Sekhametsi Investment Consortium LTD & 6 Others V Thuso Green & 23 Others (CCA/0031/2025) [2025] LSHC 224 (28 August 2025)

# Sekhametsi Investment Consortium LTD & 6 Others V Thuso Green & 23 Others (CCA/0031/2025) [2025] LSHC 224 (28 August 2025) [ __](https://api.whatsapp.com/send?text=https://lesotholii.org/akn/ls/judgment/lshc/2025/224/eng@2025-08-28) [ __](https://twitter.com/intent/tweet?text=https://lesotholii.org/akn/ls/judgment/lshc/2025/224/eng@2025-08-28) [ __](https://www.facebook.com/sharer/sharer.php?u=https://lesotholii.org/akn/ls/judgment/lshc/2025/224/eng@2025-08-28) [ __](https://www.linkedin.com/sharing/share-offsite/?url=https://lesotholii.org/akn/ls/judgment/lshc/2025/224/eng@2025-08-28) [ __](mailto:?subject=Take a look at this document from LesLII: Sekhametsi Investment Consortium LTD & 6 Others …&body=https://lesotholii.org/akn/ls/judgment/lshc/2025/224/eng@2025-08-28) [ Download PDF (421.3 KB) ](/akn/ls/judgment/lshc/2025/224/eng@2025-08-28/source) Report a problem __ * Share * [ Download PDF (421.3 KB) ](/akn/ls/judgment/lshc/2025/224/eng@2025-08-28/source) * * * * * Report a problem __ ##### Sekhametsi Investment Consortium LTD & 6 Others V Thuso Green & 23 Others (CCA/0031/2025) [2025] LSHC 224 (28 August 2025) Copy citation * __Document detail * __Related documents * __Citations 5 / - Citation Sekhametsi Investment Consortium LTD & 6 Others V Thuso Green & 23 Others (CCA/0031/2025) [2025] LSHC 224 (28 August 2025) Copy Media Neutral Citation [2025] LSHC 224 Copy Hearing date 11 August 2025 Court [High Court](/judgments/LSHC/) Court registry [Commercial Division](/judgments/LSHC/LSHC-commercial-division/) Case number CCA/0031/2025 Judges [Mokhesi J](/judgments/all/?judges=Mokhesi%20J) Judgment date 28 August 2025 Language English Summary Read full summary * * * Skip to document content **_IN THE HIGH COURT OF LESOTHO_** **(COMMERCIAL DIVISION)** **HELD AT MASERU CCA/0031/2025** **In the matter between** **SEKHAMETSI INVESTMENT CONSORTIUM LTD 1 ST APPLICANT** **CHAIRMAN SELIKANE SELIKANE 2 ND APPLICANT** **DIRECTOR TŠELISO NTABE 3 RD APPLICANT** **DIRECTOR BORE MOTSAMAI 4 TH APPLICANT** **DIRECTOR TEBOHO LEKALAKALA 5 TH APPLICANT** **DIRECTOR MOHAPELOANE MOHAPELOA 6 TH APPLICANT** **DIRECTOR LEBOHANG MOHAU 7 TH APPLICANT** **AND** **THUSO GREEN 1 ST RESPONDENT** **SASHA MONYAMANE 2 ND RESPONDENT** **MAMORITE PHANGOA 3 RD RESPONDENT** **MALIBE BULANE 4 TH RESPONDENT** **PHAKISO MOCHOCHOKO 5 TH RESPONDENT** **MORAKE RALEAKA 6 TH RESPONDENT** **RANKOBANE MATHULE 7 TH RESPONDENT** **DOMINIC METLAE 8 TH RESPONDENT** **DR. MPHU RAMATLAPENG 9 TH RESPONDENT** **BOITHATELO KHATLELI 10 TH RESPONDENT** **THABO MATŠABA 11 TH RESPONDENT** **THABISO MOHAPI 12 TH RESPONDENT** **VERVE DYNAMICS INCORPORATED** **(PTY) LTD 13 TH RESPONDENT** **AFRI-EXPO TEXTILES (PTY) LTD 14 TH RESPONDENT** **FIRST NATIONAL BANK 15 TH RESPONDENT** **STANDARD LESOTHO BANK 16 TH RESPONDENT** **MONEY MARKET FUND 17 TH RESPONDENT** **CENTRAL BANK OF LESOTHO 18 TH RESPONDENT** **VODACOM LESOTHO (PTY) LTD 19 TH RESPONDENT** **HON MATJATO NEO MOTEANE 20 TH RESPONDENT** **MASTER OF HIGH COURT 21 ST RESPONDENT** **REGISTRAR OF COMPANIES 22 ND RESPONDENT** **COMMISSIONER OF POLICE 23 RD RESPONDENT** **ATTORNEY GENERAL 24 TH RESPONDENT** **_Neutral Citation:_****** Sekhametsi Investment Consortium Ltd & 6 Others v Thuso Green & 23 Others [2025] LSHC 224 Comm. (28 AUGUST 2025) **CORAM: MOKHESI J** **HEARD: 11 AUGUST 2025** **DELIVERED: 28 AUGUST 2025** **_SUMMARY_** **Company Law:**_Members of the board of directors of a company suing to contest their removal on the basis that their removal was not on the agenda- Court having found that their removal was on the agenda dismissed their application- The applicants further seeking to cancel the contracts the company concluded with the third parties without following the prescripts of section 77 of the Companies Act 2011- The court dismissed the application on this basis as well- Use of intemperate language and hurling accusations of criminality against individuals without conclusive proof was met with an award of punitive costs._ **Annotations** **Legislation** _Companies Act 2011_ _Companies Regulations, 2012_ **Cases** **Lesotho** _Abia Taxi Association & others v Abia Taxi Association Committee (New Alleged _ _Buang Mohau and Another v SM Consulting Engineers [2025]_ _Committee) & Others (CIV/APN/151/2021)_ _CGM Industrial (Pty) Ltd and Another v Madhav Vasant Dalvi & 14 Others [[2023] LSHC 143](/akn/ls/judgment/lshc/2023/143) Comm_ _Commander Lesotho Defence Force & Another v Sekoati LAC (2007-2008)_ _Kelebone Ratšiu v Principal Secretary: Ministry of Forestry C of A (CIV) No. 9/2017_ _Linake & Another v Chairman of the Board; Naledi Funeral Planners (Pty) Ltd [[2022] LSHC 145](/akn/ls/judgment/lshc/2022/145) Comm_ _Ministry of Public Works and Transport and Others v Lesotho Consolidated Civil Contractors LAC (2013-2014)245_ _Mpobole v Letao and others LAC (2011-2012) 417_ _The Board of Directors, Lesotho Electricity Company (Pty) Ltd v Ministry of Energy & 10 others (CIV/APN/0216/2024) [[2025] LSHC 3](/akn/ls/judgment/lshc/2025/3)_ _Thuto Ntšekhe v Public Service Tribunal and others C of A(CIV) 11/19_ **South Africa** _Gool v Minister of Justice [1955] 3 ALL SA 115 (C)_ _Johannesburg Consolidated Investment C. Ltd v Johannesburg Town Council 1903 T.S 111_ _Maharaj and others v Mandag Centre of Investigative Journalism NPC and others 2028 (1) SA 471 (SCA)_ _Ntombela and others v Shibe and others 1949 (3) SA (N.P.D) 586_ _Setlogelo v Setlogelo 1914 AD 221_ _Suzman Foundation v Judicial Service Commission 2017 (1) SA 367 (SCA)_ _Webster v Mitchell 1948 (1) SA 1186 (W)._ **UNITED KINGDOM** _Ernest v Nicholls (1857) 6 HL Cas 401_ _Royal British Bank v Turguand (1856) 6 E & B 327_ **** **_JUDGMENT_** [1] **Introduction.** This matter is concerned with two applications: the main application and counter application. At the core of each application is the determination of a singular and most important issue of the propriety of voting out the board of directors which comprised of the 2nd to 7th applicants and voting in the 1st to 7th respondents as the new directors of Sekhametsi Investment Consortium Ltd. This necessarily implicates determining whether this exercise was done in conformity with the provisions of Section 73 (1) of the Companies Act 2011 (“The Act”). There are other incidental issues which I deal with in the course of this judgment. [2] **Background facts.** Sekhametsi Investment Consortium (“Sekhametsi or SMIC”) is a Company registered as a public company in terms of the Act read with Companies Regulations, 2012. On 03 April 2025 the 2nd applicant who was the Chairman of the board of Sekhametsi notified its shareholders about a special general meeting to be held on 04 May 2025. Two issues were to form the subject matter of that meeting, namely, (a) to engage shareholders and to finalize the strategic plan that would be presented at the meeting, and (b) additional briefing on Khubetsoana Lifestyle Centre (KLC) project. The notice further informed the shareholders that a second special general meeting would be held on 01 June 2025 whose sole purpose would be, (a) to engage shareholders on the situation analysis of SMIC since the directors assumed office, and (b) policies, including the standard operating procedures. [3] On 09 April 2025, the 9th respondent as a shareholder and acting on behalf of twenty-one shareholders requisitioned inclusion on the agenda of the special meeting to be held on 04 May 2025, the removal of all the board members. The directors to be removed were Messrs Selikane Selikane (Chairman), Tšeliso Ntabe, Rankobane Mathule, Motsamai Bore, Teboho Lekalakala, Mohapeloane Mohapeloa and Lebohang Mohau. The reasons motivating the requisition for their removal were articulated in the request. It is common cause that this group of requisitioning shareholders represented not less than twenty percent (20%) shareholding in Sekhametsi. Among the reasons advanced were that the board ignored the resolutions which were made in the previous annual general meeting of the shareholders. A further contention of the discontented shareholders was that, against the resolution made at the annual general meeting, the board brought Mr Leabua Makhate into its fold, and further that contrary to the resolutions of the shareholders in the said annual general meeting the entire board continued to exercise managerial and executive powers with the result that they failed to fill up managerial positions including the position of the Chief Executive Officer. [4] On 22 April 2025 the 2nd applicant wrote back to the requisitioning shareholders raising a number of issues including the propriety of requesting the inclusion of the removal of the board on the agenda of the scheduled special meeting to be held on the dates mentioned above. In material and relevant respects, the letter was couched as follows: _“The board welcomes the shareholders inputs and depth of information to be discussed with them when it called the Special Shareholders’ Meetings. The board found that such meeting cannot effectively be done in one day. It was found appropriate to have the meetings in two days, that is why the Board will convene them on 04 May and 1 June 2025. That being the reality, it is not possible to accommodate any additional item(s) on the agenda in the Board proposed date._ _The point to be considered is that each Special Shareholders’ Meeting is proposed to discuss the agenda for which it is called. That being the case it will not be proper to shift or add to the agenda and/or substitute it with the items that your esteemed letter proposes. The Special Shareholders’ meetings are called in accordance with Section 50(1) – (4) of the Companies Act; and we must therefore adhere to requirements of the law.”_ [5] The requisitioning shareholders did not take the Chairman’s rebuff of their proposal lying down. They penned another letter on 29 April 2024 to insist that the removal of the board be included as the agenda item in the proposed special meetings. They re-stated the reasons why they fervently sought to have the board removed. On 30 April 2025, the 2nd applicant wrote a letter to the shareholders informing them that the special meeting which was scheduled to be held on 04 May 2025 had been postponed to 01 June 2025. The letter in relevant and material parts stated that: _“RE: Postponement of Sekhametsi Investment Consortium Special Shareholders’ meeting of 04 May 2025._ _The Board of Directors of Sekhametsi Investment Consortium Ltd (SMIC) received in addition to the letter of 09 April 2025, two communications sent on 29 April 2025 in relation to the proposed inclusion of additional agenda items for the Special Shareholders’ Meeting that was planned for 04 May 2025. The letter of 29 April 2025 is attached. The other is an email message sent on the same day which proposes a ballot paper, intended for use in this meeting of 04 May 2025._ _The Board would like to prepare a detailed response to the letters of April 2025 and 29 April 2025. This will also provide an opportunity for all shareholders to decide on the special shareholders’ meeting agenda and the way forward on the directorship of the company in line with Section 73 of the Companies Act. The Board will only then be able to prepare appropriate pack for the meeting and circulate on time._ _Based on the above all the SMIC shareholders are kindly informed that the meeting of 4 May 2025 is postponed to 1 June 2025. The meeting will be held at Manthabiseng Convention Centre from 9.00 am.”_ [6] On 11 May 2025 the same shareholders wrote to the board replying to the above letter, and in it, they insisted on the inclusion on the agenda of the special meeting to be held on 1 June 2025, the removal of the board. On 22 May 2025 a special board meeting was held, and on 23 May 2025, following this board meeting, the shareholders were informed that the meeting which was initially scheduled for 04 May 2025 would be held on 01 June 2025. The board informed the shareholders that the meeting would discuss the SMIC strategic plan and provide update on the Khubetsoana Lifestyle Centre Project, policies and provision of situational analysis of SMIC for the period covering the incumbency of the board. Further, and more importantly, the shareholders were informed that: _“The Board has decided that the meeting of 1 June 2025 will discuss communications from the concerned shareholders and thereafter strategic plan will be tabled. All other items that were intended for discussion will be dealt with in some other meeting which will be convened during July or August 2025. The exact date of the meeting will be communicated.”_ [7] Item 5 on the agenda for 1 June 2025 special meeting was _“concerned shareholders letters on inclusion of additional agenda items.”_ On 01 June 2025 the meeting proceeded as scheduled. The shareholders agreed after much debate, that voting on whether to remove the board be undertaken. The shareholders ultimately decided that voting on the issue of the removal of the board be undertaken, and it was undertaken culminating in the removal of the applicants and appointment of the 1st to 7th respondents. At the meeting the shareholders who were physically present voted by casting their ballots and some of those who were absent voted through proxies. Those who were virtually present in the meeting voted through arrangements which were made in the meeting. The 2nd to 7th applicants participated in the meeting of 01 June 2025. [8] On 04 June 2025 the 8th respondent who was chairing the special meeting communicated through the email with the 12th respondent who is the secretary of the board, directing him to publish the voting results to all Sekhametsi shareholders. The 12th respondent duly obliged and further informed the shareholders that a new special meeting would to be convened on 15 June 2025 for introduction of the new board and for handing-over exercise by the outgoing board. [9] In the wake of this voting process, the applicants instituted the main application seeking a raft of interim reliefs which were rejected by this court. Only a prayer on urgency was granted and the matter was re-scheduled for hearing. Because it was evident that the 13th and 14th respondents were not served when it was clear that a relief was sought against them, I directed that they be served. On 30 June 2025 Advocate Lephuthing informed the court that they were served and that they were not opposing the matter. It came as a surprise when Mr Kleingeld filed notice of intention to oppose the matter. At the hearing of the matter on 11 August 2025 he informed the court that both Mr Letsika for the 1st to 7th respondents and Advocate Lephuthing were aware that the 13th respondent is participating in the proceedings as he exchanged with them its notice of intention to oppose the matter and the answering affidavit. What had become apparent again is that Mr Letsika’s and Advocate Lephuthing did not reply to the 13th respondent’s answering affidavit. Advocate Lephuthing’s gripe with the 13th respondent’s answering affidavit was that the annexures it referred to were not annexed. I directed that the matter proceeds and Mr Kleingeld to furnish Mr Lephuting with the missing annexures later as it became clear to the court and all counsel that prayer 6 involved a narrow issue of procedure for shareholders to follow if they are desirous of bringing proceedings on issues affecting the company. This issue could be argued and determined without those annexures. Mr Kleingeld was only to deal with Prayer 6 in the main application which seeks an order “declaring that the investment contract between the 1st Applicant, 13th and 14th as _void ab initio_ and unenforceable.” I deal with this issue in due course. The 1st to 7th respondents filed their answering affidavits and went further to lodge a counterapplication which essentially seeks to affirm their position as the newly appointed board and other incidental relief. Basically, this counterapplication turns on the same set of facts as the main application. I now turn to deal first with the reasons for rejecting the interim reliefs which were sought by the applicants in the main application, but before I do that, I deal with the issue of misjoinder of Sekhametsi in these proceedings. [10] **Propriety of joining Sekhametsi** **** The applicants in the main, as stated already, are contesting their removal as board members, but they have joined Sekhametsi in the proceedings. I took Advocate Lephuthing to task on this issue, and he did not seem to have any convincing explanation for this other than to say that Sekhametsi has been properly joined. The 2nd to 7th applicants are suing in their personal capacities as board members to contest their removal. There is therefore no reason why they joined Sekhametsi in these proceedings. It is beyond any doubt that the application is about the directors vindicating their own personal rights as can be gleaned from the company resolution which is annexed to the founding papers – assuming they were entitled to sit as the board. The said resolution reads as follows (in relevant parts): _“**The Board resolved as follows:**_ 1. _Upon consideration, knowledge and confirmation on 12 June 2025 that there is an urgent need to review the proceedings of the special general meeting, EGM, which seem not to have followed the meetings requirements as stipulated in the company’s Act resolved to appoint Advocate Lephuthing to provide legal opinion on the matter and further represent SMIC in the following prayers._ 2. _Interdict cancelling the proceedings of the special general meeting held on 1 st June 2025 which should recover when the forensic audit process has been concluded. (sic) _ 3. _Interdict the so-called Board from claiming to represent SMIC._ 4. _Stop the planned meeting of 15 th June 2025 at Avani, Maseru._ 5. _Interdict the company registrar from registering new directors and remove Sir Sasha Monyamane as a Board Director following her resignation_ 6. _Direct all subsidiaries and associated companies not to accept any deplores by the current so-called Board._ _It is certified by the undersigned that the SMIC Board of Directors duly passed the above-mentioned resolution on 12 th June 2025.”_ [11] They should not have joined Sekhametsi in these proceedings**(The Board of Directors, Lesotho Electricity Company (Pty) Ltd v Ministry of Energy & 10 others (CIV/APN/0216/2024) [2025] LSHC 3 (4 February 2025) **at paras. 20-21). A person who gets elected into office of a voluntary association or a company in this case, and who claims that someone wrongfully usurps or interferes with his exercise of the powers bestowed on him by virtue of being elected, or that he was unprocedurally removed from office, sues in his personal capacity because the right to sue to protect his incumbency is personal and has nothing to do with the company or the association. This point was made in **Abia Taxi Association & others v Abia Taxi Association Committee (New Alleged Committee) & Others (CIV/APN/151/2021) **at para. 10 where I quoted with approval the decision in **Ntombela and others v Shibe and others 1949 (3) SA (N.P.D) 586** at p.p 587-588**** where it was stated that: _“…. In my view, if a person is elected to an office under the constitution of a voluntary association like a church or club, his right to the office is a personal one and, if someone wrongfully usurps the office and prevents the holder of it from performing his functions, the right of the holder is a personal one against the usurper, and he must sue as an individual. Similarly, where there are a number duly elected officers who in combination have the right to conduct the affairs of association, then if their offices are usurped by other individuals who wrongfully claim to hold the offices and wrongfully conduct the affairs of the association, the rights which have been infringed are personal rights, and legal proceedings are properly taken by the persons concerned, as individuals. If Mr. Macaulay’s argument were right, the court would have to insist upon the plaintiffs suing in their capacity as officials and, a such representing the church. But that procedure would get the plaintiffs no distance because at the threshold of the case it would assume, as having been settled in favour of the plaintiffs, the very issue which the action is designed to decide, namely whether the plaintiffs or the defendants are the persons properly in power ….”_ [12] **Reasons for rejecting interim reliefs:** The applicants had sought interdicts against the newly – appointed board from holding itself out as the new board and from entering into any transaction, and further an order to the Commissioner of Police to investigate a case which was reported to the police regarding the alleged break-in which happened at Sekhametsi offices. In applications for an interdict _pendente lite_ the applicant must establish the following requirements: 1. That the right which he/she seeks to protect which is the subject matter of the main case, is clear, or if not, is _prima facie_ established, though open to some doubt; 2. That if the right is established _prima facie_ , there is a well-grounded apprehension of irreparable harm if the interim interdict is not granted and it ultimately succeeds in establishing its clear right; 3. That the balance of convenience favours the granting of the interim relief; and 4. That the applicant has no other satisfactory remedy. [13] Even if the applicant succeeds in establishing all the above requisites the court retains a discretion whether to grant the interim interdict (**Setlogelo v Setlogelo 1914 AD 221).** The approach to enquiry into _prima facie_ right in proceedings of this nature was articulated in two cases; **Webster v Mitchell 1948 (1) SA 1186 (W)**at 1189-1190 and**Gool v [1955] 3 ALL SA 115 (C) –** These decisions were followed in**Motlatsi Mofokeng v Commissioner of Police and Others (CIV/APN/375/2020)[[2021] LSHC 40](/akn/ls/judgment/lshc/2021/40) (22 April 2021). **In **Webster v Mitchell (above)** at 1189 it was stated that: _“In the grant of a temporary interdict, apart from prejudice involved, the first question for the Court in my view is whether, if interim protection is given, the applicant could ever obtain the rights he seeks to protect. Prima facie that has to be shown. The use of the phrase “prima facie established though open to some doubt” indicates I think that more is required than merely to look at the allegations of the applicant, but something short of a weighing up of the probabilities of conflicting versions is required. The proper manner of approach I consider is to take the facts as set out by the applicant, together with any facts set out by the respondent which the applicant cannot dispute, and to consider whether, having regard to the inherent probabilities, the applicants could on those facts obtain final relief at a trial. The facts set up in contradiction by the respondent should then be considered. If serious doubt is thrown on the case of the applicant he could not succeed in obtaining temporary relief, for his right, prima facie established, may only be open to “some doubt.”_ [14] In **Gool v Minister of Justice**(above)**** at p.688D-E a refinement of the test was made: _“With the greatest respect, I am of the opinion that the criterion prescribed in this statement for the first branch of the inquiry thus outlined is somewhat too favourably expressed towards the applicant for an interdict. In my view the criterion on an applicant’s own averred or admitted facts is: should (not could) the applicant on those facts obtain final relief at the trial. Subject to that qualification I respectfully agree that the approach outlined in Webster v Mitchell, supra, is the correct approach for ordinary interdict application.”_ __ [15] I did not think that the applicants succeeded in establishing even a _prima facie_ right which needs protection pending finalisation of the main matter, which otherwise would be irreparably damaged or harmed unless the interim interdict was granted. In the present matter the applicants are seeking to interdict a board which was elected after shareholders had voted at the Special General Meeting. This voting was conducted after the shareholders resolved to include on the meeting’s agenda the vote on the removal of the directors. When these common cause facts are considered, I found that the applicants should not succeed in obtaining a final relief when the main matter is ultimately determined. The applicants did not therefore have any right of incumbency to protect. It is therefore unnecessary to consider other requirements of the interim interdict because the applicants have not established at least a _prima facie_ right which needs protection. The issue of their removal will be dealt with in more detail in due course. [16] **An order against the police to investigate alleged crime** **** This order is unenforceable. The court does not have power to order the police to investigate crime. The fact that the order is unenforceable is the reason it was not granted (**Kelebone Ratšiu v Principal Secretary: Ministry of Forestry C of A (CIV) No. 9/2017****(7 December 2018)** at para. 10).**** I now turn to deal with merits of the case. [17] **The Merits.** The final reliefs which are sought by the applicants are sought by the applicants are couched as follows: _“3. That it be declared that the decisions arising outside the scope of the agenda approved on the shareholders’ meeting of 01 st June 2025 be declared null and void. Costs of suit on Attorney ad own client scale;_ _4\. An order interdicting Thuso Green and his group from holding themselves as the new Board of 1 st Applicant;_ _5\. It be declared that the email communication of Thabiso Mohapi directed at shareholders dated 13 th June 2025 is null and void._ _6\. An order declaring that the investment contract between the 1 st Applicant, 13th and 14th as void ab ignition and unenforceable._ _7\. Costs of suit on an attorney and own client scale.”_ [18] **Was the appointment of the new board done procedurally in terms of Section 73 (1) of the Act?** **** Shareholders’**** Special meetings are called in terms of Section 50(1) and Section 73(1). They are called in terms of Section 73 when the agenda includes the removal of the director, or the removal of the director is the sole agenda of the meeting. Section 50 provides: **_50\. Special meetings of shareholders_** _“(1) A special meeting of shareholders entitled to vote on an issue may at any time be called by_ the _board or any other person authorised to do so by the articles of incorporation to consider the issue._ _(2) A special meeting shall be called by the board on the written request of shareholders holding shares totalling not less than 5 percent of the voting rights entitled to be exercised on the issue.”_ [19] Section 73 provides “** _73\. Removal of directors_** _(1) A board of directors shall call a special meeting for the purpose of removing one or more directors upon receiving a written request signed by shareholders whose shares represent not less than 20 percent of the issued shares entitled to vote and the request shall name each director whose removal is sought and the reasons for such removal by the shareholders._ _(2) Subject to subsection (3) and the articles of incorporation, a director of a company may be removed from office by ordinary resolution passed at a special meeting called for the purpose**or for purposes that include the removal of the director.**_ _(3) Where the articles of incorporation provide for cumulative voting for directors, a director may be removed from office only by special resolution passed at a special meeting called for the purpose or for purposes that include the removal of that director._ _(4) If the removal of two or more directors is to be considered at the special meeting, voting on each director's removal shall be conducted by separate poll.” (emphasis added)_ [20] In terms of Section 73, where a special meeting called to transact other business shareholders whose shares represent more than 20 percent of the issued share entitled to vote may requisition the removal of the director as the agenda to be included the already set agenda of the special meeting. **Linake & Another v Chairman of the Board; Naledi Funeral Planners (Pty) Ltd [2022] LSHC 145 Comm. ****(27 October 2022).** It is important that cognizance is taken of the use of the word “shall’ in Section 73(1). The use of this word is indicative of a peremptory meaning. Once the requisition for a special meeting to remove a director is made and is in order, in terms of this section the board has no choice but to call such a meeting. This is equally so even when the special meeting has been called to deal with other matters not involving the removal of directors, once a requisition is made to include in the agenda items the removal of directors, the board has no choice but to oblige. To interpret this section otherwise, as Advocate Lephuthing, for the applicants, sought to do urge this court to do, would be to sow the seeds of chaos, create room for manipulation by the incumbent board to avoid the voting being made to remove them. This would thwart the intention of the legislature if the board would act as gatekeepers of whether to call a meeting which would in essence be aimed at ensuring that they are accountable to the body of the company’s shareholders. [21] In the present matter, as already stated in the background facts to the case, after much back and forth correspondence between the requisitioning shareholders – whose request was proper in terms of section 73 – , on 23 May 2025, the board notified the shareholders that the meeting which was initially scheduled for 04 May 2025 would be held on 01 June 2025 _“will discuss the communications from the concerned shareholders….”_ And, on the agenda, which was circulated to the shareholders, agenda item No.5 was _“concerned shareholders’ letters on inclusion of additional agenda items.”_ It should be recalled that in a letter of 30 April 2025 notifying of the postponement of a special meeting to be held on 04 May 2025 to 01 June 2025, which was addressed to all the shareholders, the requisitioning shareholders’ letter was attached. The shareholders were fully aware of the requisition for the inclusion on the agenda, the removal of the board. In fact, it will be recalled that in the same letter the 2nd applicant cited as the reason for such a postponement: _“The Board would like to prepare a detailed response to the letters of April 2025 and 29 April 2025. This will also provide an opportunity for all shareholders to decide on the special shareholders meeting agenda and the way forward on the directorship of the company in line with Section 73 of the Companies Act ….”_ [22] As can be observed, the board responded to the request to include their removal as an agenda item in a rather unorthodox manner: instead of including their removal as an agenda item, it left it in the hands of the shareholders to make that decision. As it turned out, on the fateful day, the shareholders decided that the removal of the directors be part of the agenda, and they consequently removed them through the ballot. The 2nd to 7th applicants participated in the proceedings. It was only after they were voted out that they began in earnest and feverishly to cry foul. I agree with Mr Letsika’s – for the 1st to 7th respondents – submission that the agenda included the removal of the directors. It is common cause that the “concerned shareholders” letter detailed transgression against the directors on the basis of which they sought their removal. There are no shareholders who are complaining that they were not aware of the contents of the letter of the requisitioning shareholders. Evidently, the board and the whole body of shareholders were aware that the latter would have to decide on the removal of the board being placed on the agenda of the meeting, and that the board would then make a case for their retention. The argument on which the application is based, that is, that the removal of the directors was not on the agenda, is therefore baseless. [23] **Prayer 6 on the declarator that the contract between Sekhametsi and the 13 th and 14th respondents be declared unenforceable:** In terms of this prayer, the applicants (2nd to 7th) are in essence seeking to review or to cancel a contract which was concluded between Sekhametsi and 13th and 14th respondents. Mr Kleingeld for these respondents dealt with the issue from the perspective of the principle espoused in **Royal British Bank v Turguand (1856) 6 E & B 327****.** This case espoused a principle which protects _bona fide_ third parties who are not aware of internal irregularities of the company that affect the validity of the contract they concluded with such a company, provided they acted in good faith. This principle is an exception to the doctrine of constructive notice which deemed a third party who is dealing with a company to be aware of the company’s constitution and other documents that were lodged with the Registrar of Companies on registration (See **Ernest v Nicholls (1857) 6 HL Cas 401).** [24] Advocate Lephuthing on the other hand argued that Sekhametsi being a public company, an argument he persisted upon - despite repeated expressions of doubt from the court that these remedies can be invoked in the present matter- that the shareholders are entitled to invoke public law remedy of review in this case. He cited the case of **Thuto Ntšekhe v Public Service Tribunal and others C of A(CIV) 11/19****(01 November 2019)** which in turn relied on the South African case of **Suzman Foundation v Judicial Service Commission 2017 (1) SA 367 (SCA)** to support his argument. [25] I do not think that I should deal with any of these two legal perspectives as I think the answer to the anterior question lies elsewhere, and that is in section 77 of the Act which deals with derivative actions. The said section provides that: **“77. Derivative action** _(1) Subject to subsection (2), a shareholder or director of a company may apply to Court for leave to bring proceedings in the name and on behalf of the company or a related company, or intervene in proceedings to which the company or a related company is a party, for the purpose of continuing, defending or discontinuing the proceedings on behalf of the company or related company._ _(2) Without limiting subsection (1), in determining whether to grant leave, the Court shall have regard to—_ _(a) the likelihood of the proceedings succeeding;_ _(b) the costs of the proceedings in relation to the relief likely to be obtained;_ _(c) any action already taken by the company or related company to obtain relief; and_ _(d) the interests of the company or related company in the proceedings being commenced, continued, defended, or discontinued, as the case may be._ _(3) An application for leave to bring proceedings or intervene in proceedings shall be granted only if the Court is satisfied that—_ __ _(a) the company or related company does not intend to bring, diligently continue, defend or discontinue the proceedings; or_ _(b) it is in the interests of the company or related company that the conduct of the proceedings should not be left to the directors or to the determination of the shareholders as a whole._ _(4) Notice of application shall be served on the company or related company, which may appear and be heard and shall advise the Court whether or not it intends to bring, continue, defend, or discontinue the proceedings._ _(5) Where leave is granted under this section on the application of the shareholder or director to whom leave was granted to bring or intervene in the proceedings, the Court shall—_ _(a) make an order authorising the shareholder or any other person to control the conduct of the proceedings;_ _(b) give directions for the conduct of the proceedings;_ _(c) make an order requiring the company or the directors to provide information or assistance in relation to the proceedings;_ _(d) make an order directing that any amount ordered to be paid by a defendant in the proceedings shall be paid, in whole or in part, to former and present shareholders of the company or related company; or_ _(e) make an order that the whole or part of the reasonable costs of bringing the action or intervening in the proceedings including any costs relating to any settlement, compromise or discontinuance be borne by the company, unless the Court is of the opinion that it would be unjust or inequitable for the company to bear the costs._ _(6)**Unless otherwise provided in this section, a shareholder shall not be entitled to bring or intervene in any proceedings in the name of, or on behalf of a company or a related company.”(** emphasis added)_ [26] This section abolishes and substitutes the right of any person at common law to lodge proceedings other than the company itself, in order to protect its interests except when such persons do so in comfort with this section. As I stated in **CGM Industrial (Pty) Ltd and Another v Madhav Vasant Dalvi & 14 Others [[2023] LSHC 143](/akn/ls/judgment/lshc/2023/143) Comm. (14 September 2023) **at para. 6: _“Derivative action is brought by a person to protect the company from the wrongs of those in its control, and thus to protect its legal interests. When derivative action was coined by the courts, it was meant to be an exception to the general principle of our company law that the company is the “proper plaintiff” to sue to protect its own legal interests (Foss v Harbottle (1843)2 Hare 461, 67 ER 189). This section abolishes and substitutes the right of any person at common law to lodge proceedings other than the company itself where its legal interests are at stake and in need of protection. The section allows certain designated groups of persons to bring derivative action namely: directors or shareholders. The director or shareholder will only succeed to bring derivative action if the company does not bring the claim itself. The first step to bringing derivative action is to seek leave to bring derivative action.”_ [27] On the procedural aspect of bringing derivative action, in the above case at para. 8, I stated that the proper procedure for bringing derivative action is for the shareholder or director to apply for leave to bring proceedings on behalf of the company or in its name, and for such a person to cite himself or herself as the applicant and the company as the respondent _“[t]he reason for [this] is so that the company will be bound by the judgment and be in a position to receive the benefits of the said judgment.”_ [28] In the present case the applicants who are shareholders of Sekhametsi did not follow this basic procedural threshold to seek a declaration that a contract which was concluded between Sekhametsi and the 13th and 14th respondents be null and void and unenforceable. It follows that it is not open to these applicants to seek this relief – if it is tenable – without first following the prescripts of Section 77 of the Act. Sekhametsi is the proper plaintiff to seek whatever remedy it may seek against the parties it has concluded agreements with, not its shareholders or directors. As I understand it the applicants have been Sekhametsi shareholders for quite a long period, and one would assume that they were fully aware that the company was about to enter into this transaction in 2022. If the transaction contravened Sekhametsi’s articles of incorporation or the Companies Act - if that is their argument- it would have been open to them to interdict the proposed transaction in terms of Section 76 of the Act. This they did not do, only to vociferously spring into action in 2025 once they have been removed as directors. [29] Before I close curtains on this case, I deem it necessary to jettison Advocate Lephuthing’s quite anomalous proposition that public law remedies can be invoked by the shareholders of the company to cancel the agreement it concluded with third party companies. In **Buang Mohau and Another v SM Consulting Engineers[[2025] LSHC 120](/akn/ls/judgment/lshc/2025/120) Comm. (30 May 2025**) where**** the applicants invoked public law remedies to challenge termination of their contracts as independent contractors, I dismissed the application by following the decision in **Ministry of Public Works and Transport and Others v Lesotho Consolidated Civil Contractors LAC (2013-2014)****245** and stated the following at paras. 7 and 8 of the judgment. _“[7]**(i) Application of the public law principles to private arrangement between the parties.**_ **__**_Evidently, the applicants are seeking a review of the decision to terminate their contracts. Their cases are based on the argument, as already stated above, that they are terminated without being given a hearing and without being given reasons for termination. At this point it is important that a distinction between private and public law is understood and maintained as it will inform the appropriate remedy to be sought by the litigant when need arises. This dichotomy was aptly captured by the learned authors L. Boulle, B. Harris, and C. **Hoexter _, Constitutional and Administrative Law Basic Principles_ , Cape Town, Juta and Co. Ltd (1989), **p.p. 246-247:_ _“As a general rule, the doing of private individuals and organisations are not reviewable by courts of law, while those of ‘public bodies are … By contrast, private bodies and individuals acting in terms of their private rights have far more freedom to do as they please.”****_ _[8] Public bodies by their nature exercise public power and are subject to exacting standards to act fairly as they exercise their powers in the public interest and public good, which powers are conditioned by the common law and the statutory context and strictures for their exercise. On the other hand, within private arrangement or ordering, the parties only have to source authority for their actions from the terms of their agreement, whether express or implied. The Court of Appeal in the case of**Ministry of Public Works and Transport v Lesotho Consolidated Civil Contractors LAC (2013-2014) 245**at para.8 recognised and reinforced this dichotomy when it stated that the rules of natural justice were inapplicable because:_ _“… When terminating the contract, the appellants were not performing a public duty or implementing legislation; they were purporting to exercise a contractual right founded on the consensus of the parties in respect of a commercial contract. The principles of natural justice accordingly had no application.” See**Cape Metropolitan Council v Metro Inspection Services CC 2001 (3) SA 1013 (SCA)** at 1023 para.18).”_ [30] Sekhametsi is a private entity and not a public body whose actions are reviewable in the manner envisaged in**Johannesburg Consolidated Investment C. Ltd v Johannesburg Town Council 1903 T.S 111** at 115. The fact that it is a public company within the meaning of the Companies Act read with Companies Regulation 2012 does not make it to be performing a public duty or to be implementing legislation as to render its exercise of its powers to be reviewable. Its designation as the public company is relevant in so far as it relates: 1. to inviting member of the public to subscribe for shares and debentures 2. publishing of prospectus 3. right to transfer shares 4. it has more than 50 members. [31] **Costs.** The above conclusion points ineluctably to this case meriting dismissal with costs, but as to what scale of costs, is a matter to which I divert my attention. The award of costs falls within the exercise of judicial discretion even though as a matter of principle, costs should follow the event. Punitive costs on the other hand are awarded based on the circumstances of the case which cry out for them (**Commander Lesotho Defence Force & Another v Sekoati LAC (2007-2008) ****308 at 309-310).** Some of the circumstances which the courts have adjudged to call for imposition of punitive costs are use of intemperate language and making conclusions that people have committed crimes with no conclusive evidence being adduced. [32] The police have been accused of being partisan without any evidence being adduced. The applicants accuse 11th respondent and 20th respondent of corruption. The applicants further accuse 11th respondent of fraud. But is clear that they do not have evidence of the alleged crime because they go on to say that _“the Director of DCEO is empowered to require all persons implicated in these shady deals within a specified time, to provide any information or to answer any questions in connection with questionable payments made to the above companies.”_ They are merely being speculative hence they invite the court to order the police to investigate the alleged crimes. It is common knowledge that investigation may reveal involvement or non-involvement of a person in the alleged crime. [33] The 7th respondent is accused of breaking into the offices of Sekhametsi, but again no evidence is adduced to prove this. To throw into motion proceedings speculative jibes about people’s involvement in crimes is quite problematic. It is perfectly understandable why the applicants would find it difficult to provide conclusive evidence of accusations of criminality because motion proceedings are not suitable for establishing such serious allegations. As was stated in **Maharaj and others v Mandag Centre of Investigative Journalism NPC and others 2028 (1) SA 471 (SCA)****** at para. 17: _“A clear factual basis must be laid to support an allegation of criminal conduct. It is not sufficient merely to put up speculative propositions or advance arguments on probabilities that might be suggestive of the commission of a criminal offence. As long ago as 1939, Watermeyer JA put the position thus in**Gates v Gates:**___ _‘_ _Now in a civil case the party, on whom the burden of proof (in the sense of what Wigmore calls the risk of non-persuasion) lies, is required to satisfy the court that the balance of probabilities is in his favour, but the law does not attempt to lay down a standard by which to measure the degree of certainty of conviction which must exist in the court’s mind in order to be satisfied. In criminal cases, doubtless, satisfaction beyond reasonable doubt is required, but attempts to define with precision what is meant by that usually lead to confusion. Nor does the law, save in exceptional cases such as perjury, require a minimum volume of testimony. All that it requires is testimony such as carries conviction to the reasonable mind._ _It is true that in certain cases more especially in those in which charges of criminal or immoral conduct are made, it has repeatedly been said that such charges must be proved by the “clearest” evidence or “clear and satisfactory” evidence or “clear and convincing” evidence, or some similar phrase. There is not, however, in truth any variation in the standard of proof required in such cases. The requirement is still proof sufficient to carry conviction to a reasonable mind, but the reasonable mind is not so easily convinced in such cases because in a civilised community there are moral and legal sanctions against immoral and criminal conduct and consequently probabilities against such conduct are stronger than they are against conduct which is not immoral or criminal.’”_ [34] There is one thing which crowns the above behaviour of the applicants, and which is quite worrying. The applicants were very casual with unnecessarily joining parties in these proceedings whether as applicants or respondents. Sekhametsi was joined as the applicant when what the applicants are pursuing are personal claims or rights. Central Bank and commercial banks were not spared, and other parties which are unnecessary to list as can be seen from the case citation. No reliefs are sought against these parties. It is important for counsel and litigants to heed the following remarks which were made in **Mpobole v Letao and others LAC (2011-2012) 417**at 422 H-I: _“The joinder of a person in High Court proceedings is a serious matter and should only be resorted to after the basis for such joinder has been carefully considered. It seems to clear that the mistake the appellant made by citing the second respondent was attributable to his lack of care in the regard…”_ The cumulative effect of all these factors warrants the imposition of punitive costs on the applicants (2nd to 7th). [35] **Counter application** The conclusion I reached on the main application _ipso facto_ leads to the counterapplication succeeding with costs. [36] In the result the following order is made: 1. The main application is dismissed with costs on attorney and client scale, which costs should be payable by 2nd to 7th applicants. 2. The counterapplication succeeds with costs. **________________________** **MOKHESI J** **For the 2 nd to 7th Applicants in the main Application** **And for the 2 nd to 7th Respondents in the counter** **Application Adv. C. J Lephuthing** **For the 1 st to 7th Respondents in the main Application** **And for the 1 st and 7th Applicants in the counter ** **Application Mr. Q. Letsika** **For 8 th and 12th Respondents in the main ** **Application Adv. Phafane KC** **** __ #### __Related documents ▲ To the top >