A panel of three judges of the Court of Appeal last week delivered a devastating blow to Masego Mogwera’s continued stay in the Babereki Investments (BI) as Chairperson of the Board of Directors.
The unanimous decision of the court in the civil challenge featuring BI, alongside Masego Mogwera, Thabologo Galekhutlhe and Martin Gabobake against an earlier high court judgment of Justice Dube in the matter between the aforesaid litigants and BOPEU et al, has put paid to all concerted previous efforts to frustrate the AGM by the former.
Led by CoA President Justice Ian Kirby accompanied by the duo of Justices Isaac Letsididi and and Lakhvinder Singh Walia, the Court found that BOPEU is indeed the sole shareholder with 100% shareholding of Babereki Investments (Pty) Ltd. The Court is also in agreement that for the longest time, BI has been found to be guilty of non-compliance with the dictates of the Regulator, NBFIRA, leading to an effective charge and penalty fees for the continued lapse to date. An AGM for the shreholders has not been held in a long time, thus in violation of both the BI constitution and the Companies Act.
The CoA further lamented the lack of any corrective action on the findings and recommendations from the attendant Forensic Audit Report. The said report, the court has established, has also not been disclosed to the general membership of BOPEU. This being the case, the Court directed for prompt action on the forensic audit report forthwith. The Court is in agreement with Counsel for the Respondents, Kgotso Botlhole, that Section 41 of the Act provides for inclusion of any clause in the company constitution as is the case with the BI constitution in its provision of the round robin resolution.
That said, contrary to the position assumed by Counsel for the Applicant, Adv. Sidney Pilane, the round robin in itself is lawful, and thus permissible. Clearly, BOPEU had accurately invoked section 107 in founding its round robin resolution, as an available alternative method of fulfilling the requirements for the holding of a Shareholders’ meeting in lieu of the section 105 proviso.
The only gripe that the Court had with the round robin in this instance is that in terms of clause 19 of the constitution, “all members” entitled to attend the AGM ought to have been fully involved in the crafting of the round robin resolution. It is apparent that the BI Board had not participated, nor duly invited in arriving at the disputed resolution.
When dismissing the appeal, the highest court in the land also ordered for the holding of the long stalled June 2019 AGM by the 25th April 2021.
The court directed the BI Board to notice and call the meeting, adding that, it shall be the prerogative of BOPEU to determine the rightful attendees in the form of the members to be drawn from the NOB, NEC and the Board of Trustees. In this sense, the correct person identified by BOPEU in this regard shall have their particulars communicated to the BI Board by next week to facilitate the convening of the urgent AGM.
Further, it is in the realm of BOPEU to make a determination as to what shareholder resolutions BOPEU wishes to have included in the day’s agenda.