Minority shareholder protection in Namibian company law

Abstract

Abstract provided by author

This paper is believes that companies not only fuel barter and trade between nations or local companies, it has a barring on a country's economy and thus, where companies are not properly controlled and/or regulated by law, creditors and shareholders are bound to suffer loss. Within this scope it is argued that a company depends largely upon its internal organs for proper management and financial support. No distinction can thus be drawn between the contributions made by minority and majority shareholders although in practice, minority and majority shareholders do not enjoy an equal footing in relation to the company's method of decision making. For clarity sake, the fact that an individual and/or group of individuals jointly hold the majority shares in a company is not merely an indication of their status but also their power within the company. Majority shareholders thus steer the company into the direction they desire by mere majority vote. The voting power of a shareholder can thus either be employed as a constructive or destructive tool depending on the value of shares held by such an individual. Hereto, the conduct of the majority shareholders can further influence the position of a creditor, especially where company funds are being squandered or embezzled by such holders. It is worth noting that the action taken by majority shareholders by way of their majority vote, transpire internally within the company and thus creditors cannot take constructive notice when company funds are being mismanaged by shareholders. The only remedy thus exists in the minority shareholders where such members are dissatisfied with the majority's conduct. This paper thus serves to investigate whether in practice, minority shareholders are internally protected against majority action and externally by the Courts or statute law. This thesis however adopts the hypothesis that although common law, case law and/or statue law may accord protection of minority interests, in practice minority shareholders are left bare against the decision making ability of the majority shareholders within the same company