GAN YUAN HONG v LMO CONSULTING PTE. LTD.

Facts

Gan Yuan Hong owns 60% of LMO Consulting Pte Ltd, a profitable company incorporated in February 2021 that provides regulatory compliance, trade support and corporate services, and he has been its sole executive director throughout. Siow Chee Wee bought the other 40% in May 2023 and was a non-executive director until he resigned on 17 December 2024; he left the running of the business to Mr Gan. Their relationship worsened in 2024 after Mr Siow asked about dividends and was told there would be none. In a lawyer's letter of 14 October 2024 he alleged oppression and breach of fiduciary duty and demanded that Mr Gan buy his shares for $1.4m, though he took no action on those complaints. Mr Gan offered instead to sell his own shares to Mr Siow at $2.1m, which Mr Siow declined.

Mr Siow also held up a resolution correcting an omitted comparative figure in the accounts and stayed away from general meetings, making them inquorate, though he signed the resolution on 26 February 2025. Mr Gan then proposed a members' voluntary winding up, which Mr Siow opposed. Mr Gan applied in Companies Winding Up No 108 of 2025 to wind up the company on the just and equitable ground in s 125(1)(i) of the Insolvency, Restructuring and Dissolution Act 2018. Mr Siow opposed the application as third party and alleged that Mr Gan was diverting business to Godwin Austen Advisory Pte Ltd, a company Mr Gan solely owns and directs.

Issues

1. Whether the shareholders' relationship had broken down in a way that made a just and equitable winding up appropriate
2. Whether there was a deadlock that left the shareholders unable to exit
3. Whether the claimant's conduct and motives barred him from equitable relief
4. Whether the court could order a buyout instead of winding up

Holding

Sushil Nair JC dismissed the application to wind up the company. Because the just and equitable ground was not made out, the court could not order a buyout under s 125(3) as Mr Siow had urged. The judge said he would hear the parties on costs.

Reasoning

The court stressed that s 125(1)(i) does not let a member exit at will, and that this applies equally to a majority shareholder at odds with a minority. Unfairness is the foundation of the jurisdiction. Following Tan Yew Huat v Sin Joo Huat Hardware Pte Ltd and another matter [2023] SGHC 276, an inability to exit is not enough without a breach of legitimate expectations beyond the constitution.

On breakdown, the company was not a quasi-partnership and there was no relationship of mutual trust and confidence or understanding outside the constitution. Mr Siow simply bought in and left management to Mr Gan. His complaints, even if unjustified, did not give the majority a right to wind up.

On deadlock, Mr Gan as sole director controlled management. Mr Siow's handling of the accounts amendment was unreasonable and somewhat petty, but he eventually signed and the delay was not significant. Since shares were freely transferable, Mr Gan could transfer a few shares to another person to solve the quorum problem. Refusing a voluntary winding up was not a breach of any legitimate expectation.

On conduct, the court found some evidence of diversion: Mr Gan had taken many corporate secretary appointments since the dispute began, the overlap between the two companies was significant, and he had chosen to expand the other company rather than LMO. The court inferred that the business would move to his company and that this was an important part of his motive. He had also not disclosed that company in his supporting affidavit. Equity therefore weighed against him, though the court said it would have dismissed the application even without this.

From the judgment