閲嶇偣CASE.doc - Gambotto Case Common law SH...

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Gambotto Case ——Common law SH remedies (fraud on minority/alter constitution/protect rights attaching to shares) Case 结论 (1) Majority 不能随便改 constitution majority must not vote for an amendment to the constitution that is beyond the purpose the power was conferred (2) 强制收购 minority shares 必须有 proper purpose+fair in the circumstances Alteration of constitution to compulsory acquire shares of minority shareholders will only be valid if exercised for a proper purpose and is fair in the circumstances 如何判断收购是否 valid (1) Proper purpose test to prevent significant harm to the co eg if minority is competing with the co or if expropriation is necessary to comply with the law governing the co’s main business activities) (2) Oppression test whether the amendment is ‘ fair in all the circumstances’ 证明 fairness 两方面 • Procedural fairness ( 告知 SH+ 专家评价 ) requires majority to make full disclosure as to why amendment is necessary and get an independent expert’s valuation of shares to be expropriated; • Substantive fairness ( 收购价格必须 fair) means that the price for the expropriated shares must be fair Fact: Majority 为了节省很大一笔开销以及 tax benefit 通过投票改变 constitution 从而使 compulsory acquire minority’s (Gambotto) shares 合法 Issue:balance between interests between majority and minority When minority’s interests before majority? Decision: Gambotto (minority) Reasons: 不是 proper purpose (prevent harm) HC held that the amendment to the constitution was not for a proper purpose (it was designed to advance the commercial interests of the co not for prevent harm) [20] Daniels v Anderson (AWA case) Directors’ duty——leading case of Diligence Negligence standard Basic knowledge about business Directors are under a continuing obligation to keep informed about the activities of a corporation”
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Directors may not shut their eyes to corporate misconduct and then claim that because they did not see the misconduct, they did not have a duty to look General monitor of co affairs——attend board meeting regularly
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