It will also include legitimate expectations of membership ie expectations

It will also include legitimate expectations of

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It will also include “legitimate expectations” of membership, i.e., expectations related or connected to rights of membership. The act, proposed act, conduct or omission must also concern the interest of members in their capacity as members and not in any other capacity. For example, any act or omission that devalues shareholders’ shares or interest in the company would be a commercial detriment. It would be unfairly prejudicial for majority shareholders who are directors to dismiss minority shareholders who are also directors from the board without just cause, or for majority shareholders to divert business from the company to another company or to appropriate company property. It would also be unfairly prejudicial to prevent a shareholder from selling his shares at the best price or to compel him to sell below the market value. The following cases illustrate some of the circumstances in which unfair prejudice has been found to exist: Re London School of Electronics Ltd. [1986] Ch 211 – Shareholders who controlled 75% of a company’s shares diverted the business of the company to another company in which they were also the major shareholders. This deprived holders of the remaining 25% shares of their share of the company’s profits. It was held that this was an unfairly prejudicial conduct. Download free eBooks at
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BUSINESS ORGANISATIONS AND AGENCY MEMBERS’ POWERS AND THE PROTECTION OF MINORITIES 420 Re Cumana Ltd. [1986] BCLC 430 – Two owners of a company agreed to share the profits at the ratio of 2:1. The majority shareholder devised many ways to deprive the minority of his own share. First, he diverted the company business to another company controlled by him; secondly he made large rights issue that he knows the minority shareholder could not afford; and thirdly he got the company to pay excessive contribution to his pension fund. It was held that these conducts were unfairly prejudicial to the interest of the minority shareholder. Re Little Olympian Each Ways Ltd (No.3) [1995] 1BCLC 636 Directors of a company transferred their shares to a new company in which they had controlling interest. They then sold the assets of the company to the new company for a nominal price of £1.00. Then the directors subsequently sold their shares in the new company for £10 million. It was held that this was unfairly prejudicial conduct. Re Elgindata Ltd. [1991] BCLC 959 – The managing director of a company used assets of the company for the benefit of himself, his family and friends, but to the detriment of the company. This was held to be an unfairly prejudicial conduct. Download free eBooks at Click on the ad to read more MASTER IN MANAGEMENT [email protected] Follow us on IE MIM Experience #10 WORLDWIDE MASTER IN MANAGEMENT FINANCIAL TIMES 55 Nationalities in class 5 Specializations Personalize your program Length: 1O MONTHS Av. Experience: 1 YEAR Language: ENGLISH / SPANISH Format: FULL-TIME Intakes: SEPT / FEB
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