Don't Trample On Minority Shareholders (Unless You Have Deep Pockets)

The case of Kohli v Lit and others serves as a recent reminder that directors must consider how their decisions may affect the interests of minority shareholders. 

Ms Kohli was a minority shareholder in Sunrise Radio Limited.  She asked the court for an order requiring the directors (who owned the majority of the shares in the company) to buy out her minority shareholding, alleging that their conduct:

• in issuing new shares at nominal value;
• in failing to disclose their remuneration in the company's accounts;
• in preparing and filing the company's accounts and other returns late; and
• in failing to obtain shareholder approval for the sale of a property belonging to the company to one of its directors