KUMASI - A.D 2015

SUIT NO:  MISC/05/15

On 20/11/2014, the Applicant herein filed an application under sections 218,210,220 and 239 of the

Companies Act, 1963 (Act 179) seeking the following reliefs:

1. A declaration that the 3rd Respondent has conducted the affairs of the 1st and 2nd Respondents in a manner that is illegal, oppressive of, unfairly prejudicial to and discriminatory against the Applicant in her capacity as a shareholder and director of the 1st and 2nd Respondents;

2. An order of perpetual injunction restraining the Respondents from making further illegal, oppressive, unfair prejudice and discriminatory act;

3. An order of injunction restraining the 3rd Respondent by himself or his servant or agent or otherwise howsoever from running the business;

4. An order for the appointment of Receiver and Manager to manage the 1st and 2nd Respondent Companies and their properties;

5. An order for the appointment of an inspector to investigate Respondent Companies from 1st January, 2001 to date of appointment of the Receiver and Manager;

6. Further or other orders as this court may deem fit.



The Applicant and the 3rd Respondent who used to be husband and wife but now divorcees, are the only shareholders and Directors of the 2nd and 3rd Respondent Companies which were formed in the course of their marriage. Whereas the Applicant is a minority shareholder with 30% and 20% shares, the 3rd Respondent is the majority shareholder with 70% and 80% shares respectively. It is instructive to note that the Applicant is contesting the shareholding structure in a separate suit which she says is pending before the Court of Appeal.


From the motion paper, the court has been invited to consider the instant application under sections 218,210,220 and 239 of the Companies Act, 1963 Act 179. First, i will consider the application under section 218.


It is provided under section 218 of the Companies Act 1963 Act 179 as follows:

(1)  A member or debenture holder of a company or, in a case falling within section 225, the Registrar, may apply to the Court for an order under this section on the ground

(a) that the affairs of the company are being conducted or the powers of the directors are being exercised in a manner oppressive to one or more of the members or debenture    holders or in disregard of the proper interests of those         members, shareholders, officers, or debenture holders of the company, or

(b) that some act of the company has been done or is threatened or that a resolution of the members, debenture holders or aclass of them has been passed or is proposed which unfairly discriminates against, or is otherwise unfairly prejudicial to,         one or more of the members or debenture holders.


The word 'oppressive' in section 218(1) of Act 179 is not a term of art. In Re H.R. Harmer Ltd (1958) 3 All ER 689 at page 690, the appellate court held that the word must be construed in its ordinary sense and it means , "burdensome, harsh and wrongful". See also Dupaul Wood Treatment Co. Ltd v Asare (2007) 13 MLRG 1 SC.


Who can bring an application under section 218? In Aboagye v Tetevi (1976) 1 GLR 217, Edusei J rightly ruled that a member could bring an application under section 218 where the alleged oppressive conduct affected him in his capacity as a member or officer of the company. However a single act of oppression, as the authorities suggest, will not suffice. Thus, in Pinamang v Abrokwah (1991) 2 GLR 384 at 388, Lamptey JA quoted with approval the statement by Osei Hwere JA ( as he then was) in West Coast Dyeing Industry Ltd, In re; Adams v. Tandoh, Court of Appeal, 7 March 1985; digested in [1984-86] G.L.R.D 131 as follows:


“The petitioner has to show that the affairs of the company are being conducted in a manner oppressive to some part of the members (including himself). This has been interpreted as meaning that there must have been a course of oppressive conduct and one isolated act, even if oppressive will not suffice ... Further, a series of oppressive acts will not be sufficient unless they constitute a chain of events which continue right up to the presentation of the petition.”


In the Pinamang case referred to supra, Lamptey JA made reference to two English cases which will be useful to the application before me. The first case is Re Bellador Silk Ltd [1965] 1 All E.R. 667 where Plowman J. in dealing with an application under section 210 of the English Act stated the position at 672 as follows:


"A petition which is launched not with the genuine object of obtaining the relief claimed, but with the object of exerting pressure in order to achieve a collateral purpose is, in my judgment, an abuse of the process of the court, and it is primarily on that ground that I would dismiss the petition."


The second case is Re Five Minute Car Wash Service Ltd. [1966] 1 All E.R. 242. At page 246 of the report Buckley J. expressed his view in the manner below:


“First the matters complained of must affect the person or persons alleged to have been oppressed in his or their character as a member or members of the company. Harsh or unfair treatment of the petitioner in some other capacity, as for instance a director or a creditor of the company, or as a person doing business or having dealings with the company, or in relation to his personal affairs apart from the company, cannot entitle him to any relief under section 210.”


From the foregoing, an applicant must bring himself as well as his complaint within the ambit of section 218 in order to get a remedy there under but not for the purpose of compelling the Company to yield to the applicant's demands unrelated to oppressive acts within the meaning of the law.


Having firmly stated the position of the law, i will proceed to set out the respective cases of the parties and determine whether or not a case under section 218 has been established.



The applicant's case is contained in a 24 paragraphed supporting affidavit filed on 20/11/2014 ; two supplementary affidavits filed on 19/12/2014 and 22/01/2015 in respect of which she gave oral evidence in court. Numerous documents were exhibited to these affidavits and a bunch of other documents were also tendered whilst the Applicant was in the witness box. Other documents were also tendered through the 3rd Respondent. In sum, her case is that she was married to the 3rd Respondent for 33 years and in the course of their marriage, they formed the 1st and 2nd Respondent Companies of which they are the only shareholders and directors. Whereas the 3rd Respondent allocated to himself 70% and 80% shares in the 1st and 2nd Respondent Companies, he fraudulently allocated 30% and 20% shares to the Applicant. Since the year 2001, the Companies have failed to render any accounts to her or provide copies of any such accounts to her. The 3rd Respondent has been taking all decisions without reference to the Applicant in her capacity as a director and does not involve her in the running and operations of these businesses. As such, there has been no transparency or accountability in the management of the Companies. From the year 2001, the Respondents have failed to pay any money to the Applicant as Executive Director and also as a shareholder. At the same time, the 3rd Respondent has been drawing monies from the said companies for his benefits and the benefit of his new wife and her children. He has also used the Companies money to establish a hair dressing salon for the said wife and refurbished her family house at Buokrom Estate, Kumasi. That aside, the 3rd Respondent has siphoned monies from the companies to his personal account in Standard Chartered Bank, N.I.B. and other banks unknown to the Applicant. Besides, the 3rd Respondent has refused to hold meetings and Annual General Meetings of the Companies and has even threatened to kill the Applicant if she dare enter the premises of these companies. In 2006, the Applicant said she applied for the affairs of the Company to be investigated and for the appointment of Receiver /Manager but the same was dismissed. Instead, the Court appointed auditors to go into accounts of the Companies. However, the 3rd Respondent refused to co-operate with the auditors and thus made it impossible for them to do the work assigned to them by the court. Hence, the present need for appointment of Receiver/Manager and for the affairs of the Companies to be investigated. She exhibited the ruling of the High Court dated 16/08/2006 as exhibit "VM 4". Explaining further ,the Applicant said, she was the bread winner of the family since the commencement of these businesses. She also indicated that she put in her salary as a nurse at Komfo Anokye Teaching Hospital, income from her trading activities as well as income received from abroad where she worked during her leave period into these businesses. Thus, she contributed financially to the setting up of these businesses. Further in her evidence, she told the court that she and the 3rd Respondent were receiving salaries from the 1st Respondent but the 1st Respondent stopped paying her salaries when she travelled to the USA in the year 2001. According to the Applicant, monies from the 1st Respondent were used to set up the 3rd Respondent. From 2001 to date, the Applicant said she expected to be paid some monies but the 3rd Respondent has refused to pay her. Moreover, she has never been paid any dividend.



The Respondents case is that it was the 3rd Respondent who solely promoted and incorporated the 1st and 2nd Respondent Companies with his own resources in 1989 and 1999 respectively. The 3rd Respondent did not dispute that the Applicant owns 30% and 20% shares in the 1st and 2nd Respondent Companies respectively but denied that the shares should have been divided equally between the Applicant and himself. However, he stressed that these shares were allotted to the Applicant out of his own free will and not because of her financial contribution to the setting up and operations of these Companies. He also denied that proceeds from the 1st Respondent Company were used to set up the 2nd Respondent Company. As regards the Applicant's status in the company, the 3rd Respondent said the Applicant is a nominal director and has never been part of the management of these Companies. Reacting to the Applicant's evidence on being refused access to the premises of these Companies, the 3rd Respondent stated that it was rather the Applicant who hired thugs to lock up the Companies in issue. In respect of the Financial status of the Companies, the 3rd Respondent's position is that these companies have never declared dividends and the 2nd Respondent Company barely breaks even. In cross-examination, he admitted that the 2nd Respondent Company does not have a bank account and all transactions are done by cash. These notwithstanding, the 3rd Respondent was emphatic that the 1st Respondent Company has been submitting their accounts to the Internal Revenue every year through its accountants. As regards the audit ordered by Apau J. ( as he then was) in the year 2006, he told the Court that the auditors had completed their job. He also denied that the Applicant has ever been a worker at these companies and that she has never been paid salaries by the said Companies.



Having critically looked at all the evidence on record, i must say that the 3rd Respondent has demonstrated clearly that he is not a credible person. First, his evidence that the auditors had long completed their job contradicts the Applicant's exhibits VM 5 and VM 10 dated 23/11/2006 and 10/07/2013 respectively. These documents show that the 3rd Respondent has unreasonably withheld documents needed for the audit to be conducted. In my opinion, these documents could not have been "cooked up" by the Applicant to enable the auditors do their work. Contrary to his assertion that the Applicant has never been an employee of the 1st and 2nd Respondent Companies, records from the Social Security and National Insurance Trust, exhibits F and K, point to the fact that SSNIT contributions were made by the 1st Respondent Company on behalf of the Applicant up to the year 2005. SSNIT contributions in respect of a worker is a percentage of the salary earned by that worker plus the statutory percentage to be added by the employer. From the documentary evidence before me, SSNIT contributions were made by the Applicant and 1st Respondent Company up to the year 2005. How could this be if the Applicant has never worked for Benny Vee Chemist Ltd ? Again, that exposes the 3rd Respondent as a person whose evidence is not to be believed. Per exhibits 7, 8 and 9, there is an indication that the 1st Respondent Company had Financial difficulties sometime between the years 2002 and 2003. Yet, it is obvious from the Applicant's exhibits B, C and D that Benny Vee Chemist Ltd made profits along the line, particularly in 2006 and as recent as 2011 and 2012. In the absence of any resolution to recapitalize, dividends ought to have been declared but the 3rd respondent has created the wrong impression that these Companies have not been profitable. These Financial statements were never brought to the attention of the Applicant who remains a director of that Company. The 3rd Respondent has also failed to account for these profits to the Applicant. It is also strange that a registered hospitality business like the 2nd Respondent does not have a bank Account. How then can the income and outgoings be checked? Granted that it started operations at a time when the Applicant was outside the jurisdiction, a bank account could still have been opened with her authorization. Her alleged absence cannot be a reason for the 2nd Respondent not maintaining a bank Account so as to ensure transparency in its operations. It is crystal clear from the evidence on record that the 3rd Respondent who holds majority shares in the Companies in issue and has absolute control over them has discriminated against the Applicant who is a minority shareholder and Director. From the foregoing, I can confidently say that the 3rd Respondent has failed the test of credibility within the meaning of section 80 of the Evidence Act, 1975 N.R.C.D. 323. I will therefore look at his testimony before this court with great suspicion!


The parties through their affidavit evidence and oral evidence in court did introduce substantial evidence as regards financial contributions to the establishment and operations of the Companies in issue. I do not see the relevance of such details at this time. What is of the essence here is whether the applicant, as a director and shareholder of these companies, has been fairly treated. Even if she did not contribute a pesewa to the assets of these companies, once her name appears on the Incorporation documents as a shareholder , she remains as such. Indeed, in the case of Adehyeman Gardens Ltd v Assibey (2003-2004) SCGLR 1016 at page 1025, Sophia Akuffo JSC had this to say:


“The membership of a subscriber is by legal prescription and, in the absence of a valid forfeiture, is not predicated on full or partial payment of the consideration for the shares taken. Indeed, even in the case of a non-subscribing member of a company, his membership is not dependent on whether or not he is fully paid-up.”


The above precedent goes to buttress the point that it does not matter who contributed what to the setting up and operations of the 1st and 2nd Respondent Companies. Thus, if one puts in all his life savings but holds only 0.01% of the issued shares for example, that will be the extent of his interest in the eyes of the law. So in the instant case, the guiding factors will be the share structure and directorship as in the incorporation documents but not what each party directly or indirectly put in. Likewise, the personal life style and affairs of the parties are not matters which the court will look into in determining oppressive conduct.


I must be quick to point out that being a shareholder entitles one to the payment of dividends as and when declared by the Company. Non-payment of dividend alone is not a ground for bringing an action under section 218 See Dupaul Wood Treatment v Nicolas Bernard Asare (2007) 13 MLRG 1 SC.


The Applicant also insists on being paid "expected salary in arrears" and that she was even underpaid for the period she received salaries. In my opinion, workers salary issues are not covered by section


Provision has been made therein for members, debenture holders or the registrar of companies. It is not a blanket provision by which any worker who is aggrieved can come to court to seek redress. This can be distinguished from her claim based on non-payment of Director's fees. As an employee, if the applicant has any issues over under-payment or non-payment of salaries, she should fight that at the appropriate forum using the right procedure but certainly not under section 218 of Act 179. That reminds me of the statement of Plowman J (referred to supra) that:


"A petition which is launched not with the genuine object of obtaining the relief claimed, but with the object of exerting pressure in order to achieve a collateral purpose is, in my judgment, an abuse of the process of the court, and it is primarily on that ground that I would dismiss the petition."


Having considered the totality of the evidence on record in the light of the submissions filed by both counsel, the following findings of fact can be made: the Applicant is a minority shareholder and director of the 1st and 2nd Respondent Companies and until the Court of Appeal determines otherwise, her shares in these companies cannot be altered; the Applicant and the 3rd Respondent contributed financially and in kind towards the establishment and operation of these companies; the 3rd Respondent has not been transparent as regards his handling of the finances of these companies and has by his conduct prevented the Applicant from taking part in the affairs of these businesses, especially, the 2nd Respondent Company; even though the Applicant has not been removed as a director, she has been kept in total darkness as regards the financial situation of the companies; the

Applicant and the 3rd Respondent have acted contrary to provisions of the Companies Act by not filing Annual Returns, convening Directors Meetings and , Annual General Meetings; the 3rd Respondent has teamed up with the 1st Respondent and they have refused to declare dividends even though the company is doing good business and making profits as per the 1st Respondent's Financial Statements since the year 2006; the 2nd Respondent has teamed up with the 3rd Respondent and have failed to keep proper records in respect of the operations of the 2nd Respondent to the detriment of the Applicant; and the Applicant ceased to be an employee from the year ending 2005.


With these findings of fact, I conclude that the 3rd Respondent is in total control of the 1st and 2nd Respondent Companies and has unfairly discriminated against the Applicant who is the only member of these companies apart from him. The 3rd Respondent's acts are also prejudicial to the interest of the Applicant. It is therefore my considered opinion that on the balance of probabilities, the Applicant has established a case of oppressive conduct against the Respondents under section 218 of Act 179. What then are the remedies available to the Applicant?


The remedies for oppression are contained in section 218 (2) of Act 179 as follows:

(2) Where on the application the Court is of opinion that either of the grounds set out in subsection (1) is established, the Court may, with a view to bringing to an end or remedying the matters complained of, make an appropriate order and, without prejudice to the generality of this subsection, the Court may by order,

(a) direct or prohibit an act or cancel or vary a transaction or resolution; or

(b) regulate the conduct of the company’s affairs in future; or

(c) provide for the purchase of the shares or debentures of any members or debenture holders of the company by other members or debenture holders of the company or by the company itself and in the case of purchase of shares by the company without regard to the limitations imposed by sections 59 to 63 other than subsections, (5) and (6) of section 59.


In the instant case, I am mindful of the fact that the Applicant is allegedly challenging the share structure at the Court of Appeal. I have also taken notice of the 3rd Respondent's disobedience to the orders made by Apau J. (as he then was) on 16/08/2006 ( exhibit VM 4). By that order, the court appointed an independent auditor to go into accounts of the two companies pending the determination of the interest of the respondent in those companies. In respect of that Asamoah Bonsu


Co were appointed as auditors. The two parties were to assist the auditors in the discharge of their duties but the evidence before me shows that the 3rd Respondent frustrated the efforts of the auditors by refusing to make available the relevant books. If the 3rd Respondent who had access to and controlled the relevant documents and accounts had been honest and co-operated with the auditing firm appointed by the court in 2006, perhaps the parties would have sorted out their differences long before the instant application. In order to bring finality to these recurring matters the following orders are hereby made:


Since Asamoah Bonsu & Co are familiar with the history of this case, they are re-appointed to conduct a complete financial audit of Benny Vee Chemist Ltd and Benny Vee Lodge Ltd forthwith.


The auditors shall pay particular attention to the income and expenditure pattern as well as the profits and trace monies diverted from the companies' accounts.


The auditors shall furnish the court and the parties with their report within 60 days from the date of payment of their professional and related fees by the two directors i.e. Veronica Anin-Mensah & Benjamin Anin Mensah; and the submission of the relevant documents & books to them. The


Applicant and the 3rd Respondent shall pay 30% and the 70% of the auditors fees respectively.


The 3rd Respondent is given a period of 14 days from the date of this judgment to furnish the auditors with the following information (where applicable) pertaining to Benny Vee Chemist Ltd and Benny Vee Lodge Ltd and any other information required by the auditors failing which the Companies shall be locked up until the orders are fully complied with:

a) Purchase day books

b) Purchases invoices

c) Stock records

d) Sales invoices

e) Sales day books

f) Receipt books

g) Cash books

h) Cheque books/cheque stubs

i) Bank statements from all banks

j) Expenses records

k) General ledger

l) Debtors Ledger

m) Creditors Ledger

n) Payment Vouchers

o) Documents on all assets of the companies

p) Tax certificate


Certified copies of all Financial Statements submitted to the Ghana Revenue Authority or soft copies (if any) from October 2005 to date. The certification must be done by the Ghana Revenue Authority to avoid the "cooking up" of such statements.


4. The 3rd Respondent is to account for all profits of the 1st and 2nd Respondent Companies as per the auditors report and for dividends to be paid within a period of 30 days from the date of submission of the reports.


5. The Applicant and the 3rd Respondent are to agree on an independent valuer to ascertain and value the assets and shares of the 1st and 2nd Respondent Companies.  In the absence of any subsequent order by the Court of Appeal varying the existing share structure, the 3rd Respondent is given the option to buy out the existing shares of the Applicant to bring a closure to these continuing oppressive acts .


6. Whilst the Applicant remains a Director, she is entitled to remuneration. Under section 194 (2) of Act 179, the fees payable to the directors as directors shall be determined from time to time by ordinary resolution of the company and not in any other way. In the instant case where the only two (2) members and directors have pitched their camps "as far as the East is from the West", how practicable is it for a meeting to be convened? From the evidence before me, this is not the first time that the Applicant has instituted Legal action against the 3rd Respondent. And , if she was never paid as a director since the year 2000, what prevented her from seeking redress until over a decade later? Even though the Applicant is ordinarily entitled to Directors fees from the inception of the 1st Respondent Company, I would say that prior to the dissolution of their marriage, the Applicant and the 3rd Respondent run the companies as if they were enterprises. The Applicant admits monies from the 1st Respondent Company were used for the maintenance of their family, payment of domestic staff, payment of their kids school fess, travel expenses and the like. No meetings were held, no dividends were declared and so forth. I believe she did not complain of not receiving a stated amount as directors fees because she equally enjoyed proceeds from the business. These benefits even trickled down to her domestic staff. Now that the marriage is over, she wants the court to turn back one decade and pay her "directors fees in arrears". This is impossible! This is my reason for allowing her payment of directors fees with effect from the year beginning 2006.


I move to the computation of the directors fees in respect of the Applicant. Her Counsel attached some figures to his written submissions and invited the court to adopt them as directors remuneration. In my opinion, he ought to have put that document in evidence to enable Counsel for the Respondents to cross-examine on that. Having failed to do so, I will attach no weight to those documents. That notwithstanding, I notice from exhibits B , C and D that the 1st Respondent made provision for payment of Directors remuneration in its Balance Sheet and accounts . From the exhibits just referred to, directors remuneration was pegged at ¢60, 000,000.00 in 2005 and 2006. GH¢ 6,000.00 per annum was stated in the 2010 and 2011 accounts but in 2012, the amount stated is GH¢ 6,600.00

.It can be inferred from these figures that an average of GH¢ 6,000.00 was provided as directors fees from 2005 and I will be guided by this average figure in determining the Directors fees to be paid to the Applicant. Since the 3rd Respondent was in effective control of the 1st Respondent Company, the only reasonable inference which can be made is that all these monies were paid to him solely and to the detriment of the Applicant in her capacity as director. Using the directors remuneration in exhibits B, C and D as a guide, I order the 3rd Respondent to refund to the Applicant of the GHs 6000.00 paid to him each year from 2006 to 2014 ( i.e. GH¢ 2000 x 8 = GH¢ 16,000.00). In the absence of any resolution to the contrary, the 1st Respondent, acting through the 3rd Respondent is to pay of Directors fees provided for in its accounts to the Applicant from 2015 until the Applicant ceases to be a director of that company. In respect of the 2nd Respondent Company, it is not possible to make any such orders at this time in the absence of any convincing proof as to its profitability.


The request for the appointment of an Inspector to investigate the affairs of the Companies cannot be granted because the Applicant failed to comply with the procedural requirements under section 220 (2) (b) of Act 179.


Having made extensive orders to remedy the oppressive conduct of the Respondents, particularly the 3rd respondent, I will not make any order of injunction restraining the 3rd respondent from running these companies or appoint a Receiver and Manager to manage them. Any attempt to do so will further compound the problems between the Applicant and the Respondents.


Had the 3rd Respondent complied with the earlier orders made by Apau J. (as he then was) in the year 2006, the instant application would probably not have been necessary. The evidence shows that he turned a blind eye to those orders. He deserves to pay punitive cost and it is my hope that this time round, he will treat the orders of this court with some dignity. In the circumstance, I award GH¢


20,000.00 cost against the 3rd Respondent in favour of the Applicant.

Judgment is entered against the Respondents. The 3rd respondent is ordered to pay GH¢ 16,000.00 as

Directors fees to the Applicant and cost of GH¢20,000.00. The Respondents, acting through the 3rd Respondent are to comply with all the orders stated in this judgment within the given time lines.