INVESTPRO LIMITED vs. MANDUMO INVESTMENT HOLDINGS (PTY) LIMITED, PROTEA COIN GROUP AND PROTEA COIN GROUP GHANA LIMITED [2016]DLHC4266

INVESTPRO LIMITED vs. MANDUMO INVESTMENT HOLDINGS (PTY) LIMITED, PROTEA COIN GRO... [2016]DLHC4266

Date	2016-02-12
Suit No.	SUIT NO. MISC 21/2013
Citation No.	[2016]DLHC4266

SAMUEL K. A. ASIEDU

MR. ELLIS ARTHUR FOR MR. KIZITO BEYUO FOR THE APPLICANT

MR. JOSEPH K. KONADU FOR DANIEL A ASIEDU FOR THE 1ST AND 2ND RESPONDENTS

[2016]DLHC4266
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													<main id="main" class="content" style="min-height: 60rem" ><a name="OLE_LINK1">INVESTPRO LIMITED<o:p></o:p></a>vs.<o:p></o:p>MANDUMO INVESTMENT HOLDINGS (PTY)
LIMITED, PROTEA COIN GROUP AND PROTEA COIN GROUP GHANA LIMITED&nbsp;&nbsp; <o:p></o:p>&nbsp;[HIGH COURT (COMMERCIAL DIVISION), ACCRA]<o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0in 0in 1.0pt 0in">

SUIT NO. MISC 21/2013&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;DATE: 12TH FEBRUARY, 2016 <o:p></o:p>

</div>COUNSEL:&nbsp;&nbsp; <o:p></o:p>MR. ELLIS ARTHUR FOR MR. KIZITO BEYUO FOR THE
APPLICANT <o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
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MR. JOSEPH K.
KONADU FOR DANIEL A ASIEDU FOR THE 1ST AND 2ND
RESPONDENTS
<o:p></o:p>

SAMUEL K. A. ASIEDU, JUSTICE
OF THE HIGH COURT<o:p></o:p>

</div><o:p>&nbsp;</o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
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<p class="MsoNormal" align="center" style="margin-bottom:0in;margin-bottom:.0001pt;
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padding:0in;mso-padding-alt:0in 0in 1.0pt 0in">JUDGMENT<o:p></o:p>

</div>The 3rd respondent is an
incorporated company in Ghana which offers security services to various
companies and institutions in the country. In May 2013, the applicant, a
limited liability company, which holds thirty percent (30%) of the shares of
the 3rd respondent filed an originating motion for reliefs under
section 218 of the Companies Act, 1963 Act 179. <o:p></o:p>The said motion sought reliefs against the 1st
and the 2nd respondents herein who together hold seventy percent
(70%) of the shares in the 3rd respondent company. In the course of
the proceedings, the parties agreed that they could no longer work together and
that the 3rd respondent should therefore be valued in order that one
party buys out the shares of the other. The court therefore appointed KPMG to
value the 3rd respondent. The valuation was accordingly done and a
report, dated October 2015, was submitted to the court.&nbsp; <o:p></o:p>The applicant and the respondents have both
expressed an interest to buy the shares of the other party. Again, one question
that cropped up was the value of the company at which the shares should be
purchased. Subsequently, counsel were ordered to file their addresses on the
issues for the court’s determination. They both filed their addresses on the 28th
January, 2016.<o:p></o:p>It is clear from the addresses filed on
behalf of the applicant that the applicant has now softened its earlier stand
to buy the shares of the respondents. The applicant holds thirty percent of the
shares in the 3rd respondent company. The respondents together hold
seventy percent of the shares in the 3rd respondent company. It is
clear therefore from the shareholding structure that the applicant is the
minority shareholder whilst the respondents are the majority shareholders.
Again, it is the applicant who complains of oppression by the majority and
hence its inability to continue to work with the majority shareholders. It
therefore stands to reason that if there is the need for one of the parties to
bow out of the company in order that the company can continue to run smoothly
and without acrimony then it must be the applicant and not the respondents. In
the circumstance the court agrees with counsel for the respondents when he
submitted in his addresses that “in the event of a shareholder fall-out, in the
first instance, it is the majority shareholder who should be given the option
of buying out the minority especially when the fall-out is as a result of a
complaining minority. In such a case, the complaining minority is the one who
should be bought out at a fair value unless the majority opts to be bought out
and the minority is willing and able to.” Indeed, the court adopts the
principle of law enunciated in the case of Fedorovitch
vs. St. Aubins Pty Ltd [1999] NSWSC 776 that “the proper order under such
circumstances was for the oppressor to purchase the shares of the oppressed’. <o:p></o:p>This, certainly, does not mean that there
could never arise a situation where an order could be made for the minority
shareholder to buy out the shares of the majority shareholder. For, as stated
in the Australian case of Fexuto Pty
Limited vs. Bosnjak Holdings Pty Limited and Others [2001] NSWCA 97 that <o:p></o:p>“It is only a
systematic course of improper conduct on the part of the majority that would
justify an order that the minority [be entitled to] acquire, by compulsion of
the court, the shares of the majority”<o:p></o:p>Nonetheless, as already pointed out, the
applicant who is the minority shareholder has backed down from its earlier
position to acquire the shares of the respondents who have the majority of the
shares of the 3rd respondent. Accordingly, the court makes an order
for the shares of the applicant to be </main>