. Landyork Farming has failed/ refused to issue share certificates to him despite him having injected a sum of money into the company;
2. Diluted his shares and allotted them to another shareholder of the company;
3. Denied access to Landyork books of accounts, audited accounts, and all relevant documents pertaining to the accounts of Landyork Farming when requested for inspection;
4. Unjustified/ unnecessary spending for cultivating oil palm on a piece of land that was owned by a subsidiary of Landyork Farming;
5.  An unjustified and illegal transaction with another company related to some of the shareholders of the Landyork Farming, where that company owes Landyork Farming a substantial amount of monies;
6. Failure to redeem a piece of land belonging to him but instead was charged to a bank for the benefit of Landyork Farming; and
7. Owe him monies (being an advance payment for the consideration of shares) and refused to pay him back. 

What does the court say in regards to minority oppression?

In regards to minority oppression, the court noted that:

1. It is not minority oppression just because the minority shareholders do not agree with the decision made by the majority shareholders of a company- minority oppression only happens when there is actual oppression by the majority shareholders, or in a situation where the minority shareholders’ interests are disregarded by the majority shareholders.
2. Although a single act or omission on the part of the wrongdoers may constitute oppression that justifies relief; it is only actionable where by its very nature such act or omission has so devastating or far-reaching a consequence upon the rights of a member;
3. In an application for minority shareholders’ oppression, it must be established that the wrong is a personal wrong to the minority shareholder and not a distinct corporate wrong.

The court’s decision

By the end of it, the court dismissed Yuk Kong’s claim, noting that (based on the facts and evidence presented in the case): 

1. Part of the sum has been repaid to Yuk Kong.
2. Yuk Kong also declined to subscribe to the shares of Landyork Farming and had even agreed for the sum (that is to be repaid) to be treated as a loan by him as director.
3. Based on the facts of the case, the loan is to be repaid by installments, free of interest, unsecured, and with no fixed repayment term;
4. Yuk Kong was informed that the percentage of his shareholding in Landyork Farming would be diluted. He even acknowledged it but refused to subscribe to new shares.
5. Yuk Kong knows what is going on. In this regard:
   1. The decision was taken by Landyork Farming as part and parcel of its internal management workings; and
   2. Yuk Kong was aware of the oil palm cultivation on that particular piece of land, as he was directly involved in the purchase of the land for the purpose of oil palm cultivation.
6. Yuk Kong was aware that Landyork Farmings had dealings with the other companies that has relations with their other shareholders.
7. The dispute is a contractual one- therefore, the claim for minority oppression does not arise. Furthermore, there is evidence to show that this particular claim will not be pursued by Yuk Kong. 
8. It was a mere attempt to recover a disputed sum allegedly paid by Yuk Kong for the consideration of shares in the subsidiary company. As the court noted, whatever grouses Yuk Kong has are not grouses qua shareholders but are personal disputes, nothing at all to do with minority oppression. 

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