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COMMAND HOLDINGS LIMITED - Update announcement

Release Date: 30/11/2012 17:23
Code(s): CMA     PDF:  
Wrap Text
Update announcement

Command Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1999/014759/06)
Share Code: CMA ISIN Code: ZAE000023131
(“Command” or “the Company” or “the Group”)

UPDATE ANNOUNCEMENT

Introduction

Shareholders are advised that on 24 August 2012 Command received a letter of demand from Cape
Empowerment Trust Limited (“CET”) in terms of section 165 (2) of the Companies Act 71 of 2008 (“the
Act”) (“Demand”). CET raised the following issues in the Demand, namely that:

*        no annual general meeting had been held in more than 3 years;
*        the directors’ appointments were inconsistent with the provisions of the articles of association
         and the provisions of the Act;
*        there were non-disclosure of the related party transactions;
*        there was an omission to annually appoint auditors; and
*        there was a failure of observance of the corporate governance principles.

CET demanded that action be instituted against the directors of Command for damage to Command’s
reputation and goodwill (based on the above issues) and for Command to appoint an independent
and impartial person or committee to investigate the issues raised in the Demand and to report to the
board of directors of Command in accordance with section 165 (4) (a) (i) to (ii) of the Act.

On 16 October 2012, the board of directors of Command appointed such a committee which consists
of Adv. Cecil Tsegarie, a member of the Cape Bar and Ms Althea Lapoorta CA (SA) (“the
Committee”). The Committee was instructed by the board of Command to investigate the issues
raised by CET in the Demand. The Committee reported to the board on 20 November 2012. The
detailed report of the Committee is available for inspection at the Company’s registered office.

Conclusion of the Committee

The Committee suggested that it appeared from the facts and circumstances alluded to in the
Demand that the board of Command could, at the proposed general meeting of shareholders of 7
November 2012 (since rescheduled for 23 January 2013) address most of the issues raised in the
Demand. Should the board omit to act, as suggested above, a shareholder (s) would then justifiably
invoke the provisions of the Act to compel the board of Command to act in a certain way. The
Committee therefore found that, at this stage, the facts and circumstances contained in the Demand
failed to support a finding that the board must take direct legal action on behalf of Command in
respect of the alleged damage to its reputation and goodwill. The Committee suggested that the
board of Command by virtue of its powers as a board and duty to carry on the business of the Group,
should, nevertheless, remedy the apparent inconsistencies referred to.

Board’s decision

The board of Command met on 28 November 2012 to consider the report by the Committee. The
board unanimously adopted at that meeting the report by the Committee. The board of Command
furthermore unanimously accepted at that meeting, having taken legal advice, that the re-election of
directors and the appointment of auditors can only be effected at an annual general meeting and not
at a general meeting of Command. In this regard the board resolved to convene an annual general
meeting of Command to be held on a date to be confirmed and announced.

In addition, the board of Command on 28 November 2012 resolved not to comply with the Demand to
institute legal action against the directors.


Notice
Further to the announcement released on SENS on 5 November 2012, the board of Command
resolved on Wednesday, 28 November 2012 that the above general meeting which was rescheduled
to 23 January 2013 be cancelled and be replaced with a notice of an annual general meeting to be
held on a date to be confirmed and announced to inter alia ratify the appointment of directors and to
re-appoint the auditors. This notice will be given in due course.

Proceedings against directors

Shareholders are further advised that on 28 August 2012 CET instituted proceedings by way of
application in the Western Cape High Court against the board of Command and Command in terms of
section 162 of the Act. No relief is sought against Command.

Relief is sought against four of the directors of Command, being KG Druker, MI Parker, MS Mowzer
and FM Moshesh (“the first to fourth respondents”) to be declared delinquent in relation to the
directorship each of them holds in Command and in the alternative that the first to fourth respondents
be placed under probation in relation to the directorship each of them holds in Command for a period
of five years. CET alleges that the first to fourth respondents abused their position as directors or
otherwise acted in a manner materially inconsistent with the duties of a director.

The first to fourth respondents have instructed Werksmans Attorneys and are opposing the
application by CET. No court date has been set.


Cape Town
30 November 2012

Sponsor
Deloitte & Touche Sponsor Services (Pty) Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/000034/07)

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