VENKATESWARA RAO A/L KRISHNAN v FWG GLOBAL SDN BHD & ORS AND ANOTHER SUIT
Holding a minority shareholding does not mean having to stay silent and swallow every decision made by the majority. Nor does it give the majority a free licence to do whatever they please under the excuse of “we have the numbers.” In company law, majority power has limits. When that power is used to oppress, marginalise, or pressure minority shareholders, it ceases to be a mere internal company matter — it becomes a legal issue.
In this case, the company began with relationships between shareholders built on trust and mutual understanding. There were agreements, negotiations, and expectations that shareholdings would be transferred as promised. Relying on those assurances, one shareholder took action and made significant decisions, trusting that the agreed share transfer would be honoured.
However, events did not unfold as planned. The promised share transfer never took place. Positions within the company shifted. Access to management became increasingly restricted. Key decisions were made without the involvement of the minority shareholder. Gradually, majority power was no longer used simply to manage the company, but to pressure the weaker party.
As a result, two legal actions were commenced simultaneously.
One action alleged oppression of the minority shareholder.
The other sought specific performance to compel the transfer of shares as agreed.
The court emphasised that this was not merely an ordinary commercial dispute. It was not simply about who owned what percentage of shares. The real issue was whether the conduct of those controlling the company was fair, honest, and consistent with the legitimate expectations between shareholders.
The court examined the overall pattern of conduct — not a single decision, not one meeting, but a series of actions demonstrating how majority power was used to marginalise the minority. This included the failure to honour the promised share transfer, the exclusion from management roles, and decisions that adversely affected the minority’s interests.
At the same time, the court considered the claim for specific performance. The principle was clear: where an agreement for the transfer of shares is valid, clear, and capable of enforcement, the court will not hesitate to order its performance — especially when non-compliance is used as a tool to pressure the other party.
The court stressed that the law does not allow those in power to benefit from their own delay, manoeuvring, or dishonesty. If a promise of shares is used to gain an advantage and then reneged upon once control is secured, that is not merely a breach of promise — it may amount to oppression.
This case serves as an important reminder that minority shareholder protection is not an empty theory. Courts are prepared to intervene when corporate structures are used unfairly, even when all documents appear valid on paper.
Lesson learned: In a company, majority power is not a licence to oppress. A promise to transfer shares is not just words — it carries legal consequences. And when control is exercised to deny fairness, the court will not remain silent.
