The members of one of the founding families of construction and infrastructure firm Samwoh Corporation have lost their case of minority oppression against the other shareholders.
The Koh family had claimed, among other issues, that the majority shareholders engineered the removal of one of their members, Mr Elvin Koh, as managing director in 2013. The Kohs also claimed they should be allowed to buy out the majority shareholders.
The majority shareholders, in turn, said the Koh family should be the ones bought out.
The companies forming the Samwoh Group, which were also defendants in the case, also said a minority buyout order should not be granted.
The High Court yesterday ordered the majority shareholders to buy out the shares of the Koh family, at a price to be determined by an independent valuer. It also ruled that the Kohs pay costs of $270,000 to the other shareholders and $100,000 to the Samwoh Group.
The company was founded in 1975 as Samwoh Transport and Trading by three friends - Mr Elvin Koh's father, Mr Koh Keng Chew; Mr Pang Chok; and Mr Soh Kim Seng. Three others who were close friends or relatives of the founding members later joined the business. The Koh family holds a 28.125 per cent stake in the company, the Pang family has 37.125 per cent, the Soh family 24.75 per cent and another defendant, Mr Poh Teck Chuan, 10 per cent.
Judicial Commissioner Chua Lee Ming said in his judgment yesterday that unless there is reason to believe the majority shareholders are unfit to run the firm, then the usual order that the majority buy out the minority "suffices as a remedy for the minority".
Judicial Commissioner Chua said that while there were some proven instances of misconduct by the majority shareholders, they did not render them unfit to run the Samwoh Group.
For example, he found the majority shareholders did indeed plan to remove Mr Elvin Koh as managing director and director, but they were entitled to do so "since there was no common understanding that Elvin Koh could not be removed".
"As much as I acknowledge the grievances of Elvin Koh and (his brother) Koh Hoon Lye regarding the way they were removed as directors... there is no reason to forcibly take away the (rights of the majority shareholders) to continue exercising control of the Samwoh Group," he said.
Even if the allegations by the Koh family were proven, they were also not egregious enough to justify a minority buyout order, he added.
The judicial commissioner rejected some allegations by the Kohs, including that there had been tampering of meeting minutes and recordings. Another allegation was that their access to information was restricted, but this was deemed "not unreasonable" as Mr Elvin Koh had a competing business.
Mr Eric Soh, Samwoh Corporation chief executive and one of the defendants, said he was pleased with the verdict and thanked supporters, including staff and business associates. "This case has been going on for quite some time, but throughout these three years we have had strong support from our roughly 1,000 staff," he said.
Mr Elvin Koh said he will discuss with his father and lawyer before deciding whether to appeal.
The Koh family was represented by Mr Alvin Yeo of WongPartnership, the majority shareholders by Mr Patrick Ang of Rajah & Tann, and the Samwoh Group by Mr Thio Shen Yi of TSMP.