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Grounds publishedDecided 4 Nov 2026
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General Division of the High Court

Chuang Shaw Cheng v Senfu Realty (Pte) Ltd

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[2026] SGHC 229Case no. Companies Winding Up No 34 of 2025

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  1. Vinodh Coomaraswamy J:

  2. Introduction

  3. [1] The defendant, Senfu Realty (Private) Limited, was incorporated in 1971 by the late Mr Chuang Uming (the “Founder”) as a vehicle for holding real estate that would generate wealth for the Chuang family. The defendant still holds the family’s wealth in investment properties, directly and through its subsidiary, Bukit Timah View Property Pte Ltd (“BTVP”). The defendant’s members are five of the Founder’s children and his widow’s estate. In addition, the defendant itself is the registered holder of 275 of its own shares, as treasury shares within the meaning of s 4(1) of the Companies Act 1967 (2020 Rev Ed) (the “Companies Act”). Since 2015 the defendant’s only directors have been three of his sons, Mr Chuang Shaw Peng (“CSP”), Mr Chuang Shaw Boon (“CSB”) and Mr Chuang Shaw Choon (“CSC”) (together, the “Directors”). The Directors are not parties to these proceedings.

  4. [2] The claimant, Mr Chuang Shaw Cheng, is another of the Founder’s sons. He is one of the members of the defendant who are not Directors (the “other members”). He holds just over 19% of the defendant’s shares. He left Singapore in 1984 to study in the United Kingdom and has lived in the United States since about 1999. The claimant has never taken part in managing the defendant or any of the other family companies.

  5. [3] Three other companies feature in the parties’ dispute. They are: (a) Tropical Builders (Pte) Limited (“TBPL”); (b) Chuang Uming (Pte) Ltd (“CUPL”); and (c) Chuang Realty (Private) Limited (“CRPL”). TBPL, CUPL and CRPL are held, directly or indirectly, by members of the Founder’s family. For reasons that will become apparent (see [9] below), I refer to these three companies collectively as the “Borrowers”. The Directors are the only directors of all three Borrowers.

  6. [4] The claimant applies under s 125(1) of the Insolvency, Restructuring and Dissolution Act 2018 (2020 Rev Ed) (the “Act”) to wind the defendant up on three grounds, each in the words of the Act:

  7. [5] In the application as filed, the claimant sought only a winding-up order as a remedy. In May 2026, in the course of the hearing, I gave the claimant permission to amend his application to seek, as alternative relief, an order under s 125(3) of the Act that the defendant purchase his shares in the defendant (a “purchase order”).

  8. [6] I have decided this application in the claimant’s favour. But I have declined to make a winding-up order. I have instead made a purchase order. The purchase order requires the defendant to buy the claimant’s shares at a fair value that I will determine. I have appointed Mr Jason Aleksander Kardachi of Kroll Pte Limited as the single joint expert (“SJE”) to give his opinion on that value. I had earlier appointed Mr Kardachi as the SJE to give his opinion principally on the insolvency ground.

  9. [7] The defendant has appealed against my decision. These are the grounds for my decision.

  10. Summary of the decision

  11. [8] I have found that the claimant has established both the unfairness ground and the equitable ground.

  12. [9] The Directors have acted in the affairs of the defendant in their own interests rather than in the interests of the members as a whole (see [18] below). This is the first limb of the unfairness ground (the “first limb”). For two decades the defendant has left more than $10m with the Borrowers (the “Related Party Loans”). The loans are on no terms. The Directors have made no attempt at recovering the loans (see [20], [28] and [35] below). Since 2015 the decision to keep this money with these companies has been the Directors’ alone (see [35] below). The Directors hold a larger stake in two of those companies, TBPL and CUPL, than they hold in the defendant (see [37] below).

  13. [10] The Directors have acted in the affairs of the defendant in a manner unfair and unjust to the other members (see [101] below). This is the second limb of the unfairness ground (the “second limb”). Their conduct consists of three matters, each taken together with the Related Party Loans: (a) the Directors have withheld dividends for nearly 20 years while two of them have drawn salaries from the defendant (see [82] below); (b) the defendant’s accounts were qualified for seven years, from 2017 to 2023, and were repeatedly laid before the members late (see [90] below); and (c) the Directors prevented the claimant from attending the 2024 annual general meeting (“AGM”) (see [95] below). The Related Party Loans were also made in apparent breach of s 163 of the Companies Act, and the Directors are in apparent breach of s 157(1) of the same Act (see [110] below).

  14. [11] It is just and equitable to wind the defendant up, for two reasons: (a) the conduct that I have found under the unfairness ground discloses a lack of probity that justifies the claimant’s loss of confidence in the management of a family company (see [119] and [134] below); and (b) the claimant has no viable means of withdrawing his capital at fair value (see [141] below).

  15. [12] It is not necessary to decide the insolvency ground. A finding of insolvency could have led only to the winding-up order that I have declined to make (see [165] below). Even so, had it been necessary to decide the insolvency ground, I would have found that the claimant had failed to prove that the defendant is unable to pay its debts (see [166] below).

  16. [13] A purchase order, not a winding-up order, is the just and equitable remedy, for three reasons: (a) a winding-up order would force sales of the defendant’s properties to the detriment of members who bear no responsibility for the Directors’ conduct; (b) a purchase at fair value meets the whole of the claimant’s grievance without inflicting that detriment; and (c) neither party seeks a winding-up order (see [182]–[186] below). Nothing in the Companies Act or in the defendant’s articles of association precludes an order requiring the defendant to buy its own shares.

  17. [14] Section 125(3) of the Act allows me to order the defendant to buy the claimant’s shares. That is because the claimant has established both the unfairness ground and the equitable ground (see [179] below). Section 125(3) allows the court to make a purchase order instead of a winding-up order only if one of those two grounds is established. The purchase order requires the defendant to buy the claimant’s shares and expressly permits any member to elect to buy them in the defendant’s place (see [226] below).

  18. [15] I will determine the fair value of the claimant’s shares after receiving the SJE’s valuation report (see [196] below). I have directed the SJE to value the shares without discount and primarily on a net asset basis as at two dates (see [202], [210] and [212] below). I have also directed him to bring the Related Party Loans into account on three alternative bases: (a) at nil; (b) at full book value; and (c) at fair recoverable value (see [214] below). The operative terms of the purchase order are set out in the Annex to these grounds.

  19. [16] I now set out my reasons in full.

  20. The Directors have acted in their own interests

  21. [17] The unfairness ground has two limbs. The first is that the directors have acted in the affairs of the company in their own interests rather than in the interests of the members as a whole. The second is that they have acted in any other manner which appears to be unfair or unjust to other members.

  22. [18] The Directors have acted in the affairs of the defendant in their own interests rather than in the interests of the members as a whole in four ways: (a) by advancing and maintaining the Related Party Loans on no terms; (b) by making no attempt to recover them from the Borrowers; (c) by adding to them, partly with money that the defendant borrowed from a bank; and (d) by causing the defendant to take over CRPL’s expenses.

  23. [19] The first three of these four ways rest on the history of the Related Party Loans, which I now set out.

  24. The loans have stood above $10m for 20 years, largely unrepaid

  25. [20] The defendant’s accounts have carried more than $10m due from the Borrowers on the Related Party Loans every year since at least 2004. During that period, there has been at most one repayment of substance. There is little prospect of recovering these loans in the immediately foreseeable future (see [26] below). The SJE was given no agreement or other document showing when or on what terms any of the loans was made.

  26. [21] The Founder set up each of the Borrowers. None of them is a subsidiary of the defendant. CUPL is wholly owned by TBPL. TBPL and CRPL are each held directly by members of the Founder’s family in differing proportions. The Directors and the claimant are among the members of those two companies.

  27. [22] CSP’s evidence is that the Related Party Loans began in the Founder’s lifetime, as his way of supporting whichever family company needed money (the “Founder’s practice”). Between 2004 and 2018 the balance due on the loans never fell below $10m. It was $10.16m at the end of 2008. At the end of 2012 it stood at nearly $14m, at $13.77m. It was $13.31m at the end of 2018.

  28. [23] In 2019, the balance due on the Related Party Loans fell by $3.14m, net of further advances, to $10.17m. The minutes of the defendant’s AGM of August 2021 record CSP, as the chairman of the meeting, saying that CUPL had paid the defendant $3.21m in 2019. But the SJE was given no document corroborating any repayment. If CUPL made that payment, it is the only repayment of substance in 20 years. The balance then rose to $10.32m by the end of 2021. At the end of 2024 it was $10.19m. That is about what it had been at the end of 2008, 16 years earlier. By 2024, CUPL owed the defendant about $6.50m, TBPL owed about $1.74m and CRPL owed about $1.96m, against $6.45m, $1.93m and $1.79m respectively five years earlier.

  29. [24] CSP points to CRPL’s repayment of $150,000 in August 2023 as showing that the Related Party Loans are historical and recoverable. But that repayment does not alter the history. Indeed, the repayment does not even show in the total due from the Borrowers. That total stood at $10,295,744 at the end of 2022 and was $10,196,352 at the end of 2023. That is a fall of only about $99,000. CRPL’s repayment was either offset by further advances or is not properly reflected in the balances.

  30. [25] The Related Party Loans led the defendant’s auditors (the “Auditors”) to qualify their opinion on the defendant’s accounts for every year from 2017 to 2023. The accounts were qualified because the defendant did not give the Auditors sufficient evidence of the timing and amount of any recovery of the Related Party Loans. In the 2022 accounts, the Auditors noted that most of the balance had been outstanding for more than three years.

  31. [26] The SJE’s opinion is that the Related Party Loans are unlikely to be realised in the immediately foreseeable future. His terms of reference in this phase of the litigation asked him to report on the insolvency ground as well as on the amount and recoverability of the Related Party Loans. His opinion on the low likelihood of recovery rests on the Borrowers’ constrained capacity to service debt in the near term and their elevated risk of default. As the claimant submits, any recovery will be possible only upon the sale of the Borrowers’ real properties. The defendant’s own 2022 accounts had already recorded that repayment of the Related Party Loans is “neither planned nor likely to occur in the foreseeable future”.

  32. The loans carry no term that serves the defendant

  33. [27] The Related Party Loans are unsecured and have been extended on no terms. The loans earn the defendant no return. Over 5% of the Related Party Loans is a sum of $550,000 that the defendant itself drew on a money market loan with United Overseas Bank Limited (“UOB”) and then on-lent to CUPL and CRPL. The UOB loan is secured by a first legal mortgage over the defendant’s four real properties. That mortgage ties up the defendant’s properties as security for $550,000 that the defendant does not need and cannot use. The defendant’s total borrowing from UOB was $2.65m at the end of 2019 and has stood at $550,000 since the end of 2023. In May 2024, UOB renamed the money market loan as a revolving credit facility with a limit of $6m.

  34. [28] No agreement, written or oral, fixes any term of the Related Party Loans. The minutes of the defendant’s AGM of August 2021 record that it “has only accounting records of the loans and there are no loan agreements”. The minutes of CRPL’s AGM of May 2024 record that CSP, again as chairman, responded that “they do not sign loan agreements”.

  35. [29] The only interest that the defendant is shown, on the evidence, to have charged the Borrowers on the Related Party Loans is a recharge to CUPL and CRPL of the interest that UOB charges the defendant on the $550,000 it has on-lent. But there is no evidence that the Borrowers have ever actually paid the recharge.

  36. [30] It is true that Note 7 to the 2022 accounts records interest at rates between about 1.26% and 4.89% a year. But no evidence connects those rates with any charge other than the UOB recharge. When I asked whether there were written loan agreements stipulating the rate of interest, defendant’s counsel answered “No, Your Honour”. When I asked whether interest was being paid at all, counsel answered “[n]ot for all”.

  37. [31] CSP points out that the Borrowers “have consistently provided audit confirmations” of the Related Party Loans. He also asserts that “[i]ntercompany loans are structured in accordance with prevailing banking standards”. Neither the audit confirmations nor CSP’s bare assertion establishes any term of the Related Party Loans. An audit confirmation of a balance may establish the existence of a loan but in no way establishes its terms. And CSP points to no agreement establishing how the Related Party Loans “are structured in accordance with prevailing banking standards” (see [28] above).

  38. [32] I accept the claimant’s submission that, on these terms, the Directors have left the defendant’s money at the Borrowers’ indefinite disposal, with no return to the defendant. This is also the SJE’s opinion. He said that the absence of loan agreements and enforceable terms “suggests that these loans may have functioned as capital contributions and lack the characteristics of a bona fide loan”. At the same CRPL meeting (see [28] above), CSP explained that the Founder’s practice “was designed to move money around in order to support and grow the group collectively, benefiting shareholders, including his wife and children, instead of focusing on any specific company”. Ms Grace Soh, at that time the claimant’s solicitor, attended that meeting. Ms Soh sought CSP’s confirmation that the Founder’s practice was to move the funds around between the companies. CSP confirmed it. When she asked whether the practice was still the same, CSP confirmed that it “has remained consistent”.

  39. The decisions since 2015 have been the Directors’ own

  40. [33] Each of the Directors’ decisions since 2015 – to keep the Related Party Loans outstanding, to add to them and to bear CRPL’s expenses – is conduct in the affairs of the defendant (see [18] above). Leaving the Related Party Loans outstanding year after year is as much conduct in the affairs of the defendant as advancing those loans in the first place was. The phrase “affairs of the company” is “a wide description encompassing all matters which may come before the Board for consideration” (see Phua Kiah Mai v The Kheng Chiu Tin Hou Kong and Burial Ground [2025] 4 SLR 1580 (“Phua Kiah Mai”) at [51]). Whether to call in a loan, to charge interest on it or to document it is just such a matter.

  41. [34] Nothing in the evidence shows that the board ever considered calling in, charging interest on or documenting the terms of the Related Party Loans. A settled course of leaving the defendant’s money with the Borrowers, even though an omission rather than an act, is conduct. It amounts to a decision about that money, even though no meeting of the board ever considered or resolved on it. That conduct is conduct in the defendant’s “affairs”, because matters that never come before a board but should have are just as surely within the “affairs” of the defendant as matters that do. Any other reading of “affairs” would let a director take a matter outside the first limb simply by keeping it from the plenary board.

  42. [35] The Directors have made no attempt to recover the Related Party Loans. The defendant does not point to any demand or other step to recover them. The Directors alone are responsible for these acts or omissions of the defendant since 2015. That is when they became the whole of its board (see [1] above). The board is under the ultimate control of the members. CSP and CSB between them hold just over 59% of the defendant’s shares. They are therefore also responsible for these omissions as members. Before 2015 CSC, CSP and CSB served on the board with other members of the family, including the Founder until he died in 2007. I am prepared to accept, therefore, that the Directors are not solely responsible for the defendant’s omissions before 2015.

  43. [36] I find that the Directors have also added to the Related Party Loans since 2015. The total balance rose between 2019 and 2021 (see [23] above). The amounts owed by CUPL and CRPL rose between 2019 and 2024 (see [23] above). Those increases came either from fresh advances or from recharges of interest left unpaid (see [29] above). Either way, the money that the defendant had left with the Borrowers grew over those periods. And the defendant has on-lent to CUPL and CRPL the whole of the $550,000 drawn from UOB (see [27] above).

  44. The loans serve the Directors’ larger interests in TBPL and CUPL

  45. [39] Here the comparison of their stakes shows that the Directors serve their own interests when they cause the defendant to benefit TBPL and CUPL. Directors may be found to have acted in their own interests if they act in the interests of another company of which they are also directors and members (see Phua Kiah Mai at [76], citing Re Cumberland Holdings Ltd (1976) 1 ACLR 361 at 375). Each Director holds a larger stake in TBPL, and through it in CUPL, than he owns in the defendant (see [37] above).

  46. [41] I accept the claimant’s submission that directors may be found within the first limb if they prefer their own interests to those of “one or more or some significant section of the members” (see Phua Kiah Mai at [51], and to the same effect Re HL Sensecurity Pte Ltd [2006] SGHC 135 (“HL Sensecurity”) at [28]). The claimant is one such member. He bears just over 19 cents of each dollar left with TBPL or CUPL and receives 10 cents through his holding in TBPL. CSP’s evidence is that, through that holding, the claimant “has benefitted from [TBPL’s] growth”. But that holding returns to the claimant only about half of what he bears. The rest of TBPL is held by Mr Chuang Shaw Yee, who holds no shares in the defendant. No other member of the defendant holds shares in TBPL. The members who are neither Directors nor the claimant bear their share of each such dollar with no benefit at all.

  47. [42] I do not accept the defendant’s submission that CSP’s and CSB’s combined TBPL holdings “are proportionate to their shareholding in the Defendant”, so that “they do not stand to derive any personal benefit”. CSP and CSB hold 70% of TBPL against just over 59% of the defendant (see [37] above). And CSC holds shares in TBPL but none in the defendant.

  48. [43] CSP’s objection that the comparison imputes no wrongdoing does not address my finding that the conduct serves the Directors’ own interests. In my view, neither limb of the unfairness ground requires wrongdoing or illegality. The first limb asks whose interests the conduct served (see [56] below). The second limb is concerned with “commercial morality or integrity which the law ought to uphold” (see Kho Choon Keng v Lian Keng Enterprises Pte Ltd [2026] 3 SLR 255 (“Kho Choon Keng”) at [35]). Defendant’s counsel accepts that conduct may be perfectly legal and yet unfair and unjust, or illegal and yet not unfair and unjust.

  49. The CRPL balance leaves the preference intact and its expenses add to it

  50. [44] I make three points about CRPL on the first limb: (a) the first limb does not rest on the CRPL balance, because the Directors hold a smaller stake in CRPL than they hold in the defendant; (b) the Directors still gain overall on the total balance; and (c) the defendant’s assumption of CRPL’s expenses serves their larger interest in TBPL.

  51. [45] First, my finding on the first limb does not rest on the CRPL balance. The Directors and the claimant each hold about 9.1% of CRPL. The Directors together hold about 27.3% of it. That is less than half their stake in the defendant. CSP’s own evidence is that CSP and CSB have “much less shares in CRPL”. Whether the CRPL balance is unfair to the other members is therefore not within the first limb. I shall deal with it as a matter for the second limb (see [103] below).

  52. [46] Second, when I look at the total balance, the effect of the Related Party Loans is that the Directors together still gain more than they lose. At the end of 2024 TBPL and CUPL together owed the defendant about $8.24m (see [23] above). On each dollar of that sum, the Directors gain 80 cents and bear about 59 cents (see [38] above), a net gain of about 21 cents. Across the $8.24m, their net gain comes to about $1.7m. On each dollar of the CRPL balance (see [23] above) the Directors bear about 59 cents as members of the defendant and gain about 27 cents as members of CRPL, a net loss of about 32 cents. Across that balance, their net loss comes to about $0.6m. Their net gain of about $1.7m on TBPL and CUPL is far greater than, and nearly three times, that loss.

  53. [47] It matters not that CSB’s position over the three balances is slightly adverse. The same arithmetic, applied to each Director’s own holdings, gives these results. CSP gains about $0.69m on TBPL and CUPL and loses about $0.44m on CRPL. CSB gains about $0.20m and loses about $0.36m. CSC gains on all three balances. So only two of the three Directors, CSP and CSC, gain overall. But the first limb does not require the interests of the whole board to be advanced, so long as the interests of a majority of the board are advanced. It is “sufficient if the effective majority has acted in their own interests or the interests of one or more of those Board members” (see Phua Kiah Mai at [51]).

  54. [49] It matters not that, on CSP’s evidence, the defendant will support CRPL only until CRPL’s property produces a stable rent, from which CRPL will repay its loans. The defendant submits that the money lent to CRPL funds addition and alteration works on CRPL’s property for the benefit of the whole family. But the SJE has seen no executed lease of that property and no evidence of the progress or completion of the works. And whether CRPL repays from any rent will be for the Directors to decide (see [3] above).

  55. The UOB borrowing and the guarantee add to the preference in combination

  56. [50] Two transactions add to the Directors’ preference of their own interests: (a) the on-lending of the UOB money to CUPL; and (b) the defendant’s guarantee of its subsidiary’s bank facility, when taken in combination with the Related Party Loans.

  57. [52] The defendant’s guarantee of the $23m bank facility of its subsidiary, BTVP, is not, taken alone, a preference of the Directors’ interests. BTVP is held 75% by the defendant and 25% by CSP. It is therefore a subsidiary of the defendant within the meaning of s 5(1) of the Companies Act. The facility, from DBS Bank Ltd, is fully drawn, secured by mortgages over BTVP’s properties and rolled over periodically. The guarantee is a material contingent liability of the defendant. The claimant submits that the guarantee has no commercial justification. But I accept CSP’s evidence that the defendant’s decision to secure bank borrowings of $23.7m was a legitimate commercial decision and that the defendant’s corporate guarantee is standard banking practice.

  58. [53] It is in combination with the Related Party Loans that the guarantee and the UOB borrowing have served the Directors’ interests. The UOB borrowing has served those interests in two ways. First, the $550,000 that the defendant has drawn and on-lent to CUPL and CRPL is itself part of the Related Party Loans. It benefits those companies directly (see [27] above). Since the end of 2023, that $550,000 has been the whole of the UOB borrowing. Second, before 2023 the UOB borrowing was larger. It was $700,000 at the end of 2020 and of 2022. To the extent that the proceeds of the borrowing were not on-lent, the borrowing stood in for the more than $10m that the defendant had left with the Borrowers. In the same way, BTVP’s guaranteed borrowing has stood in for that $10m.

  59. [54] Had the Directors caused the defendant to recover the Related Party Loans, the defendant would have had more than $10m of its own capital to use in place of either borrowing. About $8.24m of that capital is with TBPL and CUPL (see [23] and [46] above). I accept the substance of the claimant’s submission that neither the borrowing nor the guarantee would have been needed but for the Related Party Loans.

  60. [55] The guaranteed facility has in fact stood in for the UOB borrowing. In 2020 BTVP drew on its guaranteed facility to repay about $2.1m that it owed the defendant. The defendant used that money to repay about $2.1m of its UOB borrowing. The defendant’s UOB borrowing fell in that year from $2.65m to $700,000.

  61. No gain to the Directors or loss to the defendant need be proved

  62. [56] The defendant’s five answers, on gain, interest and principal, recovery, BTVP and overlapping holdings, go to matters other than the first limb’s question of whose interests the Directors’ conduct serves. None of these answers shows that the conduct serves the interests of the members as a whole.

  63. [57] As for the defendant’s first point on gain, the first limb asks whether the directors preferred their own interests to those of the members as a whole (see Phua Kiah Mai ([33] supra) at [51] and HL Sensecurity ([41] supra) at [28]). It follows, in my view, that the first limb does not ask whether the directors made a quantified gain or the company suffered a quantified loss, the absence of which the defendant relies on. In Phua Kiah Mai the controlling directors preferred their own interests by replacing board meetings with informal meetings and by truncating the board’s consideration of financial matters. That conduct established the first limb (at [61] and [70]) even though there was no finding of quantified gain or loss.

  64. [58] As for the defendant’s second point on interest, I find that the Related Party Loans were not made, as the defendant submits, to benefit it through future interest and principal. In 20 years the Borrowers have made at most a single repayment of substance (see [23] above). Nor is there evidence that they have paid the recharges of interest (see [29] above).

  65. [59] As for the defendant’s third point on recovery, I do not accept the defendant’s submission that a loan whose recovery is “not completely ruled out” shows no preference, especially where the borrower holds real property and therefore carries the prospect of capital appreciation. The defendant relies on the SJE’s opinion that CUPL and CRPL may repay the Related Party Loans in the longer term from the sale of their properties. And it is true that any gain to the Directors is illusory if CUPL and CRPL repay the loans in full. But the SJE gave that opinion subject to timing and execution risks. And whether and when the Borrowers sell is for the Directors to decide, as the only directors of these two companies (see [3] above).

  66. [61] As for the defendant’s fourth point on BTVP, its success says nothing about whose interests the Related Party Loans serve. That is so even if, as the defendant submits, BTVP’s capital, rental income and management have benefited all the defendant’s members. BTVP is a subsidiary of the defendant and is not one of the Borrowers. The claimant’s complaint about BTVP is a different one, about how BTVP came to be set up and how CSP came to hold 25% of it (see [52] above).

  67. [62] As for the defendant’s fifth point on overlapping holdings, my finding that the Directors have preferred their own interests rests on the terms (see [28] above), the duration (see [20] above) and the non-recovery (see [23] and [35] above) of the Related Party Loans. My finding does not rest on overlapping shareholdings alone. I reject the defendant’s submission that those shareholdings are the only link, so that more must be shown before the discretion to make a winding-up order on the unfairness ground is enlivened. I have examined the Directors’ shareholdings in the Borrowers and in the defendant only to show whose interests the Directors’ conduct has served (see [38] above). I have not examined those shareholdings in place of a finding on the nature of their conduct. Defendant’s counsel accepts that the claimant need show nothing beyond the test in s 125 of the Act, on the balance of probabilities, to enliven the discretion to make a winding-up order. That test is met.

  68. [63] It matters not that, as the defendant submits, it is commonplace in family-run businesses for directors to sit on several boards. My finding does not rest on the Directors’ seats on the boards of the Borrowers. It rests on their conduct, as the defendant’s directors, in connection with the Related Party Loans.

  69. Neither the Founder’s practice nor the family’s interest is an answer

  70. [64] I do not consider it material that, according to the defendant, the Directors have done no more than to continue the Founder’s practice in good faith, intending to benefit all the members. Neither the Directors’ good faith, nor the Founder’s practice nor even the family’s interest takes the Directors’ conduct outside the first limb. I say that for five reasons.

  71. [65] First, the first limb looks to how the Directors’ conduct is objectively seen, not to what they subjectively intended. Directors may be found within the first limb where they are “seen not to have been acting in the interests of all the members” (see HL Sensecurity ([41] supra) at [28] and see also EQ Capital Investments Ltd v The Wellness Group Pte Ltd [2019] SGHC 154 (“EQ Capital”) at [21]). Defendant’s counsel accepted that the test is “an objective one”.

  72. [66] Second, the Directors hold and exercise their powers for the defendant, not for the family or for the other family companies. I therefore do not accept the defendant’s submission that benefit to the defendant must be judged across all of the family’s companies because they share one founding motive and their members all belong to one family. Defendant’s counsel accepts that family membership does not release directors from acting in the interest of each company as a whole. Even within a formal group structure – ie, one comprising an ultimate holding company and a proliferation of subsidiaries – each company remains a separate legal entity. The director of any one group company may consider the group’s interests, but cannot do so at the expense of the group company that they direct (see Evotech (Asia) Pte Ltd v Koh Tat Lee [2018] SGHC 252 at [61] and see also Intraco Ltd v Multi-Pak Singapore Pte Ltd [1994] 3 SLR(R) 1064 at [28]–[29], approving Charterbridge Corp Ltd v Lloyds Bank Ltd [1970] Ch 62).

  73. [67] As the claimant submits, the separate-entity principle applies with greater force in this case. The defendant asserts that it, BTVP, CRPL and TBPL function “as part of an integrated family group”. But none of the Borrowers is a company in the defendant’s “group” at all (see [21] above). Only BTVP is a true subsidiary of the defendant and therefore a group company (see [52] above). The Borrowers are linked to the defendant only by having members in common. Each Borrower’s interest is therefore distinct from the defendant’s interest. The defendant has not shown how the assertion that the companies function as an integrated family group, even if true, answers the first limb.

  74. [68] Third, I accept that the Founder’s practice explains fully how the Related Party Loans began (see [22] above). The Related Party Loans are historical, arising from inter-company arrangements within the family companies. But the Founder’s practice and the historical origin do not begin to explain adequately the Directors’ decisions since 2015 to let the Related Party Loans continue on no terms without any attempt at recovery (see [35] above). Nor have the members at any time ratified those decisions or been asked to do so. The claimant’s evidence is that he is not aware of the members’ approval ever being sought for the Related Party Loans. The defendant does not suggest that the Directors have ever done so. CSP’s evidence is simply that no auditor, banker or member has ever objected to the Related Party Loans. But absence of objection is not approval. And it remains the case that the Auditors have qualified their opinion precisely because of concerns about the Related Party Loans (see [25] above).

  75. [69] Fourth, I find that informality within and between family companies does not explain the Related Party Loans left for 20 years on no terms, even if, as the defendant submits, loans between family-run companies are naturally advanced in a more informal manner. Informality in advancing the loans does not explain leaving the loans on no terms (see [23], [28] and [29] above).

  76. The conduct meets any test of commercial morality the first limb requires

  77. [71] Whether or not the first limb requires conduct contrary to commercial morality, I find that leaving more than $10m with the Borrowers for 20 years on no terms meets that test (see [20] above). The question arises because, in Phua Kiah Mai ([33] supra), the conduct in the interests of another company “did not rise to the level of being contrary to commercial morality or integrity” (at [76]). The conduct in question there was the company’s joint celebrations with a federation that its chairman and others had set up, and work that the company’s secretariat did for that federation (at [75] and [76]). The conduct here (see [18] above) is of a different order.

  78. [72] In arriving at my finding that the Directors have preferred their own interests, I have not relied on the further points that the claimant makes about the defendant’s lending. The claimant makes the following further points: (a) the transfer of about $14,400 to CUPL in December 2019, which on CSP’s evidence he made good personally; (b) CRPL’s own lending to TBPL and to other family companies; and (c) the Directors’ own borrowings from TBPL and CRPL. I do not find it necessary to decide these points.

  79. [73] The claimant has therefore established the first limb of the unfairness ground. I now turn to the second limb.

  80. The Directors have acted unfairly and unjustly to the other members

  81. [74] The Directors have also acted in the affairs of the defendant in a manner unfair and unjust to the other members within the meaning of the second limb of the unfairness ground (see [17] above). The same conduct may fall within both limbs, as it did in Phua Kiah Mai (at [70]).

  82. [75] The conduct that engages the second limb is the conduct found under the first limb, together with the Directors’ use of the dividend discretion and their conduct of the accounts and general meetings. The conduct under the first limb that I refer to is the four ways in which the Directors have acted in connection with the Related Party Loans (see [18] above). The dividend discretion is the Directors’ power over the defendant’s dividends (see [78] below). Each of these matters, alone and together with the others, is unfair and unjust to the other members.

  83. The Directors withheld dividends to keep the earnings with the Borrowers

  84. [76] The Directors have not exercised the dividend discretion bona fide for the proper purposes of the defendant. That is a finding of improper purpose, not of dishonesty. A phrase such as “bona fide in the interest of the company as a whole”, if it does anything more than restate the general principle applicable to all fiduciary powers, at best serves to exclude directors “improperly favouring one section of the shareholders against another” (see Howard Smith Ltd v Ampol Petroleum Ltd [1974] AC 821 (“Howard Smith”) at 835).

  85. [77] The defendant has declared no dividend since 2007. Yet its retained earnings stood at about $10.2m at the end of 2024. The question is what the Directors have done with those earnings.

  86. [78] The Directors’ powers over dividends under the defendant’s articles of association (the “Articles”) are fiduciary powers, to be exercised only for the purpose for which they are conferred (see Howard Smith at 834). The Articles provide that the defendant in general meeting may declare no larger dividend than the Directors recommend. The Directors may also pay interim dividends.

  87. [79] Since 2015 the choice whether to pay a dividend has been the Directors’ alone (see [35] above). I accept the claimant’s submission that a sustained refusal to distribute, while benefits flow to the Directors, may suffice to show an improper purpose.

  88. [80] The substantial purpose that the Directors’ withholding of dividends in fact served was to keep the defendant’s earnings available to the Borrowers. In identifying that purpose, the court gives credit to the directors’ bona fide opinion on management but looks at the situation objectively (see Howard Smith at 832 and 835). At the end of 2024 the defendant had about $55,000 in cash against its retained earnings (see [77] above). The Related Party Loans then stood at about $10.19m (see [23] above). The SJE does not treat these loans as available to the defendant, because they have no enforceable terms of repayment. The undistributed earnings are, therefore and in substance, the money that the defendant has left with the Borrowers. The Directors could have funded dividends by recovering the Related Party Loans but have made no attempt to recover them (see [35] above). Honest behaviour by the Directors would not, in itself, make that purpose proper (see Howard Smith at 838).

  89. [81] Two of the Directors drew salaries from the defendant throughout those years. CSP and CSB are each paid monthly salaries by the defendant and by BTVP, albeit at rates not increased for a considerable period. On CSP’s evidence, his salaries from the defendant and BTVP together come to about $15,500 a month, of which the defendant pays about $7,700. CSB’s come to about $9,800 a month, of which the defendant pays about $3,200. The Directors fixed those salaries themselves, without the members’ approval.

  90. [82] The withholding therefore deprived only the other members of any return from the defendant. The other members hold just over 40% of the defendant’s shares. They have had no return from the defendant for nearly 20 years, while CSP and CSB have received their salaries (see [81] above). Where a director who is also a member uses his powers to pay no dividend while he is paid a salary, a member who is not a director is deprived of an income on his capital, whatever the size of the salary.

  91. The defendant’s explanations do not account for the absence of dividends

  92. [83] None of the defendant’s five explanations accounts for withholding every dividend for nearly 20 years while two Directors drew salaries. Each explanation goes to whether the Directors were empowered to withhold dividends, not to the purpose that the withholding in fact served (see [80] above).

  93. [84] As for the defendant’s first point on obligation, it matters not that members have no right to a dividend. It is common ground that directors are under no obligation to declare dividends and that members have no right to receive them. A failure to declare dividends does not by itself amount to unfair conduct (see Lim Kok Wah v Lim Boh Yong [2015] 5 SLR 307 (“Lim Kok Wah”) at [145]). Whether to declare a dividend, and how much to distribute, is for the board (at [146]). But my finding is that the Directors have exercised the dividend discretion for a purpose other than the defendant’s purpose (see [76] above). The court does not assess the business merits of such a decision. It asks whether the decision is attended by commercial unfairness (at [134]).

  94. [85] As for the defendant’s second point on reinvestment, a strategy of reinvestment does not explain leaving the defendant’s retained earnings with the Borrowers, even if, as the defendant submits, it has pursued a long-term strategy of capital appreciation and reinvestment in its properties. The retained earnings are held, in economic substance, in the Related Party Loans and not in the defendant’s properties (see [80] above). Nor is there a want of the available profits out of which, as the defendant also submits, any dividend must be paid. CSP describes the defendant as “a financially stable and profitable company with a steady income stream”. And the chance that the Related Party Loans may be recovered in full one day does not make the loans a reinvestment (see [59] above).

  95. [86] As for the defendant’s third point on CRPL, the claimant’s own debt to CRPL does not explain the withholding. That is so even if, as CSP says, CRPL could have repaid the defendant and dividends could have been declared if the claimant had repaid what he borrowed from CRPL. CRPL owed only about $1.96m of the $10.19m due to the defendant at the end of 2024 (see [23] above). The balances of TBPL and CUPL, about $8.24m, do not depend on the claimant’s debt to CRPL (see [46] above). And the Directors alone direct all three Borrowers (see [3] above). Whether CRPL recovers its loan from the claimant, and whether any borrower repays the defendant, is for them alone to decide.

  96. [87] As for the defendant’s fourth point on exit, I do not accept the defendant’s submission that a member’s real interest lies in the value of his shares and that a member from whom an income is withheld can simply sell his shares to the other members. A member’s interest in his shares includes an interest in the proper exercise of the dividend discretion, on which any return on his capital depends while he holds them (see [76] above). And the claimant cannot in fact sell his shares to the other members, none of whom has been willing to buy them at any price (see [151] below).

  97. [88] The possibility that a member may sell his shares is also beside the point. My finding concerns the purpose for which the Directors withheld dividends. That purpose was to keep retained earnings at the disposal of the Borrowers (see [80] above). What a member might do with his shares has no bearing on why the Directors withheld dividends. For the same reason, the defendant’s submission that the second limb is not a test of legitimate expectation fails. My finding rests on the Directors’ improper purpose, not on any expectation of the claimant’s.

  98. [89] As for the defendant’s fifth point on salaries, it matters not that, as the defendant submits, there is no evidence that the salaries were excessive. It is equally immaterial that, for managing a property portfolio worth about $50m, the Directors consider themselves underpaid. My finding does not depend on the salaries being excessive. Indeed, I make no finding that they are. I accept that CSP and CSB are paid their salaries as employees, for their service to the defendant. But the Court of Appeal has considered it clearly unfair for those in control to distribute a company’s profits only by paying salaries, so that the holders of the other shares have no share in its earnings while those in control draw an income from it (see Ting Shwu Ping v Scanone Pte Ltd [2017] 1 SLR 95 (“Ting Shwu Ping”) at [101]). The unfairness there lay in that deprivation. Here it lies in that deprivation and also in the purpose of the withholding and in those on whom its consequences fell (see [80] and [82] above).

  99. The accounts were qualified and laid late because of the Directors’ conduct

  100. [90] The Directors’ conduct in relation to the defendant’s accounts is also unfair and unjust to the other members. The qualified accounts do not give members the assurance, which ss 201(2) and 201(5) of the Companies Act contemplate, that the accounts give a true and fair view of the defendant’s financial position. In each of the seven years from 2017 to 2023 the qualification went to the recoverability of more than $10m due on the Related Party Loans (see [25] and [20] above). As the claimant submits, the Auditors could not assess that recoverability for want of supporting evidence from the Directors. The Directors could have supplied that evidence by fixing terms for repayment. That would then show when and how much the defendant is to recover. The Directors could also have produced to the Auditors evidence of the Borrowers’ ability to repay. Or they could have removed the question altogether by actually recovering the loans. They have done none of these (see [28] and [35] above).

  101. [91] The Auditors’ qualifications were neither automatic nor routine. I do not accept CSP’s evidence that the qualifications are immaterial because auditors automatically qualify accounts for debts outstanding for more than three years as a routine accounting disclosure. The Auditors qualified their opinion for want of evidence of the timing and amount of recovery, not because of the age of the debts (see [25] above). A debt is outstanding for three years only because it has not been recovered. And in the 2023 accounts the Directors’ position was that no impairment allowance was required because the amounts would be recovered. But the Auditors were given no evidence to support that position.

  102. [92] The accounts for 2019, 2020 and 2021 were laid at AGMs held between 17 and 19 months after the end of the year to which each set of accounts related. Those AGMs were held in August 2021, June 2022 and June 2023. CSP’s evidence is that the pandemic delayed the accounts because the accounting and audit staff could not work from home. I do not accept that the pandemic was the cause of the delay. As the claimant points out, the defendant’s accounts were late before the pandemic as well as after it. On his evidence, the financial statements for 2016 and 2017 are dated November 2018 and October 2019, each nearly two years after the end of the relevant year.

  103. [93] There is no evidence that the audited accounts for 2024 had been prepared even by May 2026. In December 2025, the SJE asked the defendant for its audited accounts for 2024. The defendant’s response in January 2026 was that it was working on its management accounts for 2024. By the time the SJE reported in February 2026, he still had not been given the defendant’s audited 2024 accounts. If the defendant was still working on its management accounts for 2024 in January 2026, its audited accounts for 2024 cannot have been ready by then to be laid before the members or to be filed. The claimant submits, without contradiction, that the audited 2024 accounts have not been filed. I therefore draw the inference that the defendant had failed to file its audited 2024 accounts even by May 2026.

  104. [94] These lapses are not mere matters of compliance or management practice, contrary to the defendant’s submission. Nor is the legal effect of these lapses on the unfairness ground rendered immaterial by the statutory penalties that they attract. What remains material is their scale and extent (see Phua Kiah Mai ([33] supra) at [67]). It is true that the lapses in EQ Capital ([65] supra) were more complete, with no audited accounts after 2010 and no AGM after 2012 (see EQ Capital at [26]–[27]). But the lapses here have persisted for seven years on the very matter of the Related Party Loans.

  105. The Directors kept the claimant from questioning them at general meetings

  106. [95] The Directors denied the claimant the means of questioning them about the lending, most plainly by refusing him every means of attending the 2024 AGM. The claimant lives in the United States. He had major surgery in 2024 and was advised not to travel. In May 2024, a week before the defendant’s AGM, he asked to attend it remotely. Two days later his solicitors repeated the request and put forward his then solicitor Ms Soh (see [32] above) as his proxy. Ms Soh is not a member of the defendant.

  107. [96] The defendant’s solicitors replied that the defendant was not obliged to hold its AGM remotely and that Art 68 of the Articles requires a proxy to be a member. On the eve of the meeting the Directors told the claimant that the defendant was not ready for a virtual AGM and that, on legal advice, a proxy should be a member. The Directors thereby precluded a member who was medically unable to attend an AGM in person from attending either by proxy or remotely. Fairness quite obviously does not require those in control of a company to give way to the minority. But fairness does at least call for a proper procedure to be followed, and for the minority to have the opportunity to try to persuade (see Phua Kiah Mai at [88]). The Directors denied the claimant even that opportunity.

  108. [97] The Directors’ refusal of the proxy rested on a position of law that the Directors had taken since 2012. That position is contrary to both s 181(1) of the Companies Act and the Articles. The notices of the defendant’s general meetings of 2012 and 2020, and its form of proxy for 2023, state without qualification that a proxy must be a member. At the AGM of 2023 the chairman held the claimant’s proxy invalid on that ground. But s 181(1) expressly entitles a member to appoint another person, “whether a member or not”, as his proxy. And Art 68 expressly permits a proxy who is not a member if he is “a person approved in writing by the Directors”. The Directors’ only reason for refusing Ms Soh as the claimant’s proxy, however, was that she was not a member, not that they declined to exercise Art 68’s power of approval (see [96] above).

  109. [98] It matters not that the claimant could have appointed a member as his proxy. The Directors suggested that he do so, saying that they found it “hard to believe that no member would be willing to assist you if you approach them in a friendly manner”. But the claimant had told the Directors three days earlier that no member was willing and able to represent him according to his instructions. And s 181(1) of the Companies Act arguably entitled him to choose a proxy who was not a member, notwithstanding Art 68 (see [97] above).

  110. [99] The minute of CRPL’s 2024 AGM shows how the Directors meet members’ scrutiny of the lending that they direct. At that meeting (see [28] above), a member asked about the impairment allowance on CRPL’s own loans to related parties, chiefly TBPL. The minute records that CSP, as chairman, said that “the directors do not record an impairment in the Company’s accounts to avoid shareholders’ challenges”. It is true that the “Company” there is CRPL, not the defendant. So this is not evidence about the defendant’s accounts or its dividends. But it does show that the Directors, albeit as CRPL’s directors, account for loans between family companies so as to avoid challenges by members.

  111. [100] The Directors’ refusals were refusals to be questioned and therefore to provide answers. I do not accept the defendant’s submission that the claimant has had opportunities to raise queries at general meetings and that his dissatisfaction is only with the Directors’ answers and therefore does not amount to unfairness. CSP’s evidence is that the Directors answered all questions at AGMs about the loans between the family companies. But the claimant’s evidence is that, at CRPL’s AGM of June 2023, CSP refused to tell him the size and terms of the defendant’s loan to CRPL. The company’s recorded response was that the chairman would not release the term sheet of the loans between the defendant and CRPL. And at the defendant’s 2024 AGM the Directors left the claimant no means of asking questions at all (see [95] above). Each refusal denied him the opportunity to try to persuade (see [96] above).

  112. The conduct taken together falls short of commercial morality

  113. [101] Taken together with the lending, the Directors’ conduct of the dividends, of the accounts and of the meetings falls short of the commercial morality that the second limb is designed to protect. Directors may be found to have acted unfairly or unjustly if their conduct falls short of the commercial morality or integrity which the law ought to uphold, judged in all the circumstances (see Phua Kiah Mai at [51] and EQ Capital ([65] supra) at [21] and see also Kho Choon Keng ([43] supra) at [35]). The claimant must establish that on the balance of probabilities (see [62] above). As the claimant submits, the conduct here forms a cumulative pattern.

  114. [102] The Related Party Loans run through each of the other matters. The withheld earnings are held, in economic substance, in the Related Party Loans (see [80] above). They are why the Auditors qualified the accounts (see [25] above). And they are the lending about which the Directors have avoided members’ questions (see [99] and [95] above). Each matter therefore adds to the unfairness of the others.

  115. [103] The CRPL balance is unfair to the other members whatever its place under the first limb (see [44] above). CRPL owed the defendant about $1.96m at the end of 2024, on the same terms as the other Related Party Loans (see [23] and [28] above). The defendant has also taken over CRPL’s expenses (see [48] above). The other members bear their share of the CRPL balance and of CRPL’s expenses, with no return at all to the defendant, regardless of the Directors’ own stake in CRPL.

  116. [104] My finding on the second limb rests on these matters judged by the second limb’s own test. As the claimant submits, the second limb asks whether the conduct is unfair or unjust to the other members, not whose interests it served. It requires no wrongdoing or illegality (see [43] above).

  117. [105] The claimant is among the other members treated unfairly, despite his holdings in TBPL and CRPL. It matters not that, on CSP’s evidence, the claimant has benefited from TBPL’s growth. That holding does not make good what the claimant bears as a member of the defendant (see [41] above). His holding in CRPL is no larger than each Director’s (see [45] above). And the consequences of the withheld dividends and the refused proxy fell on him whatever he holds elsewhere. The “other members” within the meaning of the unfairness ground include, at least, a member who is not a Director and on whom the conduct bears. The court in Phua Kiah Mai applied the second limb to the plaintiff and his faction as “the other members” without defining the phrase (at [55] and [70]).

  118. [106] My finding on the second limb of the unfairness ground rests on no other complaint the claimant raised. The claimant also complains of: (a) CSP’s 25% of BTVP (see [52] above); (b) the defendant’s purchase in 2012 of 275 of its own shares from the Founder’s estate; (c) the write-off of $14,000 due from a company wholly owned by CSP; and (d) the Directors’ other benefits. I need not come to a conclusion on any of these complaints.

  119. Neither acquiescence nor the other members’ silence answers the claim

  120. [107] The claimant’s long acquiescence in the dividend policy does not answer the second limb. I do not accept the defendant’s submission that, by raising no objection for 20 years and by subscribing for shares, the claimant accepted the policy. Defendant’s counsel did not suggest reliance on any sort of waiver or estoppel. It is true that a court will be slow to find a dividend policy unfair where the minority stayed silent for a decade instead of using its power to change it (see Lim Kok Wah ([84] supra) at [148]). But the claimant has no such power (see [35] above). Nor has he been silent. He has raised the Related Party Loans in written questions at the defendant’s AGMs since August 2021.

  121. [108] It matters not that, as the defendant submits, no member other than the claimant has complained. The second limb asks whether the conduct appears unfair or unjust to the “other members”, not whether they complain of it. In any event, the claimant’s sister, Ms Chuang Min Hwei, is a member who is not a Director. She also queried the Related Party Loans at the AGM of August 2021.

  122. [109] The claimant has therefore established the second limb of the unfairness ground. I now turn to the provisions of the Companies Act on which the claimant also relies.

  123. Apparent breaches of the Companies Act

  124. [110] The Related Party Loans appear to have been made in breach of s 163 of the Companies Act and the Directors appear to be in breach of s 157(1) of the same Act (see [112] and [114] below). The defendant does not appear to have breached s 169(1) in paying the salaries (see [115] below). These apparent breaches reinforce the conclusions I have already reached under the unfairness ground (see [43] above).

  125. [111] I describe the breaches as apparent because these proceedings are not the occasion to determine whether there have been actual breaches. The Directors are not parties to this application. I cannot and do not determine any question of their personal liability (see [1] above). And I determine the consequences of any breach for the defendant only so far as s 125 of the Act is concerned.

  126. [112] The Related Party Loans appear to have been made without the approval in general meeting that s 163 of the Companies Act requires of a company that is not an exempt private company. Section 163(1) forbids such a company to lend to another company in whose voting power its directors together are interested to 20% or more, without the prior approval of the lending company in general meeting. Even then, the interested directors and their family members must abstain from voting.

  127. [113] The Directors hold 80% of TBPL and about 27% of CRPL (see [37] and [45] above). They did not seek approval for the Related Party Loans from the disinterested members (see [68] above). Subject to an exception that is not relevant, an exempt private company is a private company in the shares of which no beneficial interest is held directly or indirectly by any corporation, and which has not more than 20 members (s 4(1) of the Companies Act). The defendant asserts that it is an exempt private company. It bears the burden of proving that fact, both because it asserts it and because the facts that establish it are especially within its knowledge (ss 105 and 108 of the Evidence Act 1893 (2020 Rev Ed)). The defendant has not discharged that burden. CSP’s bare assertion is the only evidence that the defendant is an exempt private company. The defendant’s business profile with the Accounting and Corporate Regulatory Authority describes it simply as a “private company limited by shares”, not as an “exempt private company limited by shares”.

  128. [114] The Directors appear not to have used reasonable diligence in maintaining the Related Party Loans, in apparent breach of s 157(1) of the Companies Act. Section 157(1) requires a director at all times to act honestly and to use reasonable diligence in discharging his duties. Maintaining the Related Party Loans on no terms, without any attempt to recover them and without accounting to the members for them, appears to fall short of reasonable diligence (see [28], [35] and [99] above). I make no finding on the honesty limb of s 157(1).

  129. [115] The salaries do not, on the evidence before me, appear to be emoluments in respect of the office of director as such. Section 169(1) of the Companies Act requires a resolution, not related to other matters, before a company provides such emoluments for a director. But CSP and CSB appear to have been paid their salaries as employees, not as directors, for their service to the defendant (see [89] above). It appears to me, therefore, that the defendant did not breach s 169(1) by paying salaries to CSP and CSB without the members’ approval.

  130. [116] I now turn to the equitable ground.

  131. It is just and equitable to wind the defendant up

  132. [117] It is just and equitable to wind the defendant up for two reasons: (a) the Directors’ lack of probity justifies the claimant’s loss of confidence in the management of a family company; and (b) the claimant has no viable means of withdrawing his capital at fair value.

  133. [118] I take each reason in turn.

  134. The Directors’ lack of probity justifies the claimant’s loss of confidence

  135. [119] The conduct that I have found under the unfairness ground discloses a lack of probity that justifies the claimant’s loss of confidence in the management of the defendant. The claimant founds his case on the equitable ground on that loss of confidence. He traces it to the Directors’ handling of the Related Party Loans, their lack of transparency and the absence of dividends over many years. Claimant’s counsel accepts that his case on the equitable ground rests on the same conduct as his case on the unfairness ground.

  136. [120] I have described that conduct (see [75] above). The claimant relies on the decision of the Privy Council in Loch v John Blackwood Ltd [1924] AC 783 (“Loch”). The Court of Appeal has accepted that Loch is the starting point of the inquiry on this strand of the equitable ground (see Foo Peow Yong Douglas v ERC Prime II Pte Ltd [2018] 2 SLR 1337 (“Foo Peow Yong”) at [48]).

  137. The defendant is a family company in which mutual trust is paramount

  138. [121] The defendant is a family company of the kind described in Chow Kwok Chuen v Chow Kwok Chi [2008] 4 SLR(R) 362 (“Chow Kwok Chuen”). In a family company of that kind, the shares are closely held and not easily transferable to outside parties (at [34]). Its directors hold their positions through ties of blood rather than for their business acumen or for commercial reasons (at [34]).

  139. [122] The defendant bears both features of a family company. Its directors are three of the Founder’s sons (see [1] above). Further, the shares of the defendant are closely held. Its Articles require a member to offer his shares first to his fellow members and let the Directors refuse to register a transfer to a non-member (see [146] and [147] below). The defendant’s members have at all material times been members of the Chuang family. The Founder’s statutory declaration asserts that he had built up the defendant’s portfolio “for my family, my children and my children’s children”. It is the defendant’s own case that the Founder’s “overarching vision” was to build and preserve a portfolio of real estate assets “for the long-term benefit of the Chuang family”. The family interest is fundamental to the defendant’s purpose.

  140. [123] The result is that the Directors’ conduct is judged by the test of trust that a family company demands. That test applies regardless of who endowed the directors with their office (see [125] below). And a member who takes no part in management may rely on the equitable ground where he has lost confidence in those who manage the company. The petitioners in Loch held a minority of the shares and had no place on the board (see Loch at 786). The applicant in Foo Peow Yong was a minority member who had lost confidence in the directors’ management of the company (see Foo Peow Yong at [47] and [51]).

  141. [124] Mutual trust and confidence therefore matter more in the defendant than in a purely commercial company (see Chow Kwok Chuen at [33]). A quasi-partnership has a special position when considering the equitable ground because its members associate on an understanding of mutual trust and confidence on which equity will not allow one of them to renege (see Chow Kwok Chuen at [31]). Not every family company is analogous to a quasi-partnership (at [33]). But where the family interest is fundamental to the purpose of the company, “the inextricability of the family relations from the business relations amongst the directors may provide justification for equitable winding up of the company because in such a set-up mutual trust and confidence are paramount” (at [33]).

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