The directors of a railway compriy are not justified in acting on an old resolution auithorising the issue of shares after the particular purpose for which the authority was given has ceased to be available.
Nor in issuing shares, supposing them to have the power, for the express purpose of creating votes to influence a coming general meeting.
And an injunction will be issued to restrain the issue of such shares ; it not being a question of the internal management of the company, buit an attempt on the part of the directors to prevent such management from being legitimately carried on. Foss v. Harbottle (2 Hare, 461) distinguished.
Where an interm order has heen obtained, and simultaneous applications are made on the part of the Plaintiff’s for an injunctioii in terms of the order, and on the part of the Defendants to discharge the order, the Plaintiffs have the right to begin.
Sir George Jessel MR said that if it had been proved that the power to make calls was being exercised for the purpose of disqualifying hostile shareholders at a general meeting, that would be an improper exercise of the directors’ powers.
Judges:
Sir George Jessel MR
Citations:
[1864] EngR 278, (1864) 71 ER 361, (1864) 2 H and M 10
Links:
Jurisdiction:
England and Wales
Cited by:
Cited – Eclairs Group Ltd and Glengary Overseas Ltd v JKX Oil and Gas Plc SC 2-Dec-2015
Company Director not Trustee but is Fiduciary
The Court was asked about an alleged ‘corporate raid’, an attempt to exploit a minority shareholding in a company to obtain effective management or voting control without paying what other shareholders would regard as a proper price.
Held: The . .
Lists of cited by and citing cases may be incomplete.
Company
Updated: 09 May 2022; Ref: scu.595477