Shareholder Rights

Re-affirming Protection of Shareholder Rights. _ MS Fang Min V Uganda Hui Neng Mining Limited & Others HCCS No. 318 OF 2016.

  • Introduction

This decision re-echoes the concept of protection of shareholder rights.

On the 19th day September 2019, the Honourable Justice David Wangutusi delivered judgment in favour of the Plaintiff against the defendants declaring several of their actions that led to the fraudulent transfer of Exploration License No. 1178 illegal, null and void.

  • Background

Ms Fang Min hereinafter referred to as the Plaintiff through her lawyers Byenkya, Kihika & Co. Advocates sued Uganda Hui Neng Mining Limited (Nominal Defendant), Guangzhou Dong Song Energy Group Co. Ltd, L.V Weidong, Mao Jie, Yang Junjia and Guangzhou Dong Song Energy Group (U) Ltd who are referred to as the 1st,2nd,3rd,4th,5th and 6th Defendants respectively.

On the 22nd December 2014, the 2nd Defendant and 6th Defendant entered into a Mineral Development agreement with the Government of Uganda which paved the path for the exploration and development of extraction. The 2nd Defendant thereafter transferred the Exploration License and Mining Lease to the 6th Defendant. The Plaintiff contended that the transfer of license from the 1st Defendant to the 2nd Defendant without her consent deprived the 1st Defendant of her property. That the act also occasioned   loss to her as a minority share-holder.

The Plaintiff further contended that the 4th and 5th Defendants who participated in those transfers did so without capacity in as much they did not subscribe to any shares. The Plaintiff also contended that the acts of the 3rd, 4th and 5th   Defendants in transferring the exploration license to the 2nd Defendant and subsequently to the 6th Defendant was done fraudulently.

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