The High Court found that Rezaul Karim and Mahbuba Sultana engaged in a campaign of oppression against SEDA (Skills and Enterprise Development Academy) Limited and its director and minority shareholder, Tiago Mascarenhas. The court set the price for a 57% shareholding at €225,065 and directed the respondents to sell it to Mascarenhas if he exercised an option to buy.
In a judgment delivered on 23 May 2019, Mr Justice John Jordan held that Karim was the beneficial owner of the shares registered in his wife Sultana’s name. The court found that Karim had controlled the company’s affairs and that Sultana and a former director had acted at his direction. It also found that Mascarenhas was entitled to a 43% shareholding under the parties’ 2017 settlement agreement.
The judge’s findings concerned conduct after that settlement, against the background of an earlier dispute. The court found that the respondents sought to take control of the board and company bank account, pursued payments of overseas director and shareholder expenses that they wanted backdated by four years, attempted to sell shares without respecting pre-emption rights, and threatened complaints to third parties. The judge concluded that this conduct was intended to enable cash withdrawals regardless of the effect on the company’s ability to operate. He found the conduct “burdensome, harsh and wrongful” and held that Mascarenhas was entitled to relief under section 212 of the Companies Act 2014.
The court rejected the respondents’ argument that the claim was barred by the earlier proceedings. It said the central issues arose after the 2017 settlement and that the earlier history was relevant background, not a basis for deciding matters already litigated. The judge also rejected allegations by Karim that Mascarenhas and another company manager had misappropriated funds, finding no credible evidence to support them.
The court did not order the company wound up or require Mascarenhas to sell his shares. Instead, it found the 2017 share purchase agreement valid and set the company’s total value at €464,530. Applying a 15% minority-interest discount to the 57% shareholding produced the €225,065 price. The court said the option period, transfer arrangements and costs remained to be settled after submissions; it contemplated allowing about 14 days for Mascarenhas to decide. If he declined the option, the court said it would consider further orders.
The judgment also set off €40,000 owed to the company by the respondents against €51,000 in gross salary arrears due to Sultana under the agreement, leaving €11,000 gross payable by the company if the share option was exercised. The court left the timing and manner of payment for directions if the option was not exercised.