Section 179 of the BVI Business Companies Act – Rights of Dissenters – Role of Appraisers
In an important new case, Leon J in Olive Group Capital Limited -v- Gavin Mark Mayhew provides welcome clarification to the dissent and appraisal procedure under Section 179 of the BVI Business Companies Act (the “Act”), including for going private transactions such as squeeze out mergers and forced redemptions.
The case involved a minority shareholder, Gavin Mayhew, who was forcibly redeemed pursuant to Section 176 of the Act. Section 176 provides that shareholders holding not less than 90% of the issued shares of a BVI company may require the company (in this case, Olive Group Capital Limited (“Olive Group”)) to redeem the shares of the remaining Shareholders. As was his right, Mr. Mayhew dissented pursuant to Section 179 of the Act and demanded payment of the fair value of his shares. Pursuant to Section 179, the company and the dissenting shareholder are tasked over a 30 day period to reach agreement as to fair value, failing which they each appoint an appraiser, these two appraisers appoint a third appraiser, and the three appraisers fix the fair value of the shares. In this case, Olive Group appointed PwC, Mr. Mayhew appointed Deloitte, and these two appraisers appointed BDO as the third appraiser.
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Case Comment: Olive Group – Welcome Clarification on Dissent Procedure under BVI Law