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Landmark Decision in Favour of ANSA McAL (Barbados) Limited

ANSA Barbados








ANSA McAL (Barbados) Ltd. (‘ANSA’) is pleased with the decision of the Court of Appeal to restore the injunction granted by the Honourable Chief Justice, Sir Marston Gibson K.A. restraining Banks Holdings Limited (‘BHL’) from performing or otherwise giving effect to certain preferential shareholders’ rights in favour of SLU Beverages Ltd. or ‘SLU’, indirectly owned by the Brazilian based company Ambev S.A.

In arriving at its decision, the Court of Appeal noted that those special rights and privileges created by a “poison” debt security agreement were given effect solely at the direction of the BHL Board, without the consent of BHL shareholders. This Agreement created conversion shares for SLU which carried pre-emptive rights and were essentially redeemable at a premium. Further, having entered into that Agreement, the Court of Appeal found that “rather incredulously, in this brave new world of Corporate Governance”, the BHL board was of the view that it could not disclose the Agreement to BHL shareholders because of a confidentiality clause in the Agreement.

The Court of Appeal determined that there was a serious issue to be tried in the Courts because there was undisputed evidence that SLU’s conversion shares conferred special rights and privileges on SLU, that were not enjoyed by other BHL shareholders. Additionally, the fact that such unique rights were granted to SLU without the knowledge and consent of BHL shareholders raised, in the opinion of the Court, the question as to whether BHL had acted in a manner which was unfairly prejudicial to and unfairly disregarded the interests of ANSA and all other BHL shareholders.
In our view, the effect of the Court’s judgment is to make it clear that where there is strong evidence of a threat to the fundamental principle that shareholders in the same class should be treated equally, the matter is not to be viewed lightly.

We are also appreciative that the Court of Appeal has seen fit to award ANSA, its costs in this appeal and in the High Court.

Speaking on behalf of ANSA, Corporate Secretary and Group Head of Legal, Mrs. Frances Bain Cumberbatch stated, “This is a ground-breaking case which shall be referred to in the Caribbean Courts for years to come and to which every regional student of Company Law should pay careful attention.”

We are proud to have been party to this landmark decision on the issue of shareholders’ rights and which upholds the principles of good corporate governance. ANSA remains a shareholder in BHL to date and our shareholders’ oppression action still subsists in the High Court. We are currently considering all of our options.


To: News/Business Editor
Date: 12th July, 2016

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