Rights of Minority Shareholders
In the decision of the Court of Appeal in Profinance Trust SA v Gladstone (Case No: A3/2000/0435, 2 July 2001) (‘Profinance’), the rights of minority shareholders to have their shares purchased by other shareholders or the company under Sections 459-461 of the Companies Act 1985 (as amended) was extensively considered by Robert Walker LJ. It was concluded that the general purpose of these provisions is to provide a shareholder who has been unfairly prejudiced by the conduct of a company’s affairs with a remedy more flexible and less drastic than a winding up on “just and equitable” grounds.
However, Walker LJ observed:
‘It is well known among company lawyers that although Sections 459-461 were intended to provide a fairly summary remedy for minority shareholders who have been unfairly prejudiced, proceedings under the sections often become bogged down in a mass of written evidence containing numerous accusations and counter-accusations reminiscent of petitions and cross-petitions alleging cruelty under the old divorce law.’
Companies Act: Sections 459 & 461
Section...
To view and download this full PLR article, you must be logged in. Registration is completely free. Once you create your account, you will be able to browse, search & downlod from our PLR articles database of over "1,57,897+" on 1,000's of niches and 200+ categories without paying a penny. Click here to signup...
