Dr. AbdelGadir Warsama Ghalib
First, I would like to stress the point that it is important for each shareholder, particularly, in joint-stock companies to learn that the company law gives the shareholders certain legal rights and protection against some specific actions by the company or the Board or the management.
The statutory protection is stipulated in the provisions of the company law, wherein it is stated that the ordinary general assembly and the extraordinary general assembly of the company are both not authorized nor allowed to take, add or amend any of the legal rights given to and conferred on the shareholder by the law and or the Articles of Association of the company. This important statutory right has been vested with all shareholders in the company regardless of the fact that they are individuals or institutions, small or big shareholders.
This stand constitutes a healthy environment and should give each shareholder the necessary boost to preserve such rights and to maintain them all through his holder-ship. It would be interesting to mention that many shareholders are either ignorant about this de jure situation or they did not understand that this statutory privilege should be maintained and exercised all through their equity shareholding in the company. This point, for instance, highlights a major difference between the rights of shareholders and the rights of bondholders in the same company.
In certain instances, it has been observed that the general assembly has gone astray in relation to certain rights of shareholders. A good example for this could be the emergence of certain discussions during that specific general assembly and their refusal because they are not included in the agenda as required by the law. This, to my knowledge, happens frequently. However, it should be very clear that decisions or resolutions that are taken in such instances or other similar ones could be considered illegal and void “ab initio” and therefore of no effect..
The statutory rights that are protected by the company law and the Articles of Association of the company are many, such as the right to attend meetings, the right to participate in the discussions, the right to call for meetings due to certain reasons and ultimately, the right to exercise the voting powers during all assemblies, to receive dividends, to examine books and accounts and the like.
At certain times there could be some friction or difference of opinion in relation to certain issues between the Board or Directors and the executive management on one hand and some shareholders (could be majority or minority) on the other hand.
We believe that this is very normal however, those differences shall not affect or jeopardize the statutory rights that are given to the shareholders such as attending the assemblies or receiving dividends at the end of the year or the participation in discussing any issue during assembly meetings… etc..
These types of differences or disagreements happen when the shareholders are active particularly at certain times when the company is planning, for example, a merger or is facing an acquisition or involvement in mega projects … etc. There are many examples wherein extensive debates had been going on in America and Europe between certain shareholders and the management of their companies regarding such important issues.
Some companies, therein, have changed or stopped certain projects after facing severe resistance from the shareholders. We would like to see such hot debates here in our region because we believe that it is high time for local shareholders to be active in exercising the statutory powers conferred on them by law.
Each shareholder in the company and all shareholders collectively shall join forces and stand very firmly to exercise their rights and to get them by all means and at all times. Otherwise, the shareholder-ship will be of no value nor taste, but a piece of paper or a mere social image..
We need to establish appropriate corporate culture & corporate governance, for the interests of the companies and the shareholders therein. Each shareholder shall work for this very vigorously..