Mustafa Centre boss being sued by sons of dad's partner
The late Mr Samsuddin Ahmad's sons are seeking a High Court order to void the alleged share dilution of the business over the years that has shrunk the Samsuddin estate's portion from 50 per cent to 15 per cent.
The man behind the iconic Mustafa Centre, Mr Mustaq Ahmad, who is currently battling his half-siblings in a high-stakes lawsuit, is facing another legal fight - from one half of the famed brand name Mohamed Mustafa & Samsuddin.
The late Mr Samsuddin Ahmad's sons Fayyaz and Ansar are seeking a High Court order to void the alleged share dilution of the business over the years that has shrunk the Samsuddin estate's portion from 50 per cent to 15 per cent.
They are also seeking a court-appointed expert to examine the company's accounts and compel Mr Mustaq to buy out the share of the Samsuddin estate.
Mr Mustaq is denying the claims, saying the company is made up largely of a business he started in the late 1960s and grew in a shop in 1971, but was later supervised by the company started by his father Mustafa and Mr Samsuddin.
The two older men had established a partnership, Mohamed Mustafa & Samsuddin Company, in July 1973 which ran the business in Serangoon Road.
Mr Mustaq argued, according to court documents, that his father and Mr Samsuddin operated the partnership at all material times but on the understanding that the business they were running at the Serangoon Road premises belonged to Mr Mustaq.
In 1989, a new company was formed and it absorbed the partnership Mohamed Mustafa & Samsuddin Company.
Called Mohamed Mustafa & Samsuddin Company Pte Ltd (MMSCPL), the new venture was set up to operate a department store and supermarket as well as pursue general wholesale trade.
Over the years, Mr Mustaq and his wife Ishret Jahan became the majority shareholders, while both the Mustafa estate and the Samsuddin estate were registered as minority shareholders of MMSCPL after the two older men died.
Mr Mustafa died in 2001 and Mr Samsuddin in 2011.
The plaintiffs Fayyaz and Ansarallege that Mr Mustaq and his wife, as majority shareholders of MMSCPL, conducted the company's affairs in a manner that is oppressive and unfairly prejudicial to the Samsuddin estate and disregarded their interests as minority shareholders.
These include alleged share dilutions from 1991 to 1995, and in 2001, which reduced their share to 15.21 per cent.
Among other things, the Samsuddin brothers allege payment of excessive directors' fees and that unsecured interest-free loans were used to benefit the defendants.
But the defendants argued, among other things, that the two brothers have no locus standi, or standing, to sue as they are not shareholders of MMSCPL.
There are six defendants. They include Mr Mustaq and his wife, both of whom are defended by WongPartnership lawyers led by Senior Counsel Alvin Yeo. There are also the couple's two children, who are directors of the company, and Mr Mustaq's brother-in-law. They are defended by Rajah & Tann lawyers led by Senior Counsel Lee Eng Beng. MMSCPL, named a nominal defendant, is denying the claims through its lawyer Lim Tat from Aequitas Law.
The Samsuddin brothers are represented by lawyers from Selvam led by Mr Sarbjit Singh Chopra.
Separately, Mr Mustaq's step-siblings and their mother are taking him to court to seek an account of the affairs and records of MMSCPL.
Based on the company's assets reportedly valued at $495.89 million in 2013, the Mustafa estate's share of 14.89 per cent would potentially be valued at about $74 million, which would be around what the Samsuddin estate's share of 15 per cent would be worth too.
Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.