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 shareholders certain legal rights and protection against some specifics by the company or the Board or the management. The statutory protection is provided for in the company law, wherein, the ordinary and the extraordinary general assemblies of the company are not authorized nor allowed to take, add or amend any of the legal rights conferred on the shareholder by the law and or the Articles of Association (A o A) of the company. This important statutory right has been vested with all shareholders regardless of the fact that they are individuals or institutions, small or big, etc. 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 certain instances, it has been observed that the general assembly has gone astray in relation to certain rights of shareholders. A good example, could be the emergence of certain discussions during the 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 clear that decisions or resolutions taken in such instances could be considered illegal, void “ab initio” and of no effect. The statutory rights protected by the company law and the (A o A) are many, such as the right to attend meetings, right to participate in discussions, 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 difference of opinion in relation to certain issues between the Board, the executive management on one hand and shareholders on the other hand. We believe this is normal, however, the differences shall not affect or jeopardize the statutory rights given to the shareholders as attending assemblies or participation in discussing any issue during meetings. Differences or disagreements could happen when shareholders are active, for example, when the company is planning merger or acquisition or involvement in mega projects, etc. There are examples wherein extensive debates had been going on in many countries between shareholders and the management regarding such important issues. Some companies, have changed or stopped certain projects after facing resistance from the shareholders. We would like to see such hot debates in our region as it is high time for shareholders to be active in exercising their powers. Each shareholder in the company and all shareholders collectively shall join forces and stand firmly to exercise their rights and to get them by all means 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 companies and shareholders. Each shareholder and likewise each company shall jointly work vigorously to achieve this mutual result.
Dr. AbdelGadir Warsama
Legal Counsel
Email: awarsama@warsamalc.com
