Question Tag: Appointment

i) Validity of the Minister’s Action:

• The Regulations of a company may provide for the appointment of a director or directors by a class of shareholders, debenture holders, creditors, employees, or any other person.
• The regulations registered are a contract under seal and bind all members, officers, and the company until amended. (Cf. Sec 21 of Act 179)
• As far as Darling Company regulations give Kofi Mintah the right to appoint five directors, including Asamoah, Asamoah’s directorship cannot be revoked by the government.
• The government has no sole authority under the regulations to dissolve the Board of Directors or appoint or remove any board member except those whose nominations were made by the government.
• The government’s right over the appointment or removal of directors can only be exercised with other shareholders regarding the two slots allocated to them by the regulations.
• A person shall not be appointed a director of a company unless that person has, prior to the appointment, consented in writing to be appointed.
• By giving a written acceptance of his appointment, Asamoah’s appointment complied with both Section 181 of Act 179 and Darling’s regulations.
• Section 185 provides for the removal of directors, which excludes an announcement by the government.
• In accordance with Section 185, a company may by ordinary resolution at a general meeting remove from office all or any of the directors despite anything in its Regulations or in an agreement with the director. A resolution to remove a director shall not be moved at a general meeting unless notice of the intention to move it has been given to the company not less than thirty-five days before the meeting at which it is to be moved.
• Asamoah can resign, be removed, or vacate his position if he becomes incompetent in any way under the Act (e.g., insane) or under the regulations (e.g., director’s share qualification, if required).
• Asamoah and Kofi Mintah can enforce their rights if the government persists.
• Section 324 of Act 179 provides that if legal proceedings are instituted by a person, that person shall sue in a representative capacity on behalf of that person and any other members of a class.
• Asamoah should believe Kofi Mintah, as the government announcement is null and void and should be ignored.

(4 points for 1.5 marks each = 6 marks)

ii) Remedies Available to Asamoah:

• Asamoah can resign, be removed, or vacate his position if he becomes incompetent in any way under the Act (e.g., insane) or under the regulations (e.g., director’s share qualification, if required). Since his competence is not being challenged, Asamoah and Kofi Mintah can enforce their rights if the government persists.
• Asamoah should believe Kofi Mintah, as the government announcement is null and void and cannot be effective since procedurally his appointment has not been terminated as a director. The directive should therefore be ignored.
• Section 324 of Act 179 provides that if legal proceedings are instituted by a person, that person shall sue in a representative capacity and on behalf of any other members of that class. A court action for Prohibitio can also be sought by Kofi Mintah to stop the government from further attempts to unilaterally remove Asamoah as a Director.
• Asamoah remains a director and can seek redress in court to nullify the government’s announcement.

(2 points for 2 marks each = 4 marks)