Rahman v Malik & Ors

Rahman v Malik & Ors

The petitioner was entitled to relief under s 994 Companies Act 2006 because there was an agreement that he would succeed his father as equal shareholder and director, but was excluded from management, denied dividends, and his shareholding was diluted without authority. The delay was justified by personal circumstances and did not prejudice respondents. Offers to buy out petitioner were not reasonable as they failed to account for unpaid dividends and under-declared profits.

Parties
Petitioner: Shajnur Rahman; First Respondent: Abdul Malik; Second Respondent: Runa Lumina Akthar Malik; Third Respondent: Gate of India (Tynemouth) Limited
Jurisdiction
England and Wales
Judgment Date
27 February 2008
Procedural Posture
Petition Under Companies Act / Final Judgment After Trial
Outcome
Petition allowed; relief granted to petitioner.
Legal Topics
Unfair Prejudice, Shareholder Rights, Quasi Partnership, Directorship, Dividend Entitlement, Share Dilution, Valuation of Shares
Company Law Equity Unfair Prejudice Shareholder Rights Quasi Partnership Directorship Dividend Entitlement Share Dilution +1 more

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Parties

Shajnur Rahman

Petitioner

Abdul Malik

First Respondent

Runa Lumina Akthar Malik

Second Respondent

Gate of India (Tynemouth) Limited

Third Respondent

Procedural Posture

Petition Under Companies Act / Final Judgment After Trial

Legal Issues

  1. 1 Whether the affairs of the company were conducted in a manner unfairly prejudicial to the petitioner
  2. 2 Whether the petitioner was entitled to relief despite delay
  3. 3 Whether the petitioner was entitled to relief in respect of outstanding dividends

Ratio Decidendi

The petitioner was entitled to relief under s 994 Companies Act 2006 because there was an agreement that he would succeed his father as equal shareholder and director, but was excluded from management, denied dividends, and his shareholding was diluted without authority. The delay was justified by personal circumstances and did not prejudice respondents. Offers to buy out petitioner were not reasonable as they failed to account for unpaid dividends and under-declared profits.

Court Disposition

Petition allowed; relief granted to petitioner.

Orders

  • Mr Malik to purchase petitioner's shares at 50% of company value, valuation date being date of order.
  • Valuation to reflect reconciliation of funds diverted to Cuisine and under-declaration of profits (15% increase for first two accounting periods).