Minority shareholder oppression claims under section 216 of the Companies Act 1967 are one of the most powerful remedies available to a shareholder who feels sidelined, shut out of information, or squeezed out of value by the people running “their” company. But there is a threshold question that trips up more claimants than most business owners realise: do you actually have to still be a shareholder to bring the claim at all?

The General Division of the High Court addressed this squarely in Leow Hock Soon and another v Chew Eik Khoon and others [2026] SGHC 117, a dispute between four long-time business partners who had jointly run a construction company for close to two decades. The claimant, Leow Hock Soon, had sold and transferred all his shares back in 2021, well before he commenced his lawsuit. When he later sued his former co-founders for oppression, the first battle was not about whether the company’s affairs had been run unfairly. It was about whether he was even allowed to ask the question.

This article looks at what the case says about who has standing to bring a section 216 claim, why the “exception” to the general member-only rule is much narrower than some shareholders assume, and what this means for anyone thinking about walking away from a company while a dispute is brewing.

The Case in Brief

Chartworth Enterprise Singapore Pte Ltd was originally incorporated in 1983 and later became dormant. In 2003, four individuals, including Mr Leow, took over its management, each contributing equally to the company’s capital and each holding 25% of its shares. They ran the business together for close to two decades, with two of them handling finance and management and Mr Leow and a fellow founder overseeing site operations and projects.

Mr Leow ceased to be a shareholder on 31 May 2021, after transferring all his shares to the two remaining founders. He subsequently commenced proceedings against them, claiming fraudulent misrepresentation, breach of trust, and minority oppression under section 216 of the Companies Act. The High Court found in his favour on the breach of trust claim, but dismissed both the misrepresentation claim and, critically for this article, the oppression claim.

Why the Oppression Claim Failed at the Starting Line

The court did not need to examine whether the company’s affairs had actually been conducted unfairly. It never got that far. The oppression claim failed at a more basic, procedural hurdle: by the time Mr Leow sued, he was no longer a registered shareholder of the company, and the court held he had not brought himself within the narrow exception that would have allowed a non-member to sue anyway.

The General Rule: Only Registered Members May Sue

Section 216 of the Companies Act 1967 gives the court power to grant relief where a company’s affairs are being conducted, or the powers of its directors are being exercised, in a manner oppressive to, or in disregard of the interests of, one or more of its members. The starting point, as the High Court reaffirmed, is that only a person who is a registered member of the company at the time the claim is brought has standing to invoke this remedy. This principle traces back to the Court of Appeal’s decision in Kitnasamy s/o Marudapan v Nagatheran s/o Manogar [2000] 1 SLR(R) 542, which the court in Leow v Chew treated as the anchor authority on this point.

In practical terms, this means the timing of a share transfer, resignation, or buyout can be decisive. A shareholder who sells out, is bought out, or is removed from the register of members generally loses the right to complain about how the company was run, even if the underlying grievances arose while they were still on the register. Once you are off the register, the general rule is that the section 216 door closes behind you.

Why This Matters Beyond the Courtroom

For business owners in the middle of a falling-out with co-founders or fellow shareholders, this is not an abstract legal technicality. Many disputes are resolved, or at least paused, by one side selling their shares and walking away. What Leow v Chew shows is that agreeing to sell your shares while a grievance is unresolved can permanently extinguish your ability to pursue an oppression claim over that same conduct, unless a narrow exception applies.

The Narrow Exception: When the Company Cannot Be Used as an “Engine of Fraud”

The general member-only rule is not absolute. Singapore courts have long recognised a narrow exception where it would be unjust or inequitable for a defendant to rely on a claimant’s lack of registered membership to defeat an oppression claim. This exception traces back to the Malaysian decision in Owen Sim Liang Khui v Piasau Jaya Sdn Bhd [1996] 1 MLJ 113, which the Singapore Court of Appeal approved in Kitnasamy, and was more recently clarified by the High Court in Marten, Joseph Matthew v AIQ Pte Ltd [2023] SGHC 361.

The key requirement, as the High Court explained in Leow v Chew, is that there must be an element of unconscionability in the defendant’s conduct, and that unconscionable conduct must be the actual reason the claimant lost their registered status in the first place. Where a defendant’s wrongdoing is what caused the claimant’s name to be omitted from, or removed from, the register of members, it would be inequitable to let that same defendant then hide behind the register to defeat the claim. The company, in other words, cannot be used as an “engine of fraud.”

The Lim Seng Wah Formulation, and Why the Court Narrowed It

Mr Leow relied on an earlier High Court decision, Lim Seng Wah v Han Meng Siew [2016] SGHC 177, which had described the exception in broader terms: that it could apply wherever “the events which caused the plaintiff to cease to be a shareholder are also the subject matter of the complaint” under section 216. On that broader reading, a shareholder who transferred away their shares partly because of a dispute with the other shareholders might still be able to sue afterwards.

The High Court in Leow v Chew took a more careful look at that formulation and found its legal basis “not entirely clear.” Instead, the court preferred and adopted the analysis in Marten, Joseph Matthew, which confines the exception strictly to cases where the defendant’s own unconscionable or wrongful conduct caused the claimant’s loss of membership. A voluntary decision to sell shares, even one made in the context of a souring relationship or amid allegations that have not been proven, will not on its own satisfy this test.

Applying that narrower standard, the court found that Mr Leow’s transfer of his shares in 2021 had been voluntary, and was not shown to have been caused by any unconscionable or wrongful conduct on the part of his former co-founders. As a result, he could not bring himself within the exception, and his oppression claim failed on standing alone, regardless of whatever else might have been going on inside the company.

Practical Takeaways for Directors and Shareholders

1. Think Before You Sign a Share Transfer Mid-Dispute

If you are a minority shareholder with an active grievance about how the company is being run, transferring away your shares, even as part of a broader settlement or exit negotiation, is very likely to end your ability to bring or continue a section 216 claim later. Get advice on preserving your position before, not after, you sign a share transfer form.

2. The “Exception” Is Narrower Than It Sounds

Do not assume that having a grievance which is factually connected to your departure is enough. The claimant must show that the other side’s unconscionable or wrongful conduct actually caused the loss of membership, not merely that the two events happened around the same time or arose from the same underlying falling-out.

3. Keep the Register of Members Accurate and Contemporaneous

Because standing turns so heavily on registered status, an accurate, up-to-date register of members matters more than many companies realise. If you believe your name was removed from the register improperly or without your consent, a separate application to rectify the register may need to run alongside, or even ahead of, any oppression claim. Our earlier article on rectifying the register of members under section 194 covers that process in more detail, as does our piece on how directors’ discretion to refuse a share transfer can affect who ends up on the register in the first place.

4. Consider Alternative Remedies

Where standing for an oppression claim is doubtful, it is worth exploring whether other remedies remain open. A former shareholder may still be able to pursue a separate claim for breach of trust or misrepresentation, as Mr Leow did with partial success. In other situations, a majority shareholder or one facing an unworkable relationship may prefer to pursue a just and equitable winding up instead, a route we discussed in our article on winding up after Re Interior Times. Shareholders who have already obtained a buy-out order should also be aware of the practical recovery issues covered in our piece on shareholder loan recovery after a buy-out order.

5. Understand How This Differs from the Grounds for Oppression

Standing is a threshold issue that is entirely separate from whether oppressive conduct actually occurred. For a discussion of what kinds of conduct Singapore courts have treated as oppressive once standing is established, see our earlier article on minority shareholder oppression lessons from the Cleanmage buyout case.

When to Seek Advice

Oppression disputes tend to move quickly once a relationship between co-founders or shareholders breaks down, and decisions taken in the heat of the moment, particularly around selling or transferring shares, can have permanent legal consequences. Shareholders are also often weighing up the personal financial stakes of staying in or exiting a company, and it is worth pausing to make sound financial and investment decisions before agreeing to any exit terms. Where litigation looks likely, business owners should also seek legal advice on bringing an oppression claim as early as possible, ideally before any shares change hands, rather than after standing has already been lost.

Conclusion

Leow Hock Soon v Chew Eik Khoon is a useful reminder that Singapore’s oppression regime under section 216 is not a remedy of last resort available to anyone who once had a stake in a company. It is, first and foremost, a members’ remedy, reserved for those who remain on the register when the claim is brought, subject only to a narrow, fact-sensitive exception for claimants whose loss of membership was itself procured by the defendant’s unconscionable conduct. For directors and shareholders navigating a breakdown in a business relationship, the lesson is to get the sequencing right: address standing and preserve your position before signing away your shares, not after.

If your company is dealing with a shareholder dispute, questions over the register of members, or a potential oppression claim, proper corporate secretarial records and timely advice make a real difference to the options available to you. Raffles Corporate Services supports Singapore companies with accurate statutory registers, share transfer documentation, and corporate governance support that can help avoid these disputes turning into costly litigation.

To speak with the team at Raffles Corporate Services, you can email [email protected] or call, SMS, or WhatsApp +65 8501 7133. We are happy to assist with any queries.

The Editorial Team, Raffles Corporate Services