(d) AD's objection to the proposed increase in share capital and the formula for the allotment of shares should be evaluated based on the company's Articles of Association and relevant laws. Here are the key points to consider: 1. Articles of Association: The Articles of Association outline the rules and regulations governing the internal affairs of the company. AD should review the Articles to determine if they contain any provisions regarding the increase in share capital. If the Articles do not provide for such an increase, AD may have a valid objection. 2. Legal requirements: AD should also consider the legal requirements for increasing share capital. In some jurisdictions, companies may be required to follow specific procedures, such as obtaining shareholder approval or filing documents with the relevant authorities. If the proposed increase does not comply with these legal requirements, AD's objection may have a valid basis. 3. Shareholder rights: AD should assess whether the proposed increase and allotment of shares would unfairly disadvantage her. If the additional shares would dilute AD's ownership and voting rights significantly, she may have grounds to object. AD should also check if the proposed allotment of shares is in line with the principle of equal treatment of shareholders. 4. Legal advice: AD's lawyer's letter objecting to the proposed increase in share capital can be a valuable resource. AD should consult with her lawyer to understand the legal implications of her objection and the potential consequences for the company. In summary, AD's objection to the proposed increase in share capital and allotment of shares should be evaluated based on the company's Articles of Association, legal requirements, and potential impact on her rights as a shareholder. Seeking legal advice is crucial in understanding the validity and potential effects of her objection. © Draft Resolutions for Extraordinary General Meeting (EGM) 1. Resolution 1: Increase in Share Capital The shareholders of Homebuild Construction company hereby approve the increase in the company's share capital from 50,000 shares to 100,000 shares. The additional shares shall carry the same rights as the existing shares. The increase in share capital shall be implemented in accordance with the provisions of the Companies Act and any other relevant laws and regulations. 2. Resolution 2: Allotment of Shares The shareholders of Homebuild Construction company hereby approve the proposed allotment of shares. Each director, excluding Anna Dube (AD), shall receive 13,125 shares. Anna Dube (AD) shall receive the remaining balance of shares after the allotment to other directors. The allotment of shares shall be carried out in compliance with the Companies Act and any other applicable laws and regulations. 3. Resolution 3: Amendments to Articles of Association The shareholders of Homebuild Construction company hereby approve the necessary amendments to the Articles of Association to accommodate the increase in share capital and the proposed allotment of shares. The amendments shall be made in accordance with the provisions of the Companies Act and any other relevant laws and regulations. The amended Articles of Association shall be filed with the appropriate authorities as required by law. 4. Resolution 4: Approval of Legal Representation The shareholders of Homebuild Construction company hereby approve the engagement of Anna Dube's lawyer to represent her interests in relation to the proposed increase in share capital and the allotment of shares. The lawyer shall be authorized to communicate with the company and take any necessary legal actions on behalf of Anna Dube (AD). The company shall bear the reasonable costs and expenses incurred by Anna Dube's lawyer in connection with this matter. 5. Resolution 5: Resolution of Conflicts The shareholders of Homebuild Construction company hereby resolve to address the conflicts between the shareholders and directors in a fair and transparent manner. The board of directors shall establish a committee or appoint an independent mediator to facilitate the resolution of conflicts. The committee or mediator shall work towards finding mutually agreeable solutions and promoting harmonious relations among the shareholders and directors. Note: The above draft resolutions are provided as a general guide and should be reviewed and customized to meet the specific requirements and legal framework applicable to Homebuild Construction company. It is advisable to seek professional legal advice to ensure compliance with all relevant laws and regulations. (b) To resolve the issues in Homebuild Construction Company, the following steps can be taken: 1. Mediation or Negotiation: Encourage MD and AD to engage in open and honest communication to address their concerns and find a mutually agreeable solution. A neutral third party, such as a professional mediator, can facilitate the discussion and help them reach a compromise. 2. Review and Update Articles of Association: Conduct a thorough review of the company's Articles of Association to identify any gaps or ambiguities that may have contributed to the conflicts. Consider amending the Articles to clearly define the roles, responsibilities, and decision-making powers of the directors and shareholders. 3. Shareholder Agreement: Draft a shareholder agreement that outlines the rights and obligations of each shareholder, including provisions for dispute resolution, decisionmaking processes, and restrictions on loans to directors. This agreement can provide a framework for resolving conflicts and preventing future disputes. 4. Independent Directors: Consider appointing independent directors who do not hold shares in the company. Independent directors can bring objectivity and impartiality to the board, helping to balance the interests of all stakeholders and reduce conflicts. 5. Board Meetings and Governance: Establish clear guidelines for board meetings, including frequency, agenda setting, and decision-making processes. Ensure that all directors have equal opportunities to participate and voice their concerns. Implement good corporate governance practices to enhance transparency and accountability. 6. Legal Advice: Seek legal advice to address AD's objections to the proposed increase in share capital and the allotment of shares. Evaluate the validity of AD's concerns and determine if any legal remedies or alternative solutions are available. 7. Alternative Dispute Resolution: If the conflicts persist, consider alternative dispute resolution methods such as arbitration or mediation. These processes can provide a more formal and structured approach to resolving disputes, with the assistance of a neutral third party. By implementing these measures, Homebuild Construction Company can work towards resolving the conflicts between the shareholders and improving the overall governance and functioning of the company. (a)Matters pertaining to administration, regulations, and statutes that arise at Homebuild Constru ction At Homebuild Construction, the problems are statutory, regulatory, and administrative in nature. These are the main things to think about: 1. Business and Administration: • Shareholder dispute: Mary Dube (MD) and Anna Dube (AD) in particular were at odds with on e another as shareholders. The resolution of this dispute may have an impact on how well the business runs and how decisi ons are made. • Power disparity: AD took issue with MD's management of the company, especially the loans he gave to other directors. Managing Director AD believed that MD was using more authority than was appropriate for the role. This disparity in power has the potential to spark conflict and impede efficient government. 2. Regulatory Matters: Board meetings: The company found it difficult to hold board meetings due to conflicts between the shareholders. Regular board meetings are essential for decision-making and ensuring proper corporate governance. Notice for Extra Ordinary General Meeting (EGM): The company sent a notice for an EGM to all directors and shareholders, including AD. This is a regulatory requirement to inform stakeholders about important matters and give them an opportunity to participate in decision-making. 3. Statutory Matters: Share capital: The company proposed to increase its share capital from 50,000 shares to 100,000 shares. This requires compliance with statutory requirements, such as filing the necessary documents with the relevant regulatory authorities. Allotment of shares: The proposed allotment of shares would give all directors, except AD, 13,125 shares each, with AD receiving the balance. The allotment of shares must comply with statutory provisions and the company's Articles of Association. 4. Legal Objection: AD's lawyer sent a letter objecting to the proposed increase in share capital and the formula for the allotment of shares. AD argued that the Articles of Association do not provide for the increase in share capital. This legal objection raises concerns about compliance with the company's governing documents and applicable laws. In summary, the issues at Homebuild Construction involve administrative conflicts, regulatory requirements for board meetings and EGMs, compliance with statutory provisions for share capital increase and allotment of shares, and legal objections regarding the company's Articles of Association. These matters need to be addressed to ensure proper governance and compliance with applicable laws and regulations. Dear Mr. Tonny Moyo, Thank you for your letter dated 31 August 2023. We acknowledge your request for the following information: (i) A copy of the minutes of the Annual General Meeting (AGM) held on 27 August 2023. (ii) A copy of the register of members. (iii) Permission to inspect the books of accounts to verify the allegations of fraud by the directors. We understand your concerns as a shareholder and we are committed to transparency and accountability. In response to your requests: (i) Minutes of the AGM: We will provide you with a copy of the minutes of the AGM held on 27 August 2023. These minutes contain a record of the discussions, decisions, and resolutions made during the meeting. (ii) Register of Members: We will also provide you with a copy of the register of members. This register contains the details of all shareholders, including their names, addresses, and the number of shares they hold. (iii) Inspection of Books of Accounts: We acknowledge your request to inspect the books of accounts to verify the allegations of fraud by the directors. As a shareholder, you have the right to inspect the company's books and records. We will arrange a suitable time for you to review the books of accounts at our office. Please note that this inspection will be conducted under the supervision of our authorized personnel. We assure you that we take these allegations seriously and will cooperate fully in providing the requested information. We are committed to maintaining the integrity of our company and ensuring that our shareholders have access to accurate and reliable information. If you have any further questions or require additional information, please do not hesitate to contact us. We value your continued support as a shareholder of MIME Limited. Yours sincerely, [Your Name] [Your Position] MIME Limited List of Actions for Directors, Shareholders, and Company Secretary for a Rights Issue in Zimbabwean Context Directors: Seek advice from the company secretary regarding the rights issue process and legal requirements. Review the company's financial position and determine the amount of capital needed. Consult with the company's legal advisors to ensure compliance with relevant laws and regulations. Prepare a resolution to be presented at a board meeting, seeking approval for the rights issue. Discuss and decide on the terms of the rights issue, including the number of shares to be issued, the subscription price, and the ratio of rights shares to existing shares. Obtain necessary approvals from regulatory authorities, such as the Zimbabwe Stock Exchange (ZSE) and the Securities and Exchange Commission of Zimbabwe (SECZ). Prepare an information memorandum or prospectus outlining the details of the rights issue and distribute it to shareholders. Convene a general meeting of shareholders to seek their approval for the rights issue. Ensure that all necessary documents, such as the notice of the general meeting and the proxy forms, are prepared and sent to shareholders in a timely manner. Monitor the progress of the rights issue and provide regular updates to shareholders. Shareholders: Review the information memorandum or prospectus provided by the company and assess the merits of the rights issue. Attend the general meeting and vote on the resolution approving the rights issue. Decide whether to exercise their rights to subscribe for additional shares or sell their rights to other investors. Make the necessary payments for the subscribed shares within the specified timeframe. Stay informed about the progress of the rights issue and any subsequent developments. Company Secretary: Advise the directors on the legal and regulatory requirements for a rights issue. Assist in preparing the necessary documentation, such as the resolution, information memorandum, and notice of the general meeting. Coordinate with regulatory authorities, such as the ZSE and SECZ, to obtain the required approvals. Ensure compliance with all legal and regulatory obligations throughout the rights issue process. Maintain proper records of the rights issue and provide necessary updates to the directors and shareholders. Facilitate communication between the company and its shareholders regarding the rights issue. Please note that this list provides a general overview of the actions to be taken and may vary depending on the specific circumstances and requirements of the company and the Zimbabwean context. It is advisable to consult with legal and financial professionals for accurate and up-todate guidance.
