Breach Of Shareholders Agreement South Africa
African Bank Limited ("Bank") is a wholly-traded subsidiary of African Bank Investments Limited ("ABIL" listed in JSE). From April 2013 to August 2014, ABIL`s share price fell by ZARje$28.15 per share to ZAR1 per share, resulting in significant losses to shareholders. 2. Do you know the law - Companies Act 71 of 2008 defines exactly the powers and limits of shareholders and directors. The Companies Act contains, among other things, information on general meetings of shareholders, proxy votes or decisions. Law enforcement ensures respect, knowledge of rights and duties and contributes to the prevention and resolution of disputes. 2. Minority shareholder and majority shareholder prospects - minority shareholders seek refuge in quorums to begin with meetings, vote and make decisions at meetings and the right to appoint directors to the board of directors. This will ensure full and autonomous representation of shareholders and reduce the tactics of aggression or harassment of majority shareholders. In addition, minorities seek protection in the sale of shares on the basis of the tag-along principle - if a majority is sold, the minority has the right to join the agreement. It is important to note that there are other provisions of the law that may apply to aggrieved shareholders. These scenarios are summarized as follows: Examples of possible scenarios may be breach of various obligations, a lack of support or a different view of the company`s strategy and management, a disagreement with dividend policy, disparities between wages, separate business interests, lack of financial, accounting and legal information, exclusion from meetings and violations of shareholder agreements.
4. The document contains all the conditions and rules of the undertaking - the documentation includes the execution of valid and legitimate agreements such as a simple incorporation protocol (MOI) (compulsory), the shareholders` pact (optional, but recommended), management contracts or letter and the terms of appointment as director or letter of intent. Each of these agreements will define the precise rules for confronting with clear boundaries, what is permissible and what is not, and, more importantly, how to resolve disputes as an alternative to rapprochement with the courts. 1. Capital contribution - Make it clear how much each shareholder has contributed, whether the capital is used as a equity loan or as a shareholder loan, and what the terms of repayment, if any, are. It is also necessary to determine how future shareholder loans will be applied and repaid, as well as all future shareholder and third party engagement agreements.