Sep 19, 2020 News
There are questions being raised now by one of the country’s biggest companies concerning the format for its upcoming Annual General Meeting (AGM). One of the country’s top accountants, Christopher Ram, who has been paying attention to governance of the local companies with large shareholders’ base, has issues with the appropriateness.
An advertisement of a notice recently published Demerara Distillers Limited has advised its members that only seven persons can physically attend its AGM to be held on Friday, October 9. This arose out of an order granted by the High Court on an application made by Trust Company (Guyana) Limited in its capacity as a shareholder of DDL.
In keeping with the provisions of the Companies Act, the Court dispensed with the quorum requirement in the company’s Articles by limiting to seven shareholders who collectively account for 40% of the shares in the company.
Subsequent to the order, the Company named the seven persons from five companies: the applicant itself, Hand-in-Hand Trust, JP Santos, Demerara Fire and General and Sannap Manufacturing.
In a comment, Ram, also a lawyer, who has written extensively in the past on corporate governance, said that he has a number of concerns with the notice, including whether the Court may have gone beyond the law in relegating all other shareholders as “observers”.
It was explained that shares constitute property and attached to those shares is the right to attend, participate in and vote at their meetings, physically or through their designated proxy.
What the court has now empowered the company to do is decide for the shareholder who their proxy must be if they want to vote on any of the motions.
Ram said that another concern is the apparent arbitrariness in the selection of the seven.
He noted that both Secure International Finance Co. Ltd. and the National Insurance Scheme have more shares in DDL than six of the seven shareholders selected by DDL/Trust Company. That is neither accidental nor honourable, he said.
He questioned the relationship between Trust Company Guyana Limited and DDL, which is known over the world for its award-winning El Dorado line of rums. DDL also has the franchise for Pepsi and other soft drinks and is involved in banking and shipping.
Ram noted that there are two regulators governing corporate DDL – the Registrar of Companies (for companies generally) and the Securities Council (which regulates public companies).
He expressed surprise that there is no evidence of any of these entities being consulted on the particular application by the Trust Company.
Ram said that had the regulators been consulted they might very well have found it appropriate to have entered an appearance in the court matter and probably objected to the move by Trust Company.
Ram cited a case from Jamaica authorising companies to hold their annual general meetings virtually or by a combination of physical and virtual meetings but in each case with the right to vote expanded rather than reduced.
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