In Adcrop Pte Ltd v Gokul Vegetarian Restaurant and Cafe Pte Ltd [2023] SGHC 152, the Singapore High Court considered and clarified a number of key issues relating to winding up applications, including the relevant factors that the Court will consider in deciding whether shareholders of the company being wound up have standing to oppose the winding up application, and the Court’s discretion to disallow a winding up application commenced as an abuse of process. The decision involved a winding up application that had been filed by a purported creditor against a company and was opposed by one of the company’s two shareholders.
The Court found that the opposing shareholder had standing to oppose the winding up application in her position as a shareholder (or contributory) of the company, even if the company was indisputably insolvent and there would be no returns to the shareholders after distribution to the creditors. The Court also found that the winding up application was commenced as part of a scheme to terminate the company and allow the other shareholder’s new company to take over the company’s business, and that the purported creditor’s application was motivated by the collateral and improper purpose of advancing the scheme, and therefore the winding up application should be dismissed.
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