Disclaimer; This entry is made by the one who has learned, the same one who is still learning, and the very same one who will learn from someone who can enlighten him if what he wrote is wrong. This entry is purely based on English Company Law as he learned English Law, and not from other countries whatsoever.
Imagine this scenario;
Someone told me that someone else will retain his control in an entity eventhough another person will be holding 51% of the stake in that entity.
Someone then asked me,’ Can someone really do that?’
To be honest, as far as I know from what I learn, in England it is possible.
The articles of the company which binds contract between shareholders and another shareholders can be altered to serve the purpose of giving the control to minority. This alteration can be done by shareholders passing special resolution which is the approval of at least 75% by value of those present and voting.
Someone asked me again,’But, how can someone with less than 50% votes can pass this special resolution when it required 75% vote to be approved?’
Ahaaa..there is an exception to that;
A provision relating to the right attached to a class of shares which has been placed voluntarily in the memorandum or articles, can be altered only by using the procedures set out when the provision is set. Thus is it possible to create a share with inalienable, a procedure which has occured with some government floatation of what has been state-owned industries, by specifying class rights in the memorandum or article and declaring those rights to be incapable of change without the consent or approval of the holders of that class of share.
Therefore it is possible to retain control even if you do not have the majority stakeholding in the entity if this is the case.
Someone then tell me, ‘Oooo, therefore it is oklah for government to control Proton if VW has 51% of the shares?’
Whether it is ok or not, depends to whom the question was asked.
If you ask welfare economist, it is ok for the government to retain the control of the company, as whatever decision that will be made, must be based on peoples’ welfare i.e employment, training etc.
If you ask me, as I am pro-capitalist, this is not ok, as my principle; whoever can have whatever she wants, and she can do whatever she wants to whatever she has (purely on good positive externalities economic sense, not the bad one though)
If you ask environmental activist, the answer ‘ I don’t care who owns what, and I don’t care who controls what. Don’t produce the car in the first place!!!’
The moral of the story, Don’t blame others for the different opinions that they have on certain issue, as different people stands on different grounds, hence different points of view. If some peoples’ view is wrong, don’t blame them, blame ourselves for not sharing our ground with them…..
Broaden the horizon of your point of view, open your mind up, and the world would be a peace place to live…isn’t it so?
Yes…’tis.
Ipoh people- Smells delicious Bristol Cheddar Village people- Smells delicious
Bristol Cheddar Village people- Stink bomb Ipoh people- Stink bomb
