SH (BVI) Ltd v Steele Sva Holdings, LLC and another

Soneva Holdings Pte Ltd (SHPL) is the Singapore holding company of a group owning and operating luxury resorts in the Maldives. SH (BVI) Ltd, the vehicle of the Soneva founder Mr Shivdasani, holds about 24.8% of its ordinary shares; Steele SVA Holdings, LLC, an investment vehicle owned by a private equity fund and GIC, holds about 74.9% after converting its debt securities in May 2025. Relations broke down in 2024, with each side giving a different account, and led to earlier SICC proceedings. A settlement deed of 17 May 2025 and a new shareholders' agreement gave Steele board control, removed most of SH BVI's vetoes, and committed the parties to use reasonable efforts to exit by 15 November 2026. The agreement provided an Emergency Funding mechanism for liquidity needs at 15% a year, used twice in May and June 2025.

On 3 August 2025, a Sunday, SHPL gave notice of an issue of up to US$37 million of Class H Debt Securities, already approved by Steele's directors alone, with a three-day window for SH BVI to take up its share. The securities carried an 18% coupon compounding annually, ranked senior, and on an exit had to be redeemed at two times principal plus accrued coupons. SH BVI did not subscribe, and Steele took the first US$12 million tranche. SH BVI brought Originating Application No 21 of 2025 under s 216 of the Companies Act 1967, alleging oppression, and sought a buy-out of its shares.

1. Whether SH BVI had legitimate expectations that Steele's directors would act in the interests of SHPL as a whole, that liquidity funding would go through the Emergency Funding mechanism, and that it would take meaningful part in governance
2. Whether the issue of the Class H Debt Securities departed from those expectations so as to be commercially unfair
3. What relief was appropriate, including whether Steele should buy out SH BVI's shares

The parties were sophisticated and dealt at arm's length, so expectations came from their agreements read with the general law. The court held the issue was not a related party arrangement needing an SH BVI director's vote, because the constitution expressly treated Class H Debt Securities as securities that could be issued by simple majority. The group had a genuine need for capital, given an unchallenged loan default, overdue payables and infrastructure defects, but the US$37 million figure rested on a single high-level estimate, most of it remained undrawn for nearly a year while finances improved, and Steele made no real effort to approach other lenders it knew of.

The terms were extortionate. Applying the double multiplier to compounding interest gave returns far above Steele's own internal target, and penalty rates in earlier instruments were no benchmark for a baseline return. A clause allowing only Steele to assign its securities to a lender, while SH BVI's shares were already charged to Steele, was the tipping point showing the issue was structured to keep SH BVI out. Its directors therefore did not act bona fide in SHPL's interests as a whole.

Once a liquidity need objectively existed, the word "shall" in the Emergency Funding clause required Steele to use that mechanism, so bypassing it breached SH BVI's second expectation. Following DyStar Global Holdings (Singapore) Pte Ltd v Kiri Industries Ltd [2018] 5 SLR 193, the right to appoint directors carries a right to meaningful participation; presenting a decision already taken was a breach even though the formal steps were followed.

A buy-out was refused because the parties had agreed an exit mechanism, and the remedy was to correct the unfairness the Class H terms introduced into it while holding both sides to the agreed exit date.

The SICC allowed SH BVI's oppression claim in part. It refused the buy-out and the order concerning Mr Shivdasani's founder villa, and instead ordered that the Class H Debt Securities be varied to carry a 15% coupon compounding annually without the exit multiplier, that Steele procure SHPL to start a Marketed Sale process by 15 November 2026 with monthly progress reports to SH BVI's directors, and that no similar instruments be issued until the sale is complete. Costs were reserved.