WE HAVE THE POWER, page-17

The Corporations Act is the principal legislation regulating companies in Australia. Between several matters taken into account, we will find regulations regarding market manipulation, breach of directors duty and so on.

Directors should exercise their powers and manage the company in the interests of all shareholders.

While minority shareholders often have little or no ability to influence the affairs of a company, directors must nonetheless act fairly between shareholders and ensure their decisions promote the interests of the company and shareholders generally, not just the majority. Directors who fail to do so risk not only breaching their statutory duties, they also risk engaging in oppressive conduct.

Section 232 and 233 of the Corporation Act explains that (between various) a court may make an order if a Company is either:

• Contrary to the interests of the shareholders as a whole;
• or Oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a shareholder or shareholders

Conduct that has been held to be oppressive, unfairly prejudicial or unfairly discriminatory includes: the issue of shares for the dominant purpose of diluting the minority voting rights.

Director shareholders who engage in oppressive conduct in breach of their duties are at risk of being ordered to buy the minority’s shares with no control over the price.

Now, are you all picturing in your mind our beloved directors being ordered to buy our shares at 3-5 cents?

Just a dream? I don't think so. I found the way to make it happen.

To be continued tomorrow