Case law : unfair prejudice ruling

Abstract

This case is one of the very first cases to deal with the new remedy introduced by s 402 of the Companies Act 1995. This provision authorises the Court to intervene in a number of ways - where it considers it just and equitable to do so - in order to protect shareholders against acts of a company which are oppressive, unfairly prejudicial or unfairly discriminatory to a member or members. The case concerned one of Malta's larger banks, whose shares are listed on the Malta Stock Exchange. The Government of Malta held or controlled approximately 70% of the shares. Early in 1999, the Government started negotiating with a leading foreign bank for the sale of its entire shareholding in the local bank. The Council of the Stock Exchange ordered the indefinite suspension of trading in the company's shares pending the finalisation of the negotiations and the conclusion of a due diligence exercise aimed at establishing a fair transfer price.