P.S. Investment Ltd Vrs Central Regional Development Coperation and Others [2012] GHASC 21 (18 April 2012)

P.S. Investment Ltd Vrs Central Regional Development Coperation and Others [2012] GHASC 21 (18 April 2012)

The Supreme Court held that the sale of CEREDEC shares in TOPP to Unilever was void as it breached Regulation 32(a) and the Companies Act, 1963 (Act 179), no valid offer was made to existing shareholders, the plaintiff's pre-emptive rights were not waived, the directors breached their fiduciary duties, and the DIC had capacity as agent. The rule in Foss v Harbottle did not bar the action due to statutory exceptions for personal rights and breaches of regulations.

Citation
[2012] GHASC 21
Parties
Plaintiff/appellant: P. S. Investment Limited; 1st Defendant/respondent: Central Regional Development Corporation (CEREDEC); 2nd Defendant/respondent: Unilever Ghana Limited; 3rd Defendant/respondent: The Attorney General of the Republic of Ghana; 4th Defendant/respondent: Divestiture Implementation Committee; 5th Defendant/respondent: Ibrahim Adams; 6th Defendant/respondent: G. D. Apatu; 7th Defendant/respondent: S. A. Duah; 8th Defendant/respondent: P. M. Boyce; 9th Defendant/respondent: Osam Duodo; 10th Defendant/respondent: Nelson Kyei; 11th Defendant/respondent: I. K. Yeboah; 12th Defendant/respondent: Dr. T. E. O Yeboah; 13th Defendant/respondent: Frank Baku; 14th Defendant/respondent: Twifo Oil Palm Plantation Ltd.
Court
Supreme Court
Jurisdiction
Ghana
Judgment Date
18 April 2012
Procedural Posture
Civil Appeal / Supreme Court Final Appeal
Outcome
Appeal allowed; lower court judgments set aside; reliefs granted as per amended writ of summons except relief 7 dismissed.
Legal Topics
Pre Emptive Rights, Variation of Shareholder Rights, Majority Rule and Exceptions, Fiduciary Duties of Directors, Capacity of Statutory Bodies, Derivative Actions
Source Language
English
Company Law Contract Law Pre Emptive Rights Variation of Shareholder Rights Majority Rule and Exceptions Fiduciary Duties of Directors Capacity of Statutory Bodies Derivative Actions

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Parties

P. S. Investment Limited

Plaintiff/appellant

Central Regional Development Corporation (CEREDEC)

1st Defendant/respondent

Unilever Ghana Limited

2nd Defendant/respondent

The Attorney General of the Republic of Ghana

3rd Defendant/respondent

Divestiture Implementation Committee

4th Defendant/respondent

Ibrahim Adams

5th Defendant/respondent

G. D. Apatu

6th Defendant/respondent

S. A. Duah

7th Defendant/respondent

P. M. Boyce

8th Defendant/respondent

Osam Duodo

9th Defendant/respondent

Nelson Kyei

10th Defendant/respondent

I. K. Yeboah

11th Defendant/respondent

Dr. T. E. O Yeboah

12th Defendant/respondent

Frank Baku

13th Defendant/respondent

Twifo Oil Palm Plantation Ltd.

14th Defendant/respondent

Procedural Posture

Civil Appeal / Supreme Court Final Appeal

Legal Issues

  1. 1 Whether the sale of CEREDEC shares in TOPP to Unilever was contrary to Regulation 32(a) and the Companies Act, 1963 (Act 179)
  2. 2 Whether the plaintiff's pre-emptive rights were breached or waived
  3. 3 Whether the Divestiture Implementation Committee had capacity to sell the shares

Ratio Decidendi

The Supreme Court held that the sale of CEREDEC shares in TOPP to Unilever was void as it breached Regulation 32(a) and the Companies Act, 1963 (Act 179), no valid offer was made to existing shareholders, the plaintiff's pre-emptive rights were not waived, the directors breached their fiduciary duties, and the DIC had capacity as agent. The rule in Foss v Harbottle did not bar the action due to statutory exceptions for personal rights and breaches of regulations.

Court Disposition

Appeal allowed; lower court judgments set aside; reliefs granted as per amended writ of summons except relief 7 dismissed.

Orders

  • Declaration that the sale of CEREDEC shares in TOPP amounted to a variation of plaintiff's rights without consent.
  • Declaration that the sale was contrary to law and Regulation 32(a).