IN RE TIMBER AND TRANSPORT KUMASI-KRUSEVAC CO., LTD. ZASTAVA BONSU AND ANOTHER

Timber and Transport Co., Ltd. (TAT) was a private limited liability company registered in 1966, primarily engaged in timber exploitation and exportation. By 1971, the company was insolvent with losses exceeding one million cedis, leading Barclays Bank Ghana Ltd. to appoint a receiver. In 1971, TAT entered into an agreement with Sumako Industrijski Kombinat Crvena Zastava (Zastava), a Yugoslavian corporation, to merge and form Timber and Transport Kumasi-Krusevac Co., Ltd. (the new company). Zastava contributed US$250,000 for a 50% shareholding, and the new company assumed all debts of TAT, with Osei Bonsu, Snr. personally liable for debts existing at the agreement date. The agreement included clauses granting Zastava exclusive management control and an irrevocable ten-year term prohibiting any member or director from petitioning for winding up during that period. Despite this, Zastava petitioned for winding up in 1979, alleging breaches by Osei Bonsu, Snr., including interference with management and expulsion of Zastava's representatives.

JUDGMENT OF SOWAH J.S.C. Sowah J.S.C. delivered the judgment of the court. It is appropriate for the proper appreciation of the issues involved, to start with the history of the company, Timber and Transport Kumasi-Krusevac Co., Ltd., hereinafter referred to as TAT-KK Co., Ltd. On 8 March 1966 there was registered with the Registrar of Companies, a private limited liability company, under the name and style of Timber & Transport Co., Ltd. (TAT) whose object, inter alia, was the exploitation and exportation of timber. The company had a subsidiary known as TAT Furniture and Construction Co., Ltd. The shareholders of the Timber and Transport Co., Ltd. were principally Osei Bonsu, Snr. who held over 95 per centum, the others being his son Osei Bonsu, Jnr. and his nephew Osei Tutu. It does appear from the affidavits filed by the parties that from the period 1966 to 1971 the company ran at a loss and that by 1971 the losses had exceeded the million-cedi mark. In the words of the appe...