THE EDITOR, Madam:COMPANY LAW, which includes the Company Act of 1967 as amended by various Acts and case laws on the subject, makes several provisions to protect minority interests. However, these provisions do not go far enough as will be demonstrated herein in relation to companies with share capital.
Section 129 (1) (b) states (inter alia) in substance and in form that in so far as articles of a company do not make any other provision, two or more members holding not less than one-tenth of these issued share capital may call a meeting. Against this background, public companies including those listed on the Jamaica Stock Exchange should have not less than two or more members holding not less than one-tenth of the issued share capital, and these shareholders should be entirely independent of and unconnected with those holding the remaining nine-tenths.
Section 66 of the Act provides, inter alia, that subject to confirmation by the Court, a company limited by shares is so authorised by its articles, by special resolution to reduce its share capital. This resolution to be effective must be passed by company at its general meeting or extraordinary general meeting at which every member is entitled to vote.
In the case of Ciboney, Ocho Rios, the virtual substratum of the company, not just the reduction of shares are here involved, there is no requirement for a meeting of the shareholders. I hope that the company will call an extraordinary general meeting before the contract for the sale is effected, because although there is no law preventing the sale by the majority, it would be unfair to minority shareholders to be deprived of an opportunity to debate the sale.
I do not think it is good commercial practice and in the interest of shareholders for sales price to be fixed for three years hence. What the lessee should be given is the first option to purchase at a price to be fixed after deliberations at general or extraordinary general meetings proximate to the three years.
I am, etc.,
OWEN S. CROSBIE
Shareholder
