to ratify the sale of SAMB’s shareholding in Cape Mohair and Wools (CMW) to Oos Vrystaat Koöperasie (OVK). Mohair producer and BKB chairperson Chris Louw, BKB and others had brought an application against SAMB, CMW, OVK and others to have the resolution set aside, as the sale was allegedly not in the interests of mohair producers.
Applicants asked that the special resolution taken regarding the sale of the shares be set aside and that CMW be interdicted from registering the special resolution.
Judge Ebrahim ruled on 24 June 2010 that the refusal by SAMB to accept proxies granted by certain shareholders of SAMB in favour of BKB’s nominees to vote against the special resolution was prejudicial to the proxy grantors in terms of the Companies Act.
Judge Ebrahim said this was not a situation where a minority was refusing the majority’s decision which, as shareholders, they were contractually bound to accept by the Articles of Association, but a violation of their right to participate in the decision-making process.
The judgment’s effect is that SAMB will remain the holding company of CMW and that these companies will remain under mohair producers’ control. SAMB has a 66% shareholding in CMW, while OVK holds the remaining shares.
“Should the sale of SAMB’s shareholding to OVK have gone through, CMW would have been under full control of a grain company which would not be in the interests of the mohair industry,” said BKB chairperson Chris Louw.