Kiri Industries : General updates

Background

2 The DyStar group was a major player in the international dye industry and was based in Germany. It experienced financial difficulties in 2009 and insolvency administrators were appointed. Kiri wanted to acquire the DyStar

group's business but could not raise the funds to do so on its own. Kiri accordingly turned to Zhejiang Longsheng Group Co Ltd ("Longsheng") and invited it to enter into a joint venture for this purpose. The relevant agreements were executed by Kiri and Longsheng in 2010 and DyStar Global Holdings (Singapore) Pte Ltd ("DyStar") was incorporated as the vehicle that would be used to acquire the DyStar group's business. Kiri was the majority shareholder in DyStar while Longsheng (through its wholly-owned subsidiary Well Prospering Ltd ("WPL")) held one share in DyStar and a €22m zero-coupon bond issued by DyStar, which could be converted at any time into ordinary shares at S$10 per share.

1. In July 2012, the convertible bond was transferred from WPL to Senda, which was another wholly-owned subsidiary of Longsheng. Then, in December 2012, which was also around the time DyStar turned profitable, Senda converted all of the debt under the convertible bond into equity. As a consequence of these developments, Senda became the majority shareholder of DyStar while Kiri became a minority shareholder. Respectively, they held 62.43% and 37.57% of the issued capital.
2. The relationship between Kiri and Senda as joint venture partners deteriorated following the emergence of Senda as a majority shareholder in DyStar. On 26 June 2015, Kiri commenced a suit in the High Court against Senda alleging minority oppression. On 11 May 2017, the suit was transferred to the SICC.

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5 SIC 4 was tried before the Court in two tranches. The first tranche of the proceedings involved the determination of Senda's liability for minority oppression. The Court concluded that Senda had oppressed Kiri and ordered

Senda to purchase Kiri's 37.57% shareholding in DyStar, which was to be valued as at the date of its judgment, 3 July 2018 (see DyStar Global Holdings (Singapore) Pte Ltd v Kiri Industries Ltd and others and another suit [2018] 5 SLR 1). That decision was upheld on appeal in May 2019 (see Senda International Capital Ltd v Kiri Industries Ltd and others and another appeal [2019] 2 SLR 1). After the conclusion of the first tranche, the Court held, by way of an oral judgment delivered on 8 January 2019, that Kiri was to be awarded "full costs", and that all such costs were to be "taxed if not agreed".

6 The second tranche involved the determination of the value of Kiri's shareholding for the purposes of the buyout order. The Court delivered its decision by way of three judgments, and in a final judgment dated 21 June 2021, adjudged the value of Kiri's shareholding to be US$481.6m (see Kiri Industries Ltd v Senda International Capital Ltd and another [2021] 3 SLR 215 ("First Valuation Judgment"), [2021] 5 SLR 1, [2021] 5 SLR 111). In July 2022, Kiri's appeal against the Court's decision on valuation was allowed in part while Senda's appeal was dismissed, though the details of that decision of the Court of Appeal are not relevant to the present appeal (see Kiri Industries Ltd v Senda International Capital Ltd and another and other appeals [2022] SGCA(I) 5).

7 For clarity, we explain that, in this judgment, we refer to the period beginning with Kiri's commencement of its suit against Senda in the High Court

on 26 June 2015 until 3 July 2018, when the Court delivered its judgment on liability and made the buyout order, as "the Liability Tranche". The costs order made after the conclusion of the Liability Tranche in the oral judgment dated 8 January 2019 (see [5] above) is referred to as "the Liability Tranche Costs

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