{"id":3174,"date":"2021-07-12T13:45:41","date_gmt":"2021-07-12T05:45:41","guid":{"rendered":"https:\/\/yhalaw.com.my\/?p=3174"},"modified":"2024-09-09T09:11:39","modified_gmt":"2024-09-09T01:11:39","slug":"company-law-minority-shareholders-oppression-remedies","status":"publish","type":"post","link":"https:\/\/yhalaw.com.my\/zh\/company-law-minority-shareholders-oppression-remedies\/","title":{"rendered":"COMPANY LAW \u2013 MINORITY SHAREHOLDERS \u2013 OPPRESSION \u2013 REMEDIES"},"content":{"rendered":"<p><strong><em>Q: I am a minority shareholder in Company X. The majority have passed a resolution to increase the number of shares which effectively dilute my shareholdings. Thereafter, the majority passed resolutions to transfer substantial assets of the company in favour of the majority shareholders-controlled affiliated company. What can I do?<br \/>\n<\/em><\/strong>You may consider filing in an application for minority oppression.<\/p>\n<p><strong><em>What is Minority Shareholder?<br \/>\n<\/em><\/strong>Minority shareholders usually refer to those who hold less than 50% shares of the company or a party who does not have control over the fate and direction of the company.<\/p>\n<p><strong><em>Conduct that constitutes \u2018Oppressive Conduct\u2019<\/em><\/strong><\/p>\n<ul>\n<li>Majority shareholders engaged in conduct that is oppressive, prejudicial, or discriminatory against minority shareholders.<\/li>\n<li>Oppression often occurs when majority shareholders make decisions that are in their own interest while suppressing the interest of minority shareholders.<\/li>\n<\/ul>\n<p><strong><em>What are the Legal Protections from Oppression of Minority Shareholders in Malaysia?<\/em><\/strong><\/p>\n<ul>\n<li>There is a wide range of relief under Section 346 of the Companies Act 2016 (\u201c<strong>CA 2016<\/strong>\u201d) for minority oppression.<\/li>\n<li>Any member of the company who is oppressed may apply to the Court to:-<\/li>\n<\/ul>\n<ol>\n<li>direct, prohibit, cancel or vary any transaction or resolution;<\/li>\n<li>regulate the conduct of the company in the future;<\/li>\n<li>require other members to purchase shares and debentures of the company;<\/li>\n<li>in case of purchase of shares, provide for a reduction of capital of the company; or<\/li>\n<li>wind up the company.<\/li>\n<\/ol>\n<p><strong><em>What\u2019s the test for minority oppression?<br \/>\n<\/em><\/strong>The court will consider whether reasonable directors possessing the skills, knowledge, acumen and experience of directors would have decided that a proposed course of action was unfair.<\/p>\n<p><strong><em>Note of Caution<br \/>\n<\/em><\/strong>If you intend to sign up as a minority shareholder of a company, you should bear in mind the \u201cmajority rule\u201d. The general principle for governance of the companies is the majority rule. The majority shareholders have influence in the ordinary decision-making process. The will of the majority would prevail. Unless there exist circumstances where the powers of the company may be exercised in a manner that is commercially unfair to minority.<\/p>","protected":false},"excerpt":{"rendered":"<p>What is minority shareholders&#8217; oppression? What are my legal remedies?<\/p>","protected":false},"author":9,"featured_media":3193,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1570],"tags":[2188,2186,2189,2187],"class_list":["post-3174","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-company-law","tag-majority-rule","tag-minority","tag-oppression","tag-shareholders"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>COMPANY LAW \u2013 MINORITY SHAREHOLDERS \u2013 OPPRESSION \u2013 REMEDIES | Yew Huoi, How &amp; Associates | Leading Malaysia Law Firm<\/title>\n<meta name=\"description\" content=\"What is minority shareholders&#039; oppression? 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