This article first appeared in The Edge Malaysia Weekly on April 21, 2025 - April 27, 2025

THE feud between siblings Tan Sri Shahril Shamsuddin and Datuk Shahriman Shamsuddin of the Sapura group of companies is likely to generate considerable interest, with Shahriman’s petition to wind up Sapura Holdings Sdn Bhd slated to be heard in court on April 22.

First on the stand on Tuesday will be the father of the quarrelling brothers, Tan Sri Shamsuddin Abdul Kadir, who seems to be supporting the younger sibling Shahriman in the ongoing feud. Shamsuddin is founder of the Sapura group of companies, which is named after his late wife, Siti Sapura Husin.

On Sept 23 last year, Shahriman filed a petition with the High Court to wind up Sapura Holdings, the family’s investment vehicle. Shahril is opposed to doing so, however, insisting that it is not a family company. In his affidavit, he said the presence of Datuk Rameli Musa of Ingress Bhd fame as a 4% shareholder in Sapura Holdings refutes the view that it is a family company.

In an interview with The Edge, Shamsuddin, who is now 94, says: “I mentioned to them [Shahril and Shahriman], this company I leave to both of you. Run it together ... [It’s a] family company, of course.

“In the early days, after we built up the company, I sought [Rameli] to help me build the company. So, I thought I’d just give him 10% … At that time, he refused because he said [Sapura Holdings] is a family company. But later, he accepted it. He later sold 6% of the 10%.”

For context, when Shahriman filed a petition to wind up Sapura Holdings last September, he said it was “just and equitable to do so” because “there has been a complete breakdown in the relationship of mutual trust and confidence” between him and Shahril. He added that they “no longer trust each other, and they agree that they can no longer work together” and “are not even on talking terms”.

In a nutshell, the concept of a family company requires that there be mutual trust and confidence among the shareholders or that personal relationships take precedence over formal agreements.

Since there has been a breakdown in the relationship between the brothers, Shahriman is mooting to have Sapura Holdings wound up, but Shahril believes that since it is not a family company, it should not be wound up. Rameli is said to share Shahril’s views, leaving Shahriman at a disadvantage.

To put things in perspective, the two brothers are equal shareholders in Sapura Holdings, with a 40.5% stake each, while their equally owned vehicle Brothers Capital Sdn Bhd has a 15% stake. This means Rameli’s 4% in the privately held company tips things in Shahril’s favour.

Shamsuddin says, “I told them, last time when I knew this was going to happen, I called both of them. I said, I want you both to work together and settle whatever. But then I saw Shahril was not listening to that. So, I told him, since you cannot work together, you break it up and move on … One can buy out the other and go [their separate ways].”

In his affidavits, some of Shamsuddin’s allegations against Shahril are damning, with claims of the father being cheated and his assets being taken by the two brothers as theirs under their vehicle Brothers Capital. However, sources close to Shahril say there was a settlement between the father and the brothers, who were at loggerheads in 2013, under which Shamsuddin was compensated for his assets that were transferred to Brothers Capital. As there is a non-disclosure agreement in place, details were hard to come by.

Apparently, part of the settlement involves Shamsuddin’s almost 47% equity interest in Sapura Industrial Bhd (KL:SAPIND) which he jointly holds with his wife Puan Sri Mariam Parineh.

There is also a view that Shahril played a key role in building Sapura Holdings, having been a director of the private company since 1990, but how much he could have achieved without the initial effort of and capital from Shamsuddin’s endeavours is a moot point.

Sapura Holdings has an 11.25% stake in oil and gas outfit Sapura Energy Bhd (KL:SAPNRG), 51.84% in commercial property owner Sapura Resources Bhd (KL:SAPRES) and 98% in Sapura Technology Sdn Bhd, among others.

Sapura Holdings chalked up a profit after tax (PAT) of RM69.85 million on the back of RM511.91 million in revenue for its financial year ended Jan 31, 2024. In FY2023, the company had a PAT of RM13.58 million from RM393.63 million in revenue. It paid out RM128.36 million in dividends that year.

In previous conversations with The Edge, Shahril said: “As the director of a 50-year-old company [Sapura Holdings] with close to 1,000 employees, my utmost duty is to protect them — the company and all its stakeholders. This includes its shareholders, partners, vendors and, most importantly, our customers — both private organisations as well as the government of Malaysia, which has entrusted us with projects concerning the nation’s security and sovereignty.”

Shahril and Shahriman’s dispute is said to be triggered by Project Apex, which involved the construction of Permata Sapura, a 52-storey skyscraper in Kuala Lumpur’s Golden Triangle, in the vicinity of the Petronas Twin Towers.

Shahriman felt that Sapura Resources would be financially stretched if it took on the project to build and operate the skyscraper and suggested that the building be sold instead. Shahril preferred, however, to undertake a cash call, which would entail shareholders injecting funds into Sapura Resources.

Sapura Resources had already received financial assistance of RM168 million from Sapura Holdings, and as a settlement had proposed the issue of 373.33 million preference shares at 45 sen each and a proposed rights issue to raise RM33.5 million.

Meanwhile, Permata Sapura was developed and constructed by a 50:50 joint venture between Sapura Resources and KLCC Holdings Sdn Bhd that was formalised in 2011. Sapura Resources acquired a 50% stake in the JV entity, Impian Bebas Sdn Bhd, from KLCC Holdings for RM108.5 million cash.

The total investment made by Sapura Resources and KLCC Holdings for the construction of Permata Sapura was a staggering RM1.26 billion. Part of the plan involved three related companies — Sapura Energy, SEB Upstream Sdn Bhd and Sapura Secured Technologies Sdn Bhd — coming in as tenants of Permata Sapura.

However, with the ailing Sapura Energy coming under the umbrella of Permodalan Nasional Bhd (PNB), which held a 40% stake in the oil and gas company after a RM4 billion cash call in 2018, plans to move into Permata Sapura were put on the backburner.

Sapura Resources, which had a 15-year master lease agreement commencing on Oct 1, 2021, for about 70% of Permata Sapura, was caught between a rock and a hard place, as rents had to be slashed to attract tenants.

In April 2023, KLCC Holdings proposed that Sapura Resources pay RM85 million if it sought to exit Project Apex. Shahriman was keen on the exit, but Shahril was opposed to it.

At end-January 2024, 82.6% of the occupants of Permata Sapura were renting below the base rate of the master lease agreement, which has been weighing on Sapura Resources’ financials.

In Sapura Resources’ latest annual report, Permata Sapura was listed as having a net book value of RM408.09 million as at Jan 31, 2024. In Sapura Resources’ circular to shareholders for the preference shares and rights issue exercise, Raine & Horne subscribed a market value of RM1.526 billion to Permata Sapura (as at April 30, 2024).

While Project Apex created tension between the brothers, governance issues cropped up at Sapura Resources, which added fuel to the fire and widened the rift between the brothers.

Minority shareholders of Sapura Resources took the company’s management to task last July, alleging that Shahriman, who was then managing director, had acted in a manner conflicting with the best interests of the company. Sapura Resources, other than its mainstay property arm, also has an aviation business, which involves private aviation services such as aircraft handling and aircraft management services out of Subang Airport.

In July 2023, Sapura Resources, weighed down by the adverse effects of the pandemic, sought to exit the aircraft maintenance, repair and overhaul business, and inked an agreement with Royal Jet LLC to dispose of its aviation arm. Explorer Group Sdn Bhd, in which Shahriman is a shareholder and executive director, and Royal Jet inked a memorandum of understanding, however, to collaborate on private flight operations out of Subang Airport.

Sapura Resources’ minority shareholders showed their displeasure at the annual general meeting and, on Sept 11, 2024, managing director Shahriman was forced to go on a leave of absence as an investigation into him had commenced, to avoid any potential conflict of interest.

On Oct 10 last year, Sapura Resources issued show-cause letters to Shahriman and re-designated Reza Abdul Rahim — formerly a chief financial officer at Sapura Energy — as executive director and acting managing director of Sapura Resources. In January this year, Reza was appointed CEO and executive director.

Shahriman, who had been managing director of the company since March 2007, resigned in late October last year.

Earlier this month, Sapura Resources initiated legal action against Shahriman, other employees of Sapura Resources, Syed Haroon Omar Alshatrie, Syed Muhammad Hasan Alsagoff and Explorer Group, alleging breaches of fiduciary, statutory and contractual duties, as well as a conspiracy to harm the companies in its stable, and was seeking RM3.2 million in deposits and other payments. Sapura Resources also sought claims for general, aggravated and equitable compensation for losses from missed business opportunities, estimated to be worth RM82.1 million.

Sapura Resources’ shares ended trading at 29.5 sen last Thursday, translating into a market capitalisation of RM76.5 million.

Plaintiff Shahriman is represented by Gopal Sreenevasan and Cheang & Ariff while defendant Shahril’s lawyers are with Shearn Delamore, and defendant Rameli’s legal representatives are with Ranjit Singh & Yeoh. 

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