Memorandum and Articles of Association

[Tony427]

If a Company interprets its Articles of Association in a manner which severely disadvantages some of its shareholders is it a civil matter or a criminal matter?

Whats happening re some shares my colleagues and I owne is so close to fraud that I think it must be a criminal matter. ( Forced sale of shareholding back the company at a nominal share value rather than a true value)

Should I go to the police and would they be interested?

Cheers,

Tony

[Mattt]

I'm no expert, but i'd say it would be a civil matter.

[Size Nine Elm]

Usually if the Memorandum/Articles include compulsory sale of shares there is a clause where if the share price offered is rejected there is an external valuation of the shares. I'd check carefully if such a clause is there, and if so what the valuation process is.

[Tony427]

We've requested an external independent valuation, as is stated should happen in the memorandum/ articles, but company has refused and has instead sent us a cheque for 0.0004% of the true value of the shares!! Needless to say we wont be cashing the cheques.

Incidentally the Company Secretary who is also the Financial Director and Chartered Accountant has hugely misrepresented the value of the company ( in writing) in a bid to reduce the value of the shares he wants to purchase. Isn't this a bit naughty?

Cheers,

Tony

[Lurking Lawyer]

Definitely a civil matter.

There's provision in s459 Companies Act for minority shareholders to bring a claim against the company if they are being unfairly prejudiced by the way the company is being run. Googling "unfair prejudice" +"minority shareholders" should give you some background on what it says and how it works.

s459 proceedings are long and expensive however - it's only worthwhile seriously considering if your shares are worth a bit.

I think you need to seek some legal advice on what courses of action are open to you. The company may belt up and stop trying to extract the urine if a stroppy solicitors letter hits their desk threatening expensive court proceedings......

Feel free to e-mail me though my profile if you have any further queries.