We are pleased to have been able to successfully represent our client, Goldilocks Investment Company Limited, in a landmark ruling of the High Court restraining, for the first time, the AGM of a listed company on an interim basis. The case involved, among other things, the interpretation of section 81 SJ of the Securities and Futures Act (cap 289) and the role of the Central Depository Pte Ltd as the registered member of a Bermuda company. The Honourable Justice Aedit Abdullah has now delivered the Court’s landmark brief Grounds of Decision. The brief facts of the case follow.
Goldilocks is a substantial shareholder of Noble Group Limited (“Noble”). As member, Goldilocks issued requisitions pursuant to which Goldilocks proposed 5 new members to Noble’s Board of Directors for consideration at Noble’s AGM, and to make known to shareholders its objections to the re-appointment of 5 other directors. Noble refused to act on the requisitions on the basis that Goldilocks was not a member of Noble within the meaning of that term in Noble’s Bye-Laws, which is Noble’s constitutional document. As Noble is incorporated in Bermuda, it was argued that Bermudian law applied to construe the Bye Laws and to the question of whether or not Goldilocks was a “member” of Noble. Noble argued that since Goldilocks did not appear in Noble’s Register of Members, it was not a “member” of Noble within the meaning of the term in the Bye Laws, and hence was not entitled to exercise any rights to issue requisitions. Instead, Noble argued, the true “member” of Noble was the CDP, as it is the CDP that is listed as a member in its Register of Members.
Goldilocks filed an application for a declaration of its rights as member, and in the meantime for an injunction restraining Noble’s AGM from proceeding. The AGM had been fixed for 30 April 2018.
The Honourable Justice Aedit Abdullah granted the interim injunction on 27 April 2018. The learned Judge considered section 81SJ of the SFA at some length. That section provides, inter alia, that “notwithstanding anything in…the constitution of the corporation, where book-entry securities of corporation are deposited with the (CDP)…the CDP… shall be deemed not to be a member of the corporation.” The Court held that on a proper construction of the provision, those who hold accounts with the CDP in respect of shares in corporations are the members of those corporations, as opposed to the CDP. The Court was of the view that given its regulatory nature, the SFA could operate as a forum mandatory statute, displacing the application of Bermudian law.
The decision is a very important one, because most shareholders of companies listed on SGX hold their shares through the CDP as nominee, such that it is the CDP (and not the beneficial owner) that would appear on the these companies’ Register of Members. Further, there are over 60 Bermuda incorporated companies that are listed on the Singapore Exchange. The decision has clarified the extent to which the rights of shareholders of such companies are protected under the SFA.
Please click on the links below for press coverage on this matter.