VAMBARIS vs. ALTUNA AND ANOTHER

This was an application under section 218 of the Companies Code, 1963 (Act 179) by a shareholder of Altuna Brothers Ltd complaining principally about the conduct of the company’s solicitor and secretary, Samuel Awuku Okudjeto, who later became a shareholder and director. The applicant alleged that Okudjeto procured his appointment as director without a general meeting or resolution and that shares were redistributed so that the applicant’s holding was reduced, with Okudjeto receiving shares without paying for them. The court found that most complaints were not proved, but considered substantial the complaint concerning the manner in which the second respondent became a director and acquired shares. The court held that because the second respondent stood in a fiduciary solicitor-client relationship to the expatriate shareholders and the company, the transaction required strict scrutiny and independent advice, which was absent. Portion of judgment: “The only important complaint worth considering is about the manner in which the second respondent got himself made a director, and also the manner of the acquisition of the shares by him.” Also: “The first applicant states categorically that the second respondent paid nothing for the shares, and this is not denied by the second respondent.”

JUDGMENT OF HAYFRON-BENJAMIN J. This is an application under section 218 of the Companies Code, 1963 (Act 179). With the withdrawal of the second applicant, the application is pursued only by the first applicant, a shareholder of the company known as Altuna Brothers Ltd. The company was originally incorporated with the applicant, Jesus Altuna, and one A. C. Kuma as the sole shareholders and their holdings were 2,000 to 2,500 and 500 shares respectively. The company was engaged in fishing. The respondent Okudjeto was the secretary and the solicitor to the company. In these proceedings, Vambaris is the first applicant, and will in this judgment be referred to as such. A. C. Kuma will be referred to as the second applicant. Jesus Altuna will be referred to as the first respondent and Samuel Awuku Okudjeto would be referred to as the second respondent. The first applicant and the first respondent are expatriates with little or no command of the English language. The hearing of these pr...