CFI shareholders seek nullification of extraordinary general meeting

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Business Writer —
Boardroom wrangles at CFI Holdings have spilled over into the courts after major shareholder Stalap Investments and three other shareholders filed a High Court application for a declaratur to nullify the group’s Extraordinary General Meeting held recently citing a litany of alleged procedural flaws.

The Extraordinary General Meeting Stalap is seeking to nullify, voted against the motion to reverse the disposal of 81 percent of Langford Estates for $18 million to Fidelity Life Assurance in settlement of a debt and also dismissed the resolution to alter the company’s Articles of Association. The court application comes after the EGM went ahead in spite of a number of complaints over alleged irregularities, which saw none of the motions being carried.

Yet Willoughby Investments later misrepresented the outcome of the meeting through media by claiming that only one resolution, out of three, had been carried. Willoughby, owned by businessman Nick Van Hoogstraten, had requisitioned the EGM. The company sought the EGM to overturn the results of an EGM in 2015, which approved disposal of Langford Estate, arguing that the transaction was illegal since parties to the deal had not disclosed that they were related and should not have participated in voting over the proposed disposal.

In an application filed through Kantor & Immerman Legal Practitioners, Stalap cites Willoughby’s Investments (Pvt) Limited, Itai Valerie Pasi and CFI Holdings as first, second and third respondents respectively. Zimre Holdings Limited, Douglas Mamvura and Ramsway (Pvt) Limited are second, third and fourth applicants respectively.

“As will more fully appear from this affidavit, the second respondent, being Ms. Itai Valerie Pasi, a non-executive director of CFI Holdings Limited, who purported to chair the Extraordinary General Meeting requisitioned by Willoughby’s Investments, in the Applicants’ view, acted unlawfully and irregularly,” submitted Stalap.

The Extraordinary General Meeting, argues Stalap, was not held in an impartial and transparent manner and that the chairperson did not conduct herself partially and fairly. The applicants also further argue the chairperson did not act rationally to the extent that the proceedings cannot be found to have been in full compliance with the requirements of the Companies Act [Chapter 24:03. The applicants said Pasi failed to discharge her fiduciary duties to all shareholders of the company in that she failed to conduct herself in full compliance with the Companies Act in purporting to chair the meeting having chaired in a partisan and biased manner and prevented a disclosure of material information at the meeting.

“The present application is for an order setting aside the proceedings of an Extraordinary General Meeting of the 3rd respondent, which was held on the 15th November 2017. Inter alia the applicants jointly and severally seek a declaratur from this honourable court in terms of the draft attached to these papers.”

The application says that the Pasi misdirected herself in the conduct of the meeting by failing to require that the requisitioning party place information before the meeting that would allow members to be fully informed on the resolutions requested or tabled and their purpose.

“Failing to require the requisitioning parties to provide relevant information in accordance with the Articles of Association and the Zimbabwe Stock Exchange Listing Rules in unilaterally determining that any questions raised at the meeting would only be answered through a press statement by Willoughby’s after the meeting and after all the votes had been tallied which has not been published to date.

“In failing to explain the basis upon which she made the finding of fact that Stalap and ZimRe were allegedly “related parties” and in failing to recuse herself as an interested party instead of chairing the meeting,” reads the application.

In view of the said, the applicant submits that, “I respectfully aver that, on the basis of the aforegoing, as read with the record of the meeting, this Honourable Court may properly set aside the appointment of second respondent as the chairperson of the meeting properly set aside and declare all the business conducted at the meeting a nullity.”

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