2012
SUPREME COURT
GHANA
CORAM
AI Generated Summary
The Supreme Court of Ghana, per Dotse JSC (with Adinyira JSC, Owusu JSC, Yeboah JSC, and Baffoe‑Bonnie JSC concurring), allowed PS Investments Limited’s appeal in its shareholder dispute with Twifo Oil Palm Plantations Limited (TOPP), Central Regional Development Corporation (CEREDEC), Unilever Ghana Limited, the Divestiture Implementation Committee (DIC), and others. The Court held that TOPP’s Regulation 32(a) established enforceable pre‑emptive rights; Exhibit 7 was merely an invitation to treat, so no valid offer of shares was made to existing shareholders, and Unilever’s acquisition violated the regulation. Act 179 empowers members to enforce regulatory and fiduciary breaches, significantly limiting the Foss v Harbottle rule; PS Investments had capacity. The Court rejected the claimed waiver via Exhibit 5, found directors acted in bad faith and breached duties, declared the sale and share certificate void, enjoined Unilever from holding itself out as a shareholder, affirmed DIC’s capacity as agent, and directed that shares be first offered to existing shareholders under Regulation 32(a).
J U D G M E N T
DOTSE JSC:
In view of the peculiar facts and circumstances of this appeal, we deem it expedient to state in some detail, the facts of the case as we deem it relevant and applicable to the issues germane to the resolution of the appeal herein.
The Plaintiff/Appellant/Appellant, hereafter referred to as Plaintiff is a shareholder in Twifo Oil Palm Plantation Limited (TOPP) a company incorporated under the laws of Ghana and engaged in the cultivation of oil palm at the TOPP who are themselves the 14th Defendants/Respondents/Respondents and together with the other Defendants are hereafter referred to simply as 1st – 14th Defendants as appearing above.
In order to understand the dynamics of the shareholding structure of the 14th Defendant, it is proper to set out in detail the said shareholding structure as provided in the record:
i. Central Regional Development Corporation - 80.46%
(CEREDEC) – (1st Defendant)
ii. State Insurance Company (SIC) - 2.21%
iii. Paterson Zochonis PLC - 1.47%
iv. National Investment Bank - 0.33%
v. PS Investments Limited - 15.53%
vi. Mobil Oil Ghana Limited - 0.33%
The fifth, seventh, eighth, ninth, tenth, eleventh and twelfth defendants were at all material times directors of TOPP. The thirteenth defendant reputedly held himself out as a director.
It is to be noted that the shareholders of TOPP are required by the Regulations of TOPP to appoint directors to represent their interest on the board.
At various times, Unilever Ghana Limited (Unilever), the second defendants herein showed interest in the acquisition of shares in TOPP. Unilever discussed the possibility of acquiring the shares of Paterson Simons & Co (African) Ltd. the predecessor of the plaintiff but no deal was concluded. Unilever also attempted to acquire the shares of SIC without success. When Unilever again failed to acquire the shares of Mobil Oil Ghana Limited (Mobil), through its subsidiary GBO Invesments Ghana Limited (GBO) because the Board considered Mobil’s offer contrary to Regulation 32 (a) of the Regulations of TOPP, an action was brought by GBO in the High Court, Accra against TOPP and Mobil.
Whilst GBO’s action against TOPP and Mobil was still pending, the Chairman of the Board of Directors (Board) of TOPP instructed the Company Secretary of TOPP to write to the shareholders of TOPP about the “Government of Ghana shares” in TOPP. The Board Secretary wrote exhibit ‘7’ dated 29/10/1997 to individual directors of TOPP representin