20160815 TZCA Dar es Salaam

--~ ---·-~. - --'··· . - ~ ,' )----~ ---~-- -- ----- - - - ~ - - . - · . ~ _ c _ -_ . ·- - ~~-•, - . ~I IN THE COURT OF APPEAL OF T1!),NZP.!'-JIA - AT DARES SALAAM - (CORAM: !<ILEO, .J.A., KIMARO, J.A., And f\'!ASSATI,J.A.) CIVIL ft.PPUCATION [•JO. 75 OF 2013 J.. f/f/\RY BUNDf.-1.Lf... l 1 2. FIRST SEAL COMPANY LIMITED) ......................................... APPLICANTS

VERSUS l. F::IPE: (T) LIMITED 3. CH/J.R.LES BURCHARD RVVECHUNGURA......................... RESPONDl:NTS /,r,n!ir::,'-=0·1 ( 1,'""\ t-" I l •--~LI 1 1 A r·-::,,.:c;o,-1 Co- t. ii t ~ • , O" I t't-,""' n,,,:,~a or-. t 11'·D , ,._. i \. ~ .... 1 l, I ;.JJ , ..__. ,_,;c~1·1 L l .....~ Coiir·'c _, ._ , oc.i 1-----,::,1-ia: -:•i· Ct ( i -'-~ i. · f:;. '--- [)a r Es Sa[aan1 (Con1t-rter~c~a~ fJfr,/ision) (Bukuku, J.) dated lt th /\pril, 201.3 In DOVETEL (T) LIMITED trading as SASATEL TA1\JZANIA is a limited liability company incorporated under the Lavvs of Tanzania. It vvas formed for conducting businesses of Information and Communication Technologies (JCT) in Tanzania. It started with share capital of 1,000,000 ordinary shares of l, 000 Tanzania shillin~Js each with a total of four shareholders. RIPE (T) LIMITED is a minority shareholder in the company. PETER CHITAMU, a 1 natural person, was a founder,· chairman and one of the directors in the company. MARY BUNDALA, a natural person, is one of the members and Director of the company. KATHRYf\J NGEND1~ KIGA.R,t,.BA, a natural person, is a consultant of the company and a Director. FIRST SEi\L COMPANY LIMITED is a limited liability company and one of the mernbers and majority shareholder after purchasing the shares of PME Tanco (Mauritius) ('PME"). On 14 th December 2011, a petition was filed in the High CoLn-t of Tanzania, Commercial

Division, (Miscellaneous Civil Case No.33 of 2011) seekinu, for administrative 01·ders unde1· sections 247 and 248 of. the Con1panies fa.ct, (!\ct f\Jo. 12 of 2002). It was the compc:my itself which by a Special Resolution cJatecl 13 th Septerr1ber 2011 resolved to have the 21ppoint1T1e11t of an Administ1·ator. At that time PME Tanco (Mauritius) ("PMl:") was the majority shareholder in the company and was financing the company. It clecided to stop financing the company because of the Company's inability to pay for an amount of Ur1itecl States Dol!ar 37. 7 million aclvc1ncccl to it. Together with the ziccruecl interest on the an1ount advanced to the company, the total arnount it was claiming from the company was United States Dollars 2 -· - -··-- ·----··- -----· ------------- . .. . ---. ~----- ----- - '• . . - "-----~ ... ---. - - - ------ ---------- . ----- _..,_ __ --- . - , __ ~ - - - , ~ - - --<---.--- - . - --------- ·-- - - - - •. fourty one thousand and point seveh (41,000.7). ZTE Corporation ("ZTE") was also claiming from the company an amount of United States Dollars six million point seven (6.7) being an amount that remained unpaid, for equipment supplied and other services 1·endered to the company. On 20 th December, 2011 the trial court appointed Mr. Charles Rutayumba Rv,;echungura as an l\dministrator of the company. He vvas directed by the court to comply

\Nith the provisions of section 259 of /\ct No. 12 of 2002 in administering the company. Specifically, he vvas di1·ected to ensure: i) that sha1·e purchase agreernent t:o replace PM!:: was signed by all parties; ii) the the11 members of the Board were discharged of their duties and new members of the Board weI·e appointed to represent the new Shareholder (the one pu1·chasing the shares of Pf'/iE); iii) the management of business and assets of the company were vested in the new shareholder /Di1·ectors; iv) The administrator had to complete those duties in a period of three months. v) The administrator had to report to the court on completion of those duties on 2ist Septen,ber2012. 3 On 3 rd September 2012 before the date the trial court set for the Administ1°ator to report on the progress of the duties he had been directed to do, the court made an order to discharge Mr. Rwechungura from the duties of administ1-ation of the company. The court vvas satisfied that he had 1-escu2d the company as a going concern through a sale of shares of the company. However, not much time elapsed before RIPE LIMITED /-\f\JD PETER CHITAfv1u filed anothe1· petition in the same division of the High Court clain1ing that 1=JRST SEAL_ COMP/\~~Y, the company which becarne a n1ajo1-ity sha1-eholde1- by virtue of pu1-chasi11g the shcffes owned by 1~f'/J[ was not running the company profitably. The

petitioners complained that the compa11yvvas leading to a worse situation. Parties to the petition filed (Miscellaneous Civil Application No. 29 of 2012) were RIPE (T) LIMITED and PETER CHITAMU the first and second applicants respectively and MARY BUNDALA, l<ATHRYN NGENDA KIGARABA and FIRST SEAL COMPANY LIMITED, the first to third respondents respectively. ":. ... ,. . ,. -- -- ------ The complaint by the petitioners as averred in the petition was that - following the pull out of PME, the resolution that was made by all the shareholders of DEVOTEL (T) LIMITED that the shares of PME be sold to the thi1-d respondent, was made out of information and assu1-ance made by first and second respondents that the third respondent was reliable and suitable to buy the shares of PME. But that did not turn up to be the real situation. The share purchase prncess was completed on 2 nd July 1 2012 and the third respondent became the potential buyer· of the 65% shares held by PME and paid USD 1.00 in consideration of taking over all the company liabilities. But prior to the third respondent taking over·1 she was rnade avvare in .January 2012 of tht~ urge11t need to pay the er-editors an outstanding amount of US$ 250,000. The third respondent failed to pay despite several reminders to her·, and the mar1y promises she made to clo so. The situation wo1·senecl because the first and second

respondents became the rr1ain signatories of the third respondent and Directors of the Cornpany and clemanclecl full cont:rnl of the company. The decision was macle despite having full knowledge that no funds were ejected into the company business. The othe,· shareholders were excluclec! when the decision was rnacle. That put the company business and other men1bers of the 5 company into high risk as some of the company creditors withdrew their services. The petitioners also alleged that the 1st and 2hd respondents using their position as majority shareholder and directors acted and pushed the affairs of the company in a manner prejudicial to the company business and interests of the other shareholders, including the firing of competent employees and replacing them with nevv incompetent employees. Further-more, the second respondent assumed the position of Chief Finance Officer while she had no experience in telecommunication business and he1- appoir1tment vvas not even confinTH~d by othe1- members. In ciclclition, there was misma11ageme11t of fLmds of the company. The first ar1d second respondents paid themselves consultants fees while the company had difficulties in paying staff salary on time and not in full, because the company's Bank Account was almost empty and there was poor munagement of the business sites. /\t the time the administrator was clischargecl from his duties,

no funds had beer1 ejected into the business and the financial position of the company was going worse. It was also averred in the petition that the first and second respondents failed to disclose the financial capability ancl identity of the third respondent, refused to meet, and or, turned clown new investors brought by the second petitioner, who was 6 the chairman, founder and director of the company. The petitioners say that - -· - -- all the averred complaints against the first and second respondents caused serious constraints to the business of the company and had increased the compaI1y liabilities to over Tanzanian shillings 9,000,000,000/=. (Tanzanian shillings nine billion) and immediate cash r·equired to pay creditors and service supplie1·s was over 1,000,000,000 (Tanzanian Shillings one billion). r=rnm the complaints made, by the petitioners they applied for· following 01·ders: - (1) A declaration that the pt and 2 nd Respondents have been conducting the Cornpany's affair·s in a marn1er unfair·ly prejudicial to the interest of the shareholders' interest and to the company itself. (i) An order· to relieve from duties the pt and 2nd respondents as Directors of the Company and appoint Mr. Thornas Mtar·ima l<ohi as Administrator to regulate the conduct of the company's affairs in the future. (ii) An order for the pt Petitioner to purchase shares held by the 3 rd

Respondent in the company pending the soliciting of new potential buyer investor or alternatively order the 3 rd 7 ----:- ---~~·--·x-- - - . - - - · · -~•---"J---------·:--~-----:_.. · . . ___ - - - ~ - ' - ·• respondent's shares be relinquished to · the company and remain unpaid but unallocated. The status of the petitioners when they filed the petition was that RIPE (T) LIMITED was the minority shareholder and PETER CHITAMU was a member, Director, and founder of the company. The respondents disputed the aspect of mismanagement of the company and putting it on administration. They also disputed the "locus standi" of the petitioners in filing the application. Although the 1·espondents accepted that there were problems in the company, they said it was normal drawbacks, and given tirne, the comp2rny business would stabilize. The learned trial judge (Bukuku, J.) after hearing the parties and analysis of their grievances observed that a minority shareholder is not totally impotent. Both under the general law and under the Companies Act there is son1e protection which gives leverage to the minority shareholders to curb excesses of the majority shareholders. The !earned trial judge observed further that in some circumstances, a minority shareholder may be affected by a wrong done by the majority shareholder 8 not personally but to the company. In such a situation the

minority shareholder has a right to petition to the court under sections 233 (1), (3), (a), (c) (d) 247 and 248 of the Companies Act, No. 12 of 2002 for a remedy. The learned judge said the section is founded on a presumption that, the affairs of the company a1-e being conducted by. the majority shareholders in a rnanner unfairly prejudicial to the interests of minority shcffeholder or some of the rnembers generally. In such a situation the cou1t is empowered to i11tervene by granting an order providing for a clean break. Orders fo1- the adjustment of the unfair prejudices to the mino1-il:y as prnvecl, rnay be given. This would include ordering the co1-npany to be valued, or shares to be sole! or regulating the conduct of the affairs in future or make interim or final orders in 1-espect of the matter cornplained of and orde1-s prayed for as deems fit. Referring to the application that was made earlier, on 20 th December, 2011, thE; learned jud~Je said the court had made an order appointing Mi-. Charles Burchard Rwechungur-a to be an admi11istrator of the company for pt.ll'poses of overseeing that the company was rnade a going concern. One of his duties was to ensure that the parties signed a purchase agreen1ent. That cluty was clone. However, what was apparent from the 9 ·- _. __ ---··-· ----··· - ··-- :__ - ·- -- -- -· . . .. - -· --~--------------------~~-----····-·--··-:.·_

.·-·----·--··-.--·-----· ---··-· --------- .- - .-- . ---------~- · - - - petition was that the new investor who bought the shares of PME, that is First Seal Company, had not been able to make the company reach the envisaged goal. It failed to inject capital into the company for purposes of making it run its business. She noted that the parties are in agreement that the company is not in good financial standing. Capital needs to be injected in the company to make it a going concern and expand its business ope1-ation. The learned judge opted in her decision to appoint Mr. Charles Rwechungura who was coi1versant with the problems facing the company because he was earlier on appointed to do the same job, insteacl of Mi-. Tho1Tias MtEJrima who vvas proposed by the petitioners. The period of appointment was six rnonths to run from 11 th of /\pril 2013. His duties were to act in consultation with the shareholders to:- (a) cause an Extra Ordinary General Meeting of the shareholders be convened for addressing the issue of capital of the company. (b) cause the third respondent to pay for the 65% shares or in the aitemative, to solicit for new investors to 1Jurchase the said shares and con1e up with a business strategy. ( c) cause to be prepared a report of the affairs of the company, including financial position, business trend and human resource. 10 ·. . - -.- - - _... . . . - .. .....

··~·-··. -· ·---·- ·--- ·-.·- - .. - --- . --- . -- -- -- - -~-- - - - - ' - - .. --· .. - --·- ---·-------. - - - --· ·-- ··- •--- - - -- -- . - ·- - ~------ - ·-- - ( d) perform such other duties as may be for the betterment of the company. The respondents were aggrieved by the decision of the High Court. Since the decision of the High Court is not appealable as it was an administration order issued under section 233 of the Companies Act, the respondents filed this application for revision under section 4(3) of the Appellate Jurisdiction Act, [CAP 141 R.E.2002]. The Court is requested to call for· the record of Commercial Case No. 29 of 2012 for purposes of satisfying itself as to the cor~r-ectness, legality, r·egu!ar·ity and pr·opriety of the ruling ancl the 01·der·s that followecl. The grnu11ds given a1·e rnany. ·rhey are:- (a) The aspect of the majority shareholders conducting the business of the company in a manner prejudicial to the interests of the company and the first and second respondents. (b) The aclrY1inistration order was premature because of being instituted only after 45 days of the previous administration order while the second applicant had already come up with a five year business Recovery Plan. 11 . . - ---·-- - ---~--·-• ( c) The orders contradicted the previous orders given in the earlier application for administration. (d) The finding of the learned

judge that the applicant bought 65% sha1·es in DEVOTEL (T) Limited on condition of applicant paying the creditors of DEVOTEL (T) LIMITED and on condition of injecting capital in the company. (e) The 01·der that the third respondent should cause the second applicant to pay the 65% shares in DEVOTEL (T) LIMITED is disuiminatory and unfai1·ly selective as against the second applicant in as much as it does not 1·equi1·e other shareholders to pay the unpaid up sha1·es and it does not take into account that the said shares are fully paid up. (f) The 01-der requiring the third respondent to cause the second applicant to sell its 65% shares ir1 DEVOTEL (T) LIMITED is unfair and illegal as long as it expropriates the second applicant financial assets and interests without any justifiable cause. (g) The order requiring the third respondent to cause the second applicant to sell its 65% shares in DEVOTEL (T) LIMITED with a view of raising the company's capital is unconscionable, illogical, 12 . --- •. ·... --- .•· ----·· -- - ,_ ·- ·-. --- - . -- ---· - -·-- . - -··---- -----. --- - . -- . ---· ·. --- -- . ·- -----·-- ----·- --- - - -----·-··· ··~ -.::~ _... -------- ·-· -·-- ---- - - and self-defeating because the purchase price will not be paid to the second applicant but to the DEVOTEL (T) LIMITED. (h) The learned judge is faulted for having entertained the petition while it was filed

in bad faith by the first and second respondents because they wer-e the ones managing the company until vvhen the 01-der of adrninistr-ation was made on 20 th December 2011. (i) The administration order in respect of DEVOTEL (T) LH11ITED was issued erroneously because the petition vvas not well founded. The applicatior1 is supported by the affidavit of fv1ary Bunclala. For the first and second respondents an affidavit in reply to oppose the application has been filed by Dr. Peter Jonas Chitamu. Before us for the hearing of the application, the applicants were represented by Mr. Martin Matunda lear-necl advocate, while Dr. Chitamu appeared in person and also on behalf of the first r-esponclent. In support of the.application Mr. Matunda submitted that the applicants are shareholders in DEVOTEL (T) LIMITED). Dr. Getrude Rwakatare and PME Mauritius Lirnited who were the majority shareholders withdrew from the cornpany. Mr. Matuncla repeated what the parties averred in the 13 --- . ...., .... __ - - - ------- - ---- ------------ -------------~---- pleadings which we have reproduced above. Starting with ground (i); he said the respondents had no '1/ocus stand!' to file the application. VVhile sections 247 and 248 vest in the High Court povver to grant administ,·ation orders 1 said the learned advocate, Rule 36(1) of the Companies (Insolvency) Rules ,·equires the petition to be filed

unanimously by the Dir·ectors or a neditor or· creditors. One Director can file the petition but he has to indicate in the pleadings that the petition is filed on behalf of the other dir·ectors and has to be signed on behalf of the othe1· di,·ectors. He admitted that the second respondent is a Director in the first respondent but in signi11g the petition he did not i11dicate that he was signi11g it on behalf of the first r·espondent. That rende,·ecl the petitio11 to be unfounded, said the learned advocate. So the petition was not well founded. Another deficiency pointed out by the learned advocate is failure by the petitioners to include in the petition a r·epo,t by c1n I11Clependent Person that given the situation in which the company was, it was necessa,·y to apply for an aclrninistration order. That requirement is founded on Rule 34. He said the respondents clicl not comply with Rule 35(2) of the petition. The provisions. of Rule 35 require the petitioner(s) to attach to the petition a Financial Report giving the positlon of the compZlny. He said since the 14 petitioners omitted to include into the petition an Independent Report by an Independent Person on why it was necessary for the petitioners to petition for administ1-ative orders and a financial report giving the position of the company, the petition which was filed by a shareholder and a Director was not well founded.

The lear·ned advocate admitted that section 233 of the Companies /\ct protects the mino1-ity in the company. However, he said it vvas wmng for the learned judge to issue aclministr·ation orders because the purpose of administration orders is to make the company going. /\rguments by the learned advocate in suppoI·t of ground (g) of the application is that afte1· the sale of shares of PME to the second applicant it was vvrnng for the learned judge to make an orcie1· fo1- the sale of those shares to the second respondent. In support of ground ( e) it was contended by the !earned advocate that the order which was made by the trial court requiring the second applica11t to pay fo1· the 65% shares of the DEVOTEL is clisuiminatory and unfairly selective to the second applicant because the ot:he1· shc1n~holcl0rs were not ordered to pay up for the unpaid up shares. Rega1·cling grnuncls (b) and ( c), the learned advocate said the orders were given 1xematu1·ely because the petition was filed after 45 clays of the previous aclministration order which was given on December 2011. The 15 petitioner did not produce evidence of failure of the Recovery Plan which was for five years. Under the circumstances, said the learned advocate, it was too early to condemn the second applicant that it failed to implement the Business Recovery Plan. The learned advocate was of the opinion that the petition

was not brought iri good faith and the or·ders given prior to the filing of the petition should be 1-estored. He prayed that the application be g1·anted and the respondents be condemned to pay costs. Dr. Chitamu in reply to the submission made by the learned advocate for the applicants adopted the affidavit he filed in 1-eply to the application. He said he is the founder of the con1pany a11cl he developed the business co1Kept a11cl he clid all that was necessary to make the company operative. However, when PME pulled out and the company was put under adminislTation, and the second applicant came in as an investor and pLll"Chasecl the share of the PME, she has not paid any money and because of rnalaclrninistration, the company was closed since January 2016. He said there is no other w2.y of reviving the company and he being a creditor and representing a minority shareholder, he had the capacity to file the petition. He prayed that the c1ppliG:1tion be dismissed. 16 . . . - . --- . ---··-.---------- -----. ------·. -.----- :· -.------------- .-- ·--· -------- ·._. _. -.·· - . --~-~---...----· ----~--~---··. -· __ . In a brief rejoinder the learned advocate for the applicants ins·isted that the second respondent did not disclose the capacity in which he was filing the petition. It was not pleaded in the petition that he was suing as a creditor. On the other hand, said Mr.

Matunda, the applicants are Director-s and M2nage1-s of the Con1pany and the second applicant has the means and ;:ipac·11v Ca .... 1...y to rLjP\/Pln11 ..__.v._.,_,,_, ·thP ..._.. cn1,,n::=.r7\/ ......,.11~....,·•J~ --.-1 1e C.:11;:irp Pu1-ch11c::'1•--•·:::., I-le s,:1·1,d t· 1I.._...,.._..,........,, C:P ti.n1- c-Prn:c1nt- 0 ......... ,1._1,._ has all the qualities of a pu1-chase agreement and the one doilar which the second applicant paid was 1-eceived as sufficient consider-ation. He said the agreement was fully negotiated and the Business Plan of the Second applicant was the 011e that was apprnved. To the learned advocate, the histor·y of the forn1ation of the Company has no bea1·ing to the prnceedings. He prayed that the application be allowed with costs. After going thmugh the r·ecord of the revision, namely the pleadings by the pc)rties, the r-uiing of the trial court and the grnunds of revision and the submission by the respective parties involved in the revision we will clcterrni11e the revision as given her·euncler. The revision is brnught under section LJ(3) of the /\ppellate Jurisdiction Act which reads:- "Without prejudice to subsection (2) the Court of Appeal shall have powe0 auLhoriLy andjurisdiction to 17 .:-:?,;.:'. ,_ ... t•-, .·• ;,, call for and examlne the record of any proceedings before the High Court for the piupose of satisfying if-seif as to the

correctness/ fegafitY✓- ! •, or propne,~y 01· any nna1a1g,, oraer - (- or any of.ner C ~- '. r • • I!./: • • ,!. ' " • • CN3Cfs1on rnaae t.YPere1n as ro .:.ne regutarn.y or If C ,.;;"il''fi[/ F!.~(t,~:--l::1t=..\1"fic•~tft'!C ..... ,.,.}" g-o n-F _,, ._,.,..._..,_,..,.,.i,,.;;}l ..·" ..,,...,. {-f--Yl3 _ _ • ,.,.::;l,.,. .... ~ - - • • - I I fL'1=r'1nollrlCi~ f·{f;:--;f; t('.....,t7:l7!!?--fy r/ l t ._.... __ 1,~ added). VVhat the High Court was called upon to do, was to issue appropriate aclmi11istratio11 orders vvhich would enable the company to revive from the rnc.1lacln1inistralio11 and misilnanagernent of funds by the majo1-ity shareholders that resulted into the company failing to do its business prnfitably. The leamecl trial judge observed in her ruling at page 11 of the ruling that:- "In this particular rnatter_, boL/7 parties are agreed LhaL~ current!;~ Lhe cornpany is not perfonnri1g Lo tl1e1i' satisfaction and Lhu_~ there is a need to have an wgent 1ecovery program/ ri7cluding sowoi1g for fri"lances. Both parties agree that there 1~ at Lhis juncture a need to have an ad1mi71strator; who will 18 . . --- - - ... - ' - . - . . .... ··--7·- - . - - - ___ .,.... _ , _ _ as neutral person adn1inister the company during the interirn period untJ1/ a solution is found. // What prompted the minority shareholders to petition for the administ,~ation order is the

financial crisis and mismanagement the company was suffering from. Mr. Matunda challenged the "locus standi " of the respondents to file the petition. The learned trial judge in addressing the issue said at page 7 of the ruling: "In rnany oi-cwnstances/ a rnino!ity shareholder n1ay be affected by a Vi11-ong done/ not to the;n personally but to the co,rnpany by the n1ajonly shareholder. The 1nost linportant protection that a rmi1ority shareholder has,, is the right to petition to the court for an order under section 233(1}(3) (a} (c} (d} 247 and 248 of the Co1npanies Act/ Act No. -12 of 2002. // After bringing into light why the petition was filed let us now proceed to detenT1ine on the complaint of the responclei;;its lacking ''locus standi//to file the petition. In the first paragraph of the petition, it is pleaded that the first respondent is one of the minority shareholders of the company. Paragrciph two shows the status of the second respondent. He is a natural 19 ,. person, founder and chairman and one of the Directors of the company. The capacity of the respondent to file the petition is specifically pleaded at paragraph 18 of the petition thus: " That this state of affairs 1nakes it inevitable for the Petitionets 1i7 the;/ capacity one being a 1nfi7ofity shareholder and a men7ber of the co1npany and the other being a Director and founder of the co1npany. // From what is

ave,·red in the petition, RIPE (T) LIMITED who was the fil·st petitioner, is a minority shareholder and member of the company of (DEVOTEL T.UMITED). Section 233 (1) of the Companies /\ct allows a rr1ernbe1· of the company 01· shareholde,· to petition for adn1inistration orders. The section reads:- "Any 1ne1nber of the cornpany 1nay make an application to the court by petition for an order on the ground that the co1npanies affalis are being conducted or have been conducted 1i7 a 1nanner prejudio~7I to the 1i7terests of its rne1nbers generally or so1ne part of its rnernbe1s... // l<.eading from what is averred in the petition on the status of the respondents when .they filed their petition for administration orders, the 20 ... _ _. ____ , --- -- . - ·-----·- ----------'-- - -· ---~------- ---····· provision of section 233(1) of the Companies Act and the finding of the learned trial judge on_ the capacity of the respondents to file the petition, there is definitely no irregularity either in form or in substance. The ground of complaint that the petition was incompetent for being filed by persons not al!ovved by the law has no merit. For the rest of the complaints, we will deal with them generally. The grouncls for filing the petition are well averred in the petition. The company had had problems which led to the filir1g of a previous petition seeking for administrative 01-ders.

/\n /'s,dministrator was appointed and was given specific tasks. That he did and was discharged. /\fte1· a pe,·iod of 45 days the r·espondents filed the petition which forms the subject matter of the revision. The complaint by the applicants that the petition was filed in bad faith, there was no compliance with the procedure in filing the petition in that there was no independent report to support the petition, no financial report, challenges on the orcler compelling the second applicant to pay for the sha1·es, the order to have the shares sold to the first respondent or be surrenclerecl to the company are all without rnerit. As earlier on said, the parties z:1re in agreement that the cornpany is in critical financial problems. The partles concede that the con,pany is in high debts ancl has failed to pay 21 ·- __ : ____ ··-- -.-- --··.·- its creditors. There 1s also a problem of mismanagement or maladministration and inefficiency because of incompetency of some of the staff. In such a situation there was need to give orders that would benefit all members of the company. That was done by the learned t1·ial judge who hecnd the application. Reading from the provisions of section 4(3) under Nhich the application was filed, v.;e see 110 fault 01· irregularity in the orders 1 1T12c!2 by the learned t1·ial judge. There is nothing for the Court to revise. \/\Je. accordingly dismiss the application with costs. D/\TED at DAR ES S/-l,L/-1.,Ci,M this 15 th day of /\ugust 2016. E.A.l<ILEO S.S.MASSATI JUSTICE OF PtPPE:P.L I certi1y that this is the true copy of the original. ~-- P.W. BAMPil<YA

SENIOR DEPUTY REGISTRAR

COURT OF APPEAL 22