APPLICATION FOR RECTIFICATION OF REGISTER – COMPANIES ACT, 1981 SECTION 67 – NOMINEE SHAREHOLDER – REFUSAL BY COMPANY TO REGISTER CHANGE OF LEGAL OWNERSHIP – RELEVANCE OF NEED TO INVESTIGATE IDENTITY OF BENEFICIAL OWNERS AS GROUNDS OF REFUSAL – CONSEQUENCES OF FAILURE TO GIVE NOTICE OF REFUSAL TO REGISTER TRANSFER WITHIN STATUTORY TIME PERIOD – COMPANIES ACT, 1981 SECTION 50
The Plaintiff sought the substantive relief of a declaration that a transfer of shares in the Defendant Fund to the Plaintiff from its nominee was a valid transfer of the Participating Shares, and an Order that the Fund’s Directors should rectify the share registers and give all necessary approvals to reflect that valid transfer. The background of litigation to this case was that the Plaintiff had previously sought to petition for the winding up of the Company as a contributory, and this transfer of shares from its nominee was intended to facilitate that process. The Defendant claimed that it needed time to consider whether the transfer could be registered, pending further investigation into the beneficial ownership of the relevant shares under recent stringent anti-money-laundering legislation. However, in the process, it exceeded the proscribed time for giving notice of refusal to register a transfer pursuant to Section 50 of the Companies Act, 1981. The central question was therefore whether the Defendant’s regulatory concerns were sufficient grounds to refuse to register the transfer, in light of the fact that no beneficial ownership had apparently changed in the transfer of shares and of the Plaintiff’s ultimate goal in pursuing the transfer.