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Tanzania decisions
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The High Court held that Chen Kai’s removal as director and secretary of Salina Drinks Company Ltd was irregular and unfairly prejudicial, and ordered reinstatement.
The 1st respondent's exclusion of the petitioners from management, failure to convene meetings, lack of transparency, and unilateral dealings with company assets constituted unfair prejudice to the petitioners' interests as minority shareholders under section 233 of the Companies Act. The petitioners proved their case on the balance of probabilities.
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The High Court granted a temporary injunction in part, restraining disposal of company assets and interference with the status quo pending an unfair prejudice petition.
The respondent failed to advance sufficient and tangible grounds to justify recusal; allegations of bias are trivial, unsupported, and do not meet the legal test for judicial disqualification. Recusal would encourage forum shopping and undermine judicial function.
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The High Court found the respondent’s affairs were unfairly prejudicial to a minority shareholder and ordered access to company records, but refused damages and other broader relief.
The 1st respondent, having been fully represented as director and having conceded to the 2nd respondent's representation in court, cannot later object to the representation as it constitutes an afterthought. The complaint lacks merit and is dismissed.
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The High Court overruled a preliminary objection in a company petition for unfair prejudice, holding that locus standi and limitation issues required evidence.
The petitioner is the lawful owner of 4,512 fully paid-up shares in the 1st respondent company, the removal as director was not done in accordance with the law and proper procedure, and the respondents' actions were unfairly prejudicial. Reliefs sought for appointment as chairman/managing director, co-signatory rights, audit, dividends, commissions, and injunctions were declined as they are matters for the company or lacked evidentiary basis. The cross-petition lacked merit as the evidence supports the petitioner's shareholding and no proof was provided for the respondents' claims.
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Declaration of Trust is illegal, null and void as it contravenes Articles of Association, Tanzanian company and land laws, and was executed in conflict of interest; all changes in company structure based on Declaration of Trust are irregular and must be expunged; company secretary breached trust and must convene meetings; Petitioners entitled to reliefs sought.
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The respondents' conduct in managing the affairs of the 2nd respondent company, including failure to hold meetings, unauthorized appointment of directors and secretary, and acts done without board resolutions, was in contravention of the company's MEMART and the Companies Act, and was unfairly prejudicial to the petitioners. There was no evidence of proper procedure for forfeiture or transfer of shares, nor evidence of a call on shares. The petitioners' membership could not be lawfully stripped, and the respondents' actions amounted to unfair prejudice.
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