THE Court of Appeal has dismissed the appeal lodged by a tourist hunting company, Morogoro Hunting Safaris Limited, against the findings of the High Court to declare former Member of Parliament (MP), Halima Mamuya, as bona fide shareholder and director of the company.
Justices Mbarouk Mbarouk, Batuel Mmilla and Shaban Lila ruled in favour of the ex-MP for Arusha-Special Seat (CCM) after holding that most of the grounds of appeal advanced by the company, the appellant, against the decision given by Judge Amir Mruma on April 1, 2011, lacked merits.
“We find that there is no basis for faulting the findings of the learned trial judge that forfeiture of the respondent (Mamuya)’s shares in the appellant’s company was invalid, irregular and illegal,” the justices said in their judgment delivered recently.
They noted the cause of the respondent’s removal from the company was based on a meeting calling for payment of nominal value of shares subscribed, for which was not validly constituted as she was not served with a notice of whatever kind to attend that meeting.
“It is certain therefore, even assuming that the board meeting was properly constituted and the respondent was dully served, still the resolution which was purportedly passed (calling 75 per cent subscription of shares instead of 25 per cent) would not be valid as it was against the law,” they said.
According to the justices, any particular company carries out its management functions by its directors, and that the directors must act collectively, that is, by resolution unless provided otherwise in the Articles Association of the company.
Because of that, they said, notices informing them about the board meetings must always be given to all of them in sufficient time to enable them attend any particular meeting.
“While accidental omission to give notice to any of them resulting into failure to attend the meeting is not fatal, deliberate omission to serve the notice is fatal and invalidates the meeting and resolution,” the justices said.
The justices concluded, therefore, that the trial judge correctly held that the termination of Halima, with experience in tourism, environmental protection, economic development and women’s affairs, from the appellant company as shareholder and director was irregular, invalid and of no legal effect.
Facts show that Morogoro Hunting Safaris Limited was incorporated on December 3, 2003 under the laws of Tanzania. The initial subscribers and directors of the company were Mr Jamal Suleiman Bin Thabit, Ali Ahmed Saeed and Halima Mohamed Mamuya.
Each of them took a specified number of shares, with Mr. Thabit having 8,519 shares, while the other two had 8,518 each. Every share was valued at 10,000/-. The directors had allegedly appointed Mr Thabit as the Chairman of the company and sole signatory.
Ms Mamuya was the Managing Director with a special assignment of procuring for the company an allocation of hunting block by exploiting her contacts in the tourism industry.
Her evidence shows that she had succeeded to procure a hunting block at Sasawala area in Ruvuma Region in June 2004. She had obtained for the appellant company a license which had six legal obligations to be discharged by the company, as license holders.
They include paying block fees, tourist agent fees, and camp building fees in the hunting block, contributing funds to the adjoining villages, anti-poaching funds, among others.
The turning point came on August 10, 2004 when in flagrant violation of the company’s Memorandum and Articles of Association, when the Chairman of the company called a meeting of Board of Directors, but the respondent was singled out because she was not served with the notice of appearance.
Through that meeting, the Board of Directors purportedly made a resolution, calling upon shareholders to pay a sum equivalent to 75 percent of the nominal value of their shares.
A subsequent meeting was held on November 26, 2004 of which she had no notice, where another resolution was made. Such resolution was on the basis of the respondent’s shares and those of her colleagues, Ali Ahmed Saeed, were forfeited and transferred to Thabit’s two sons, Mohamed Jamal and Ahmed Jamal.
Four days later (November 30, 2004), an extra-ordinary meeting was convened, whereby the resulting resolution removed them from the list of directors of the company. It was at that point in time when Ms Mamuya decided to take the matter to court for resolution.