Shareholder oppression: a $3.6 million warning for business owners
Date: 21 October 2026
Authors: Catherine Ballantyne - Genuine People
Excluding a shareholder from management, withholding company information or diverting business income can amount to shareholder oppression. Where conduct is commercially unfair, the Court can order remedies including a compulsory purchase of shares.
The Supreme Court of Victoria's decisions concerning ANIT Australia Pty Ltd demonstrate the financial consequences. Following findings of oppression in 2024, the Court fixed a buy-out price of $3,587,557 in October 2026 for a minority shareholding that the majority shareholders claimed was worthless.[1][2]
Background
- Mr Shadat, Mr Rahman and Mr Huraira, three friends who emigrated from Bangladesh, were shareholders in ANIT Australia Pty Ltd, trading as Albright Institute of Business and Language, a registered training organisation.
- Mr Shadat and Mr Rahman each held 38% of the shares, while Mr Huraira held 24%.
- In early 2020, Mr Rahman and Mr Huraira moved to separate from Mr Shadat. They incorporated a new company, ANIT Aus Pty Ltd, in secret and diverted student fees into its bank account, cut off Mr Shadat's access to company records, and removed him as a director on 31 March 2020.
Decision
In the 2024 decision, the Court found that the enterprise operated as a quasi-partnership, giving Mr Shadat a legitimate expectation of continuing to participate in management.
The oppressive conduct included:
- his exclusion from the management and affairs of the company;
- deliberately inaccurate financial records understating his loan account; and
- the diversion of income to ANIT Aus.
His Honour found Mr Rahman and Mr Huraira to be unreliable and untruthful witnesses.
Relief
Mr Shadat sought orders allowing him to buy out the majority shareholders, a sale of the business, or a winding up.
Instead, the Court determined in 2024 that the appropriate remedy was for Mr Rahman and Mr Huraira to buy Mr Shadat's 38% shareholding, with the price to be fixed following a valuation process.
In Re ANIT Australia Pty Ltd (No 2) [2026] VSC 660, the Court fixed the purchase price at $3,587,557.
Key takeaways
- The Court may order a different buy-out direction. The Court may require the majority shareholders to purchase the minority shareholder's shares, even where the plaintiff sought to buy out the majority.
- The valuation date matters. Where a business has grown quickly and its early accounts are unreliable, the Court may select a later valuation date rather than the date of exclusion, allowing the excluded shareholder to share in subsequent growth.
- Exclusion and financial manipulation can amount to oppression. Excluding a shareholder while keeping their capital locked in the company, and manipulating loan accounts, can support an oppression claim.
- Witness evidence must be reliable. Witness statements that do not reflect a witness's own recollection, or that are changed significantly at trial without notice, can seriously damage credibility.
Frequently asked questions about shareholder oppression
Shareholder oppression involves conduct that is oppressive, unfairly prejudicial or unfairly discriminatory towards a shareholder. A decision with which a minority shareholder simply disagrees will not, by itself, establish oppression. The issue is whether the conduct involves commercial unfairness.
Examples may include:
- unfairly excluding a minority shareholder from the affairs of the company;
- unreasonably denying access to company information; or
- diverting a legitimate corporate opportunity to the majority shareholder or an associate.
Yes, depending on the circumstances. Exclusion may be oppressive where a shareholder has a legitimate expectation of participating in management, particularly where the company operates as a quasi-partnership.
In the ANIT Australia proceedings, the Court found that Mr Shadat had such an expectation. His removal as a director and exclusion from the company's management formed part of the oppressive conduct.
If oppression is established, the Court has broad powers under section 233 of the Corporations Act 2001 (Cth) to make orders to resolve the dispute.
Those orders may include:
- that the company be wound up;
- that the company's constitution be modified or repealed;
- orders regulating the future conduct of the company's affairs; or
- that a shareholder's shares be purchased by another shareholder or shareholders.
The appropriate remedy depends on the circumstances of the case.
Yes. The Court may determine that a different buy-out direction is the appropriate remedy for the oppression.
In the ANIT Australia proceedings, Mr Shadat sought to buy out the majority shareholders, among other alternatives. The Court instead determined that the majority shareholders should buy his minority shareholding.
In many cases, a buy-out order will require valuation evidence to help the Court determine a fair price for the shares. The valuation may need to account for the position the company would have been in had the oppressive conduct not occurred.
Valuation evidence can be important both at trial and in mediation. Obtaining advice about the scope and timing of that evidence early can help the parties understand the financial issues in dispute.
Not necessarily. The Court selects a valuation date appropriate to remedying the oppression, having regard to the circumstances.
In the 2024 ANIT Australia decision, the Court selected 30 June 2023, rather than the date of Mr Shadat's exclusion in 2020. The appropriate date can materially affect the value of the shareholding.
[1] In the matter of ANIT Australia Pty Ltd [2024] VSC 705.
[2] Re ANIT Australia Pty Ltd (No 2) [2026] VSC 660.
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