KUALA LUMPUR (July 27): A dispute has erupted among controlling shareholders of Northeast Group Bhd (KL:NE), dragging along the precision engineering company to the court.
Chong Ewe Hean and Ng Meng Hang, shareholders of Mountain Range Sdn Bhd, have filed to start legal proceedings claiming minority oppression by Northeast managing director Ng Chay Chin, an exchange filing showed. Mountain Range controls about 54% of Northeast.
Northeast is named as the nominal third defendant in the two originating summonses with no relief sought against it.
“The board has sought legal advice and will take the appropriate steps to protect its interests, while maintaining a neutral position in this dispute between the shareholders of the company,” Northeast said.
The move follows Chong’s ouster at Northeast's annual general meeting in February, when a group of shareholders decided against Chong’s re-election as executive director. Following the rejection, Chong retired from the firm now valued at RM685 million which he co-founded with Chay Chin and Meng Hang.
Chong has a direct 3.5% stake and indirect 54% stake in Northeast through Mountain Range, a vehicle he jointly controls with Chay Chin and other shareholders. He is also the second-largest shareholder of Mountain Range with a 26.7% stake, according to its listing prospectus in 2024.
Meng Hang, meanwhile, ceased to be a substantial shareholder of Northeast post-listing, though he remained as technical adviser.
The original summonses are seeking a declaration that the affairs of Mountain Range and Northeast have been conducted by Chay Chin oppressively and an order that Chay Chin purchase all shares of Chong and Meng Hang in Mountain Range at a fair value to be determined by an independent valuer.
The two co-founders are also seeking an order that Chay Chin and Mountain Range provide full access to the books, records accounts and other documents necessary for the purpose of the valuation as well as costs against the Chay Chin and Mountain Range.
Both Chay Chin and Meng Hang are unrelated.