Meikles Wrangles: Court Denies Stay Application Against EGM Resolutions

HARARE – The High Court dismissed an application seeking to stay the implementation of resolutions passed during an Extraordinary General Meeting (EGM) held by Meikles Limited on December 18, 2024.

The applicant, Stewart Phillip Cranswick, a minority shareholder in Meikles, argued that the resolutions passed at the EGM were enacted through procedural irregularities and could potentially harm the company and its minority shareholders. Cranswick was one of the non-executive directors targeted for removal alongside Simon Hammond, Rugare Chidembo and James Mushore.

Cranswick noted that he did not attend the meeting but was reliably informed that the meeting was marred by procedural irregularities. For instance, it was a virtual meeting where some of the microphones were muted, preventing some board members from contributing to the discourse and, more importantly, to the critical decisions concerning the company.

The respondents were Meikles, Meikles Consolidated Holdings (Private) Limited, chairman John Ralph Thomas Moxon, the Zimbabwe Stock Exchange and the Securities and Exchange Commission of Zimbabwe.

The application also raised concern over the potential disposal of the company’s assets, underscoring the legal principle that major decisions—such as selling or disposing of important assets—require shareholder approval.

Cranswick also requested that the execution of the resolutions passed during the EGM be halted until the court resolves a related case (HC 5846/24). This would mean that any decisions or actions stemming from the EGM would not take effect until the legal questions surrounding the legitimacy of those resolutions could be fully assessed and resolved in court.

However, respondents, including the second and third directors of Meikles Limited and Meikles Consolidated Holdings, argued that the EGM complied with necessary regulations and that any fears concerning the resolutions were unfounded. They maintained that the directors could not dispose of the company’s major assets without shareholder approval, a provision that the court acknowledged as a protective measure for the company’s interests.

In the judgment issued on February 4, Justice Esther Maremba noted that Cranswick raised several issues regarding the alleged mismanagement Meikles by its major shareholder and the chairman, with claims dating back prior to the EGM. However, the court emphasized that the majority of these claims were irrelevant to the current application for a stay of implementation of the resolutions passed.

The court pointed out that focusing on past mismanagement detracted from the essential question at hand: the validity of the resolutions themselves. It highlighted that the applicant needed to specifically address the legitimacy of the resolutions passed at the EGM rather than providing a narrative based on historical grievances that predated the meeting. This focus on the core issue was necessary for the court to evaluate the application properly and determine whether the stay should be granted or denied. fx