IN THE MATTER OF COMPANIES ACT AND IN THE MATTER OF PETITION FOR ADMINSTRATION ORDER BY THE CO

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION)

AT PAR ES SALAAM MISC. COMMERCIAL APPLICATION/ CAUSE NO. 150 OF 2015

IN THE MATTER OF THE COMPANIES ACT (CAP 212 R: E 2002)

AND

IN THE MATTER OF A PETITION FOR ADMINISTRATION

ORDER BY THE COMPANY MGT CARDS LIMTED...................................... PETITIONER

RULING Mansoor, J: Date of Ruling- 24 t h JULY 2015 1 This is an application made under Section 247 (1) (b), (2), (3) (a) and ( c); and Section 248 (1) of the Companies Act, Cap 212 R:E 2002 for appointing an administrator to conduct the affairs of a private limited company, MGT Cards Limited, along with its managing director for the duration of unspecified period. MGT Cards Limited, was incorporated on 26th March 2012 under the Companies Act, Cap 212 R: E 2002, and a Certificate of Incorporation No. 90219 was issued by the Registrar of the Companies. The nominal capital of the company as per the Annual Return (Form No. 128) filed with BRELA on 26th January 2015 is THz. 300, 000, 000 divided into 10, 000 ordinary shares of THz. 300,000 each, all of these shares have been issued and are fully paid up. PEM Limited owns 5000 shares and MGT (IMPZ) of Dubai owns 5,000 shares as well. The company, was running a business of designing, printing and manufacturing of all types of telecommunication sim cards, bank electronic and non-electronic cards, identity cards, and all types of smart cards, and security labels. Mr. Al Sean Merali was the secretary of the company as shown in the Annual Return, and the directors are Daniel Noni, Farouk Merali, al Sean Merali and Farhad Merali. Mr. Farhad Merali filed an affidavit in support of an application No. 150 of 2015 for the appointment of Ms.

Sara Mhamilawa as the Administrator and that the Company be placed under her administration. Substantially two grounds were alleged in support of the petition; The first was that the company was unable to pay its debts in that it had not discharged a liability of US$ 424,724.99 due to Commercial Bank of Africa (Tanzania) Limited in spite of demands. The Applicant attached the demands made on behalf of the Bank by Hallmark Attorneys on 6th August 2014 and 12th August 2014, and 17th October 2014. The second was that it was just and equitable that the company should be put into an administration order to avoid the petitioning of a wound up order by the creditors; the Petitioner also argued that the reason for the petition is also being that there was a deadlock in the current management of the Company. The Petitioner also filed a Board Resolution stating that the Board of Directors’ meeting of the company had been convened and resolved that the company was sustaining loss and it should be placed under the Administrator to enable it to run profitably. The Petitioner submitted that the losses incurred by the Companies in the past years were incidental to the business and that if the business were allowed to continue it would be possible not merely to discharge the liabilities of the business but to earn profits in future. There was no controversy put forward before the Court by the

Registrar of Companies or the shareholders or the management of the Company as to the capacity of the company to rehabilitate itself once the Company is put under the Administration of Ms. Sarah Mhamilawa as proposed by the Company. The company owns a valuable machineries with facilities for printing and manufacturing the cards as exhibited by the Applicant during the hearing of this Petition, and thus I am of the view that, an administrator should be appointed to carry on the business as shown in the object clauses of the Articles of Association of the Company filed in Court, and also as shown in the Proposed Administrator’s Report filed in this Court along with the Petition and I accordingly appoint Ms Sarah Mhamilawa for the purpose i.e. to carry on the affairs of the company, along with the current managing director of the company. I find it that it is not just and equitable to wind up the company and the Sections of the Companies Act cited by the Petitioner in its application enable a Court to intervene at the instance of the shareholders and the directors of the Company in the matter of the administration of the company under certain circumstances: One important circumstance is that the court should be satisfied on the facts deposed in the affidavit as well as in the Administrator Report. I therefore found that a case for passing an administration order has been made out.

From the facts of this petition as made out by the Petitioner, this court is of the opinion that the company 4 should be salvaged, and therefore passes an order under Section 147 and 148 of the Companies Act. The Petitioner had properly invoked the jurisdiction of this court for intervening in the internal management of the company by an appropriate application under Ss. 147 and 148 of the Companies Act. The order of this Court in the instant Petition appointing the administrator i.e. Ms. Sarah Mhamilawa is for the duration of two years from the date of this Order. The Petition is therefore allowed on the terms and condition prescribed herein above. No costs is provided. DATED at DAR ES SALAAM this 24™ day of JULY, 2015 5