Can a minority shareholder stop the majority from selling the company's properties?

A minority shareholder who is outvoted may still question a proposed sale. The key question is whether shareholders had enough information to assess the transaction.

In Queck Han Tiong v Kujaya Dormitories Sdn Bhd & Ors [2026] MLRHU 3025, the High Court in Melaka granted a short interim injunction concerning proposed sales of two company properties for at least RM101 million. The decision was delivered on 3 September 2026.

What happened?

A minority shareholder holding 20% of the company questioned the proposed disposals. He wanted information about the prices, prospective buyers, financial consequences and the company’s future after the sale.

The company told him that the extraordinary general meeting was the appropriate place to raise those questions. At the meeting, however, the chairman declined to answer most of them, saying that he was attending as a shareholder rather than as a director.

The resolutions passed with 80% support. The minority shareholder then sought court protection before the transactions proceeded.

What did the Court decide?

The Court found a serious issue over whether the resolutions were valid without adequate disclosure. That issue required further consideration. It temporarily restrained implementation of the resolutions and disposal of the properties. Ordinary management and existing tenancy arrangements could continue.

The concern was that a completed sale could create third-party rights and make it difficult to restore the shareholders’ opportunity to consider the transaction.

This was an interim decision made before the defendants were heard. The Court did not finally invalidate the resolutions, decide the directors’ personal liability or give the minority shareholder a permanent veto. The order was limited in duration, with a further hearing required.

What should a minority shareholder or director take note of?

For shareholders, put specific questions in writing before the meeting. Ask how the price was determined, who the buyer is, whether any connections with directors or shareholders exist, and how the sale proceeds will be used. Keep the replies and obtain the meeting minutes. These records help identify whether a concern is about missing information, the commercial merits of the sale, or both.

For directors, prepare an explanation that shareholders can use to assess the proposal. Audited accounts alone may not explain the current value of a property, the proposed buyer or what remains of the business after the sale. If questions will be addressed at the meeting, ensure someone is prepared and authorised to answer them.

A shareholder’s disagreement does not automatically prevent a sale. Equally, a large majority does not remove every question about how approval was obtained. Where a transaction may be completed before a dispute can be heard, seek advice promptly about whether temporary court protection is justified.

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