Court orders AGC to convene EGM

Accra (Greater Accra), 10^th February 2000

An Accra High Court on Wednesday ordered Ashanti Goldfields Company (AGC) to convene an Extra-Ordinary General Meeting (EGM) in Accra within 21 days to remove and replace the existing Board of Directors.

The court, presided over by Mr. Justice Richard Apaloo, restrained the directors or any officers of the company from contracting any loan on its behalf before the convening of the EGM.

This was in consideration of its debt, which stood at a little above 400 million dollars, as at the end of last year.

The Court's ruling followed an application by four shareholders of the company, calling for the removal of the board of directors.

The applicants, who claim they hold approximately 4.2 per cent shares in the company, sought the court's authority to sell all, any or part of the company's interest in its mining assets.

They also sought to restrain, in the meantime, the directors from entering into any agreement, contract or understanding with any other company.

In his over one-hour ruling, Mr. Justice Apaloo explained that he was restraining the directors or any officers of AGC from going in for a loan because that might worsen the financial plight of the company.

He shared the sentiments expressed by Mr. Tony Lithur, leading counsel for the applicants, when in his submissions he bemoaned the poor financial position of the company, which the presiding judge said was confirmed by Mr. Richard Kwame Peprah, Minister of Finance and Chairman of the company's Board.

Mr Justice Apaloo said, foreign exchange shares of the company, a gold-exploration and mining one, had fallen from 20 dollars to 9.37 dollars on the London stock market as at October five last year, while it was three dollars per share on the New York market.

He said this drastic reduction was occasioned by a press release issued by the company the previous day in which it admitted its financial crisis.

In his submission, Mr Lithur, leading counsel for the applicants, painted a gloomy picture of AGC, and said the company was "in dire financial distress."

Counsel said members of the Board of Directors have not acted in the best interest of AGC because they have shown their commitment to an agenda that will plunge AGC into deep crisis, which if not checked, will lead AGC into bankruptcy."

Mr Kwame Tetteh, senior counsel for AGC, submitted that the action brought before the court was "irregular", because apart from Adryx Mining and Metals Limited, one of the four shareholders, there is no mention of the other applicants in the suit as required by the rules.

Mr Justice Apaloo said consequential orders would be made after consultations with counsel on both sides.

He awarded five million cedis cost to the applicants.

GRi../