Friday, 19 August 2011

CALing it as I see it.

The public must surely be bemused (if not, confused) over the recent "I resign! No! You can't resign! Okay! I'll stay!" thingy with Caribbean Airlines Limited (CAL).

Moreso they might be, if they peruse the following excerpts from the Companies Act and the interspersed, highlighted comments of mine:



An Act to revise and amend the law relating to companies and to provide for related and consequential matters.

*[Assented to 6th October 1995]

Section 1.

This Act may be cited as the Companies Act.

Section 2.

This Act came into operation on 15th April 1997. (So, it has been in operation long enough for none but whom the law excuses to be excused.)

Section 74.

(1) A director of a company ceases to hold office when—
(a) he dies or resigns; (Everything turns on this, but please continue reading.)
(b) he is removed in accordance with section 75; or
(c) he becomes disqualified under section 68 or 69.

(2) The resignation of a director of a company becomes effective at the time his written resignation is served on the company or at the time specified in the resignation, whichever is later. (In other words, no board member's resignation can be valid unless served by said director on the company. So, any board member serving otherwise is a clown.)

Section 76.

(1) A director of a company is entitled to receive notice of, and to attend and be heard at, every meeting of shareholders. (If Cabinet members held any discussions concerning the instant issue, they could have only properly so done i.a.w. 76. (1), meaning: the Minister of Finance, in his capacity as Corporation Sole, or whomever he delegates for the purpose at which meeting, in any event, the CAL Board ought to have been invited, present and participated.)

(2) A director—
(a) who resigns;
(b) who receives a notice or otherwise learns of a meeting of shareholders called for the purpose of removing him from office; or
(c) who receives a notice or otherwise learns of a meeting of directors or shareholders at which another person is to be appointed or elected to fill the office of director, whether because of his resignation or removal, or because his term of office has expired or is about to expire,
may submit to the company a written statement giving the reasons for his resignation or the reasons why he opposes any proposed action or resolution. (Well? Did he? or, didn't he?)

(3) The company shall forthwith send a copy of the statement referred to in subsection (2) to the Registrar and to every shareholder entitled to receive notice of any meeting referred to in subsection (1), unless the statement is included in or attached to a management proxy circular required by section 144. (And, if he did, did CAL comply with this legal mandate? If not, why not?)

(4) No company or person acting on its behalf incurs any liability by reason only of circulating a director’s statement in compliance with subsection (3). (In other words, CAL nor Minister, nor anyone for that matter, can be hauled before the courts or penalized for relaying such information to the Registrar. It is clear the intent of the law here is to let things be known rather than hidden.)

Section 84.

(1) Directors of a company may appoint from their number a managing director or a committee of directors and delegate to the managing director or committee any of the powers of the directors. (Just to remind: a committee could comprise just one person.)

(2) Notwithstanding subsection (1), no managing director and no committee of directors of a company may—
(a) submit to the shareholders any question or matter requiring the approval of the shareholders;
(b) fill a vacancy among the directors or in the office of auditor;

Section 85.

An act of a director or officer is valid notwithstanding any irregularity in his election or appointment, or any defect in his qualification. (This is a saving-grace provision, for it protects any injured by the incompetence of such an official.)
If you noticed, Section 74 deals solely with a director demitting office before when due...director...not, Chairman! If Nick resigned as Chairman (the Post-Cabinet briefing suggests it was), then everything is moot, for Corporation Sole, being the controlling shareholder, is the one who cals calls the shots where such CAL matters are concerned. And, Corporation Sole did! But, then again, did he? After all, he hasn't said anything?
The topic is so grave and the modern-day dispensation so warranting of being frank with the public's business, it behooves full disclosure (in compliance with the principle of uberrimae fidei) of all correspondence passing between the parties involved, to dispel all the hot air and long-winded agitation the "I resign! No! You can't resign! Okay! I'll stay!" thingy has been generating.

I gone!

For an online read of the Companies Act, click >>here<

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