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What Protections Should Founders Negotiate in Shareholders' Agreements With European Investors?
Indian statute, not the investor's term sheet, sets the outer limits of a shareholders' agreement. How founders dealing with European investors can use Companies Act supremacy, Section 27, NCLT oppression remedies and market benchmarks to push back on aggressive terms.
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Singapore

Lau Yu Man v Wellmix Organics (International) Pte Ltd [2007] SGHC 223

The court ordered the winding up of a company under s 254(1)(c) of the Companies Act because it had suspended business for more than five years and failed to comply with a court order to rectify breaches within a granted extension of time.

Sushant Shukla· ·14 min read
Singapore

Kunal Gobind Lalchandani and Another v LU [2006] SGHC 47

A director who misappropriates company funds and destroys company records breaches his fiduciary duties. A contract for restitution of misappropriated assets is not illegal under s 213 of the Penal Code.

Sushant Shukla· ·12 min read
Singapore

Ting Sing Ning (alias Malcolm Ding) v Ting Chek Swee (alias Ting Chik Sui) and Others [2006] SGHC 192

The plaintiff failed to establish locus standi to bring a derivative action as he did not prove that the majority shareholders were using their influence to prevent the company from taking action, and he failed to exhaust internal company remedies.

Sushant Shukla· ·15 min read
Singapore

Ser Kim Koi v Metalform Asia Pte Ltd [2006] SGHC 178

A director is not entitled to disclosure of documents covered by legal advice privilege, even if they are otherwise entitled to access company records under section 199 of the Companies Act, where the director is in a position of conflict with the company.

Sushant Shukla· ·12 min read
Singapore

Public Prosecutor v Lew Syn Pau and Another [2006] SGHC 146

A subsidiary's act of providing financial assistance for the acquisition of its holding company's shares does not ipso facto constitute the giving of financial assistance by the holding company itself, and the corporate veil between a parent and subsidiary is not pierced merely b

Sushant Shukla· ·15 min read
Singapore

Re Wan Soon Construction Pte Ltd [2005] SGHC 102

The court held that s 334 of the Companies Act applies to judicial management via s 227X(b), allowing the judicial manager to set aside an incomplete execution of a writ of seizure and sale.

Sushant Shukla· ·13 min read
Singapore

Chong Hon Kuan Ivan and Another v Levy Maurice and Others [2003] SGHC 302

A director who is not a shareholder may be joined as a party in an oppression action under s 216 of the Companies Act if they are alleged to be responsible for the oppressive conduct, even if no specific relief is sought against them.

Sushant Shukla· ·14 min read
Singapore

Bakery Mart Pte Ltd v Avante Investment Pte Ltd and Another [2002] SGHC 304

The court granted an interim injunction to maintain the status quo regarding the composition of the Board of Directors of Culina Pte Ltd pending the trial of the dispute over the existence of a shareholders' agreement.

Sushant Shukla· ·16 min read
Singapore

Wah Yuen Electrical Engineering Pte Ltd v Singapore Cables Manufacturers Pte Ltd [2002] SGHC 297

The court will not approve a scheme of arrangement under s 210 of the Companies Act where the company fails to provide sufficient transparency and disclosure regarding the debts of related parties, especially when such debts are necessary to meet the statutory majority requiremen

Sushant Shukla· ·12 min read
Singapore

Chaly Chee Kheong Mah, Po'ad bin Shaik Abu Bakar Mattar & 34 others practising in the name and style of Deloitte & Touche v The Liquidators of Baring Futures (Singapore) Pte Ltd [2002] SGHC 273

The Articles of Association of a company do not constitute a contract between the company and its auditors unless expressly incorporated into the engagement terms. Furthermore, general indemnity clauses in articles do not cover costs incurred in defending legal proceedings unless

Sushant Shukla· ·13 min read
Singapore

Gerhard Hendrik Gispen & ors v Ling Lee Soon Alex & anor [2001] SGHC 350

The court affirmed the Salomon principle of separate legal personality, holding that the corporate veil should not be lifted in the absence of fraud, sham, or impropriety, even if the company is a shelf company used to limit liability.

Sushant Shukla· ·15 min read
Singapore

Teo Lay Swee and Others v Teo Siew Eng and Others [2001] SGHC 29

The court will not interfere with management decisions of a company unless they have no commercial basis and/or unfairly prejudice minority shareholders.

Sushant Shukla· ·14 min read
Singapore

Quah Su-Ling v Inno-Pacific Holdings Ltd [2001] SGHC 197

The court held that a requirement as to the time for the doing of an act, unless it is a substantive time-bar provision, is a procedural requirement which the court has the power to abridge or extend.

Sushant Shukla· ·14 min read
Singapore

SH Sameyeh Pte Ltd v Hassan's Carpets Pte Ltd [2001] SGHC 179

The corporate veil will only be lifted if the company was used as a means of committing a fraud, and the 'single economic unit' argument is generally only relevant for statutory or document interpretation, not for pursuing shareholders for a company's commercial debt.

Sushant Shukla· ·13 min read
Singapore

Krishna's India Pte Ltd v Abdulmozhi d/o Krishnan and Another [2001] SGHC 159

A director breaches fiduciary duties by arranging the sale of company properties to her husband at an undervalued price without acting in the company's best interest. A third party who knowingly participates in such a breach is liable as a constructive trustee.

Sushant Shukla· ·14 min read
Singapore

Krishna's India Pte Ltd v Arulmozhi D/O Krishnan and Another [2001] SGHC 157

A director who arranges for the sale of company property to her husband at an undervalue, while failing to properly market the property or obtain independent valuations, breaches her fiduciary duties. A third party who knowingly participates in such a breach is liable as a constr

Sushant Shukla· ·15 min read
Singapore

KEA Holdings Pte Ltd and Another v Gan Boon Hock [2000] SGHC 8

A director of a company does not owe a fiduciary duty to the company's holding company or related companies to direct business opportunities to them, unless such a duty is specifically established.

Sushant Shukla· ·14 min read
Singapore

Personal Automation Mart Pte Ltd v Tan Swe Sang [2000] SGHC 55

A director is in breach of fiduciary duty if they set up a competing business to divert a maturing corporate opportunity for which the company was actively negotiating, even after resignation.

Sushant Shukla· ·12 min read
Singapore

Neil John Ryan v Exploration Png (S) Pte Ltd and Another [2000] SGHC 242

Section 216 of the Companies Act does not require a majority-minority situation; it can be invoked in a 50-50 shareholder deadlock where oppression or disregard of interests is established.

Sushant Shukla· ·13 min read
Singapore

The Official Assignee of the Estate of Ng Eng Kiat, Bankrupt and Others v Heap Huat Rubber Company Sdn Bhd and Another [2000] SGHC 177

The court held that there was no evidence of fraud to vitiate the res judicata effect of a prior dismissal of an originating summons, and that the articles of association did not grant pre-emptive rights to existing shareholders for share transfers between members.

Sushant Shukla· ·14 min read
Singapore

HOU CHAO (In his personal capacity and also in his representative capacity on behalf of Yong Zhen Yuan Pte. Ltd.) v GU XIAOLAN & 2 Ors

A common law derivative action requires the plaintiff to demonstrate a prima facie case of wrongdoing and locus standi under the 'fraud on the minority' exception. The court retains discretion to deny leave if the action is not in the company's best interests or is an abuse of pr

Sushant Shukla· ·14 min read
Singapore

Strategic Worldwide Assets Ltd v Sandz Solutions (Singapore) Pte Ltd and others (Tan Choon Wee and another, third parties) [2013] SGHC 162

The court held that the plaintiff was entitled to dividends declared by the company as it was the beneficial owner of the shares at the material time, and that the defendants failed to prove the alleged representations that the dividends were for their exclusive benefit.

Sushant Shukla· ·13 min read
Singapore

Khoh Chen Yeh Shane (administrator of the estate of Ching Kwong Kuen, deceased) v Seng Realty & Development Pte Ltd and another [2012] SGHC 79

In Khoh Chen Yeh Shane (administrator of the estate of Ching Kwong Kuen, deceased) v Seng Realty & Development Pte Ltd and another, the High Court of the Republic of Singapore addressed issues of Company Law.

Sushant Shukla· ·8 min read