Rsv Shareholder's Action Group

There are always problems in UK Property Law about the period between contract and delivery/completion/settlement. For practical reasons the seller retains an interest in the property after he has sold it and it is possible for him to take actions to the detriment of the buyer either deliberately or otherwise.
The buyers right of redress is almost always through the courts but it is no defence for the seller to say that everything he did was done in accordance with regulations UNLESS the regulations compelled him to do what he did.

It is absolutely clear that if Company articles stipulate that the only eligible voters are those on the registrars list then thats the end of that matter. However to me it does not follow that the result of a vote taken in compliance with this rule is ipso facto unassailable.

To illustrate by extreme example if I as a major or majority shareholder were to sell my holding completely immediately before an EGM I could then vote decisively at the EGM in a manner damaging to the company and remaining holders including those to whom I had just sold my shares. I do not think the courts would uphold an argument that there was no case against me simply because the decisions had been taken by a vote in accordance with the rules and something would be seriously wrong if that was the legal view.

As regards the particular case,

According to the information circulated (which may or may not be generally accepted or even correct) the meeting was faced by a number of persons who presented acceptable legal proof that they were the contracted owners of a sizeable, electorally significant portion of the total Issued Capital. Albeit these transactions may have been unsettled.

It seems to me that there are only two possible conclusions which could and should have been drawn from this by those conducting the meeting. Either

(a) There had been improper behaviour or mismanagement in the issuance and sale of shares in the company on a very large scale which calls into question everything including the correctness of the registrars list.

AND OR

(b) A correspondingly significant number of shares must recently have been sold by members still on the registrars list and entitled to vote but who had sold their legal interest in the shares.

There may be no way that the meeting could have allowed persons not on the registrars list to vote if thats what the articles say but equally it was not mandatory to take a vote at all.

In my personal view the vote should have been suspended pending clarification of (a) and (b) but as it wasn't

Holders are perfectly entitled in these circumstances to challenge the company on the grounds that the vote was inappropriate in the light of (a) and (b) and its consequences were damaging to their interests to an extent they may be able to establish.