A statutory provision was said to have unlawfully deprived the claimant of property in the form of voting rights in a company of which it was a shareholder. The company owned 50% of the ordinary shares and associated voting rights in its parent company. The Companies Act worked to reduce the shareholding to 40%, and the company therefore lost effective control of its parent company. Its shareholding was therefore reduced in value, and the claimant said that it had been deprived of property without compensation in breach of the constitution.
Held: Voting rights are only an incident of the ownership of the shares, and nor were they an interest in or right over the company’s property. Only the shareholding itelf is property. The loss of control of a company even though it undermines the value of a shareholding is not itself a loss of property. The change had not deprived the plaintiff of property and was not unconstitutional.
Citations:
Gazette 16-Sep-1992, [1992] 1 WLR 903, (1993) 109 LQR 202
Jurisdiction:
Commonwealth
Company, Constitutional
Updated: 08 April 2022; Ref: scu.80953
