Thio Shen Yi, SC comments in The Edge: “Tough for minority investors to sue errant companies”

In a story on minority shareholder rights published in the 8-14 October 2018 edition of The Edge Singapore, Thio Shen Yi, SC, addressed the challenges faced by shareholders taking legal action against companies in the absence of class action framework. He said: “It’s a very convoluted process. You need to go to court to ask permission to start a case. This is due to the the ‘proper plaintiff’ rule. The only party who can sue a director or the board for a breach of fiduciary duties is the company, not the shareholders. The company’s board can just say no, we’re not going to agree to sue ourselves. The shareholder can apply to the Court for permission to compel the company to start a lawsuit against the director or the board. They have to do this because as minority shareholders, they don’t control the company. However, even if the court allows the minority to go after the board, there is still the issue of who finances the litigation.”

The story can be found here (paywalled): https://www.theedgesingapore.com/print-edition/minority-rights

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