NG YEW NAM & 3 Ors v ANTHONY LOH SIN HOCK & 5 Ors

Facts

ASTI Holdings Limited, a company listed on the Singapore Exchange's mainboard, received a delisting notification on 6 June 2022, and trading in its shares was suspended from 5 July 2022. Four shareholders, Mr Ng Yew Nam and three others (the convening shareholders), sought to replace the board. After the board declined their request, they used s 177 of the Companies Act 1967, which lets members holding at least 10% of the shares call a meeting, to call an extraordinary general meeting for 22 August 2023, with special notice under s 152 of resolutions to remove the incumbent directors and appoint their nominees.

The company did not supply an updated shareholder list, so the convening shareholders posted notices using a list as at 22 July 2022, gave notice to the exchange and advertised in two newspapers. By a letter of 2 August 2023 their solicitors said they would conduct and chair the meeting and that board members who were not members would not be allowed in. The incumbent directors and the company publicly declared the meeting invalid and told shareholders not to attend. At the meeting, by a majority of about 95.5% of those present and voting, the directors were removed and replaced.

The convening shareholders filed Originating Application No 855 of 2023 seeking declarations that the meeting and resolutions were valid; the company filed Originating Application No 861 of 2023 seeking the opposite.

Issues

1. Whether notice of the meeting was validly given under the company's constitution and the Companies Act.
2. Whether any defect in notice was procedural and curable under s 392 of the Act.
3. Whether shareholders who call a meeting under s 177 may conduct it to the exclusion of the directors.
4. Whether excluding the directors from the meeting could be cured under s 392.

Holding

Valerie Thean J dismissed the convening shareholders' application in OA 855, including an alternative prayer for directions under s 182, and in the company's application in OA 861 granted a declaration that the resolutions passed on 22 August 2023 were invalid and of no legal effect. Costs were left for written submissions, and time to appeal was directed to run from the date of judgment.

Reasoning

On notice, the court rejected the company's argument that an advertisement is not written notice. Service is governed by the constitution under s 177(4), and Art 48, the specific provision on notice of general meetings, required notice by newspaper advertisement and to the exchange, which was done; the general notices provision, Art 141(A), was permissive and did not also have to be satisfied. In any event, s 392 treats defects in notice as procedural irregularities, and there was no substantial injustice: the differences between the old and new shareholder lists were small and no one had complained of not receiving notice.

On conduct, the court held that calling a meeting and conducting it are distinct concepts, as s 182 shows and as explained in Naseer Ahmad Akhtar v Suresh Agarwal and another [2015] 5 SLR 1032. Section 177 is silent on who conducts the meeting, so the constitution decides. Art 52 allowed a member to chair if no director was present, but Art 76 gave every director the right to attend and speak at general meetings, and s 152 gave directors facing removal a right to be heard. Read together, the chairman would have had first option to chair if he attended. The 2 August letter denied those rights. Although the directors had not themselves asserted a right to be heard, the convening shareholders had rebuffed their attempts to discuss the meeting, and s 182 was available if no orderly procedure could be agreed.

Because the meeting's very purpose was to remove the excluded directors, their rights were substantive, not procedural, and s 392 could not validate the resolutions. Directions under s 182 were refused because calling or conducting a proper meeting was not shown to be impracticable.

From the judgment