Guide Minority Oppression in Malaysia
In the corporate world, decisions are generally made according to the will of the majority. But what happens when that majority misuses its power to the detriment of minority shareholders?
In Malaysia, the law provides a safeguard. Section 346 of the Companies Act 2016 allows minority shareholders to seek court intervention if the company’s affairs are being conducted in a manner that is oppressive, unfairly discriminatory, or prejudicial to their interests.
Oppression isn’t limited to illegal acts. Even actions that are technically lawful may be deemed oppressive if they violate principles of fair dealing or go against the legitimate expectations of minority shareholders—especially in private or family-owned companies, where power imbalances are often more pronounced.
What Does Oppression. Look Like ?
Some common examples include:
• Dilution of minority shareholdings;
• Exclusion from key management decisions;
• Withholding of dividends;
• Misuse or diversion of company assets.
To succeed in a claim, the minority shareholder must show that they have suffered unfair treatment and that court intervention is warranted.
What Can the Court Do ?
The courts in Malaysia have wide discretion.
Depending on the case, they may:
• Order a buy-out of the minority’s shares;
• Direct changes in the company’s operations or governance;
• Or, in rare cases, order the company to be wound up.
At its core, this area of law balances the principle of majority rule with the need for corporate fairness and accountability. It ensures that no shareholder, regardless of their stake, is left voiceless or vulnerable.
At Low and Partners, we assist minority shareholders in navigating their rights and exploring solutions—whether through negotiation or litigation. If you suspect unfair treatment in your company, our team is here to help.
If you have any questions or require any additional information or clarification, please contact our lawyer that you usually deal with.