Corporate Law

Minority Shareholder Oppression in Singapore

Written by Team Farallon | August 1, 2017

Minority oppression of shareholders in Singapore occurs when the majority shareholders in a company take action that unfairly prejudices the minority.

It most commonly occurs in Private Limited companies, because the lack of a public market for shares leaves minority shareholders particularly vulnerable, since minority shareholders cannot escape mistreatment by selling their shares and exiting the company.

The majority shareholders may harm the economic interests of the minority by refusing to pay the minority shareholder fairly, treating him in an unjust manner, and attempting to squeeze him out of the company.

In some case, the majority shareholders may physically lock the minority out of the corporate premises.

But most of the time, the majority does not update the minority about what goes on in the company, and when the time comes, they even deny the minority the right to inspect corporate records and books, making it necessary for the minority to take legal action every time it wants to look at them.

Fortunately, the law in Singapore is clear about this.

Section 216 of the Singapore Companies Act (Cap 50) (the Companies Act) provides that any shareholder of a company (including a minority shareholder) can apply to the Singapore Court on either of the following grounds:

This is not an exhaustive list.

The leading case in Singapore is Over & Over v Bonvests Holdings Ltd [2010] SGCA 7, where the Court of Appeal held that:

We successfully acted for a minority shareholder in achieving a buy out of his shares at a premium, and majority shareholders against spurious claims by minority shareholders against the majority and the company.

If you need a company lawyer in Singapore, please feel free to contact us for a legal consultation.

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