AF205 tut wk 12 2022

Amalgamated Telecom Holdings Ltd ('ATH') is a Fiji company listed on the SPSE. ATH was created as a vehicle to be used in the Fiji Government's privatization of its fixed line telephone business. The Government's telephone business had earlier been transferred to Telecom Fiji Ltd ('TFL'). The Fiji Government owned directly or by way of a nominee all issued shares of TFL.

ATH was formed on the initiative of the Government. The Fiji Government owned directly or by way of a nominee all founding shares of ATH.

Both ATH and TFL were formed as public companies.

Below are minutes of a board meeting of ATH held 15/12/98. At this meeting the board is (inter alia) dealing with two distinct but related business deals: the'TFL share sale agreement' and the 'Company restructuring'. The deals themselves have already been negotiated and agreed in principle. Nothing remains for discussion. This meeting is all about implementation of decisions earlier made.

For this particular meeting the minutes would have been drafted in advance of the meeting by ATH's lawyers. The minutes in draft form, effectively become a script (just like a script for a play or movie) to be followed at the meeting. The use of draft minutes prepared in advance in this fashion ensures that everything that is legally necessary for the company to implement the deals is accomplished. It ensures that no technical matters required by company law get overlooked.

Read through the minutes several times. Think about what you are reading carefully. Ask questions of the minutes. Why this? Why that? You can learn a lot if you really engage the materials. Having done all this, check your understanding by answering the following questions.

(i) Resolutions 1 to 10 all concern one deal. This is the'TFL share sale agreement'.

- Who are the parties to the deal?

- What in essence is the deal?

- Is this deal similar to the deal described in Salomon'scase?

- If similar, point to the parallels. Who for example is Mr Salomon? What is the shoe business? etc etc.

(ii) Resolutions 14 to 17 concern a different deal. This is the 'Company restructuring'. Who are the parties to this deal and what is the deal?

(iii)Why are resolutions like 3, 8, and 17 necessary?

Refer to any relevant article in Table A.

(iv)What section/s does resolution 7 concern?

(v) What section/s does resolution 10 concern?

(vi) What section/s does resolution 14 concern?

(vii) Can you suggest any explanation for resolution 9?

Can you suggest any explanation for resolution 15?

[Note: under the Cos Act 1983 a public company was required to have a minimum of seven members.]

IMPORTANT

First: This analytical exercise involves (inter alia) reference to the articles of ATH. We will utilize Table A and presume these to be the articles of the company.

Second: ATH was incorporated under the Cos Act 1983, which Act was still in force at the time of the meeting.

Subject to one exception detailed below, in answering questions requiring reference to sections, presume that the governing law is the Cos Act 2015.

The exception concerns question (vii). To answer this question you need to know and keep in mind a rule in the Cos Act 1983 concerning public companies. The 1983 Act stated a public company must have a minimum of seven members. ATH was in fact created with seven members, each founding member taking one share. At the time of the directors meeting, ATH had no additional members.

In answering questions (i)-(vi) include reference where appropriate to relevant sections of the Cos Act 2015 and to any relevant provisions in Table A.

AMALGAMATED TELECOM HOLDINGS LIMITED

('theCompany')

Minutes of a meeting of the directors of the Company held at 4:45 p.m. on Tuesday, 15 December 1998 at Ro Lalabalavu House, Victoria Parade, Suva.

Present

Mr S Narube

Mr S Kotobalavu

Mr R Nacewa

Ms T Uqe

Ms F Solomone

Mr B Singh

In attendance

Mr M Benefield

Mr C Beatson (Ministry of Finance)

Mr C Street (Chapman Tripp)

Notice

Each of the directors acknowledged that he had received notice of the meeting.

Chairperson

Mr Narube acted as chairperson of the meeting, with the consent of the other directors.

Quorum

It was noted that a quorum was present for the purposes of article 6.10 of the Company's articles of association.

Introduction

The directors noted it was proposed that:

(i) the Company commence business (directly and or indirectly) as a telecommunications operator, providing a wide range of network and value added services;

(ii) to this end, the Company purchase from the Republic of the Fiji Islands ('the State') beneficial ownership of all of the shares in Telecom FijiLimited ('TFL')on the terms set out in a draft agreement for sale and purchase of shares ('the TFL share sale agreement'),a copy of which was produced to the meeting signed by Mr Narube for the purpose of identification); and

(iii) in addition, the Company agree to manage the State's shareholding in Fiji International Telecommunications Limited ('FINTEL')on the terms set out in a draft management agreement ('the management agreement')a copy of which was produced to the meeting (signed by Mr Narube for the purpose of identification).

The board reviewed each of the TFL share sale agreement and the management agreement, and Mr Street described the salient provisions of those documents.

It was noted also that the State had entered into an agreement for sale and purchase of shares in the Company with Fiji National Provident Fund('FNPF'),under which FNPF was to acquire a 49% interest in the Company, and in respect of which incidental transactions were to occur ('the Company restructuring').

Finally, the board discussed aspects of the Telecommunications Policy Statement dated October 1998 made available recently to parties interested in acquiring a 49% interest in the Company. In particular, the Board reviewed the proposal to issue modified operating and radio communication frequency licences to give effect to the policy.

The directors concluded that it would be in the best interests of the Company to request the implementation of the policy (especially the provision of new licences) as soon as practicable, given the need for (and benefits of) certainty ('the regulatory changes').

Disclosures of interest

Each of the directors declared to the meeting his or her (as the case may be) interest in the TFL share sale agreement, the management agreement and the regulatory changes, to the extent that the director was an employee of the State.

The board noted that the members of the Company had suspendedand/or relaxed the prohibitions contained in article 6.11(b) of the Company's articles of association, for the purpose of the meeting.

Resolutions

ITWASRESOLVED THAT:

TFL share sale agreement

1 The Company purchase beneficial ownership of all of the shares in TFL for $422,448,972 on, or substantially on, the terms set out in the TFL share sale agreement.

2 The Company enter into and perform its obligations under the TFL share sale agreement in, or substantially in, the form produced to the meeting.

3 The common seal of the Company be affixed to the TFL share sale agreement, for the purpose of resolution 2, and that the TFL share sale agreement be signed by one director and countersigned by another director or the secretary.

4 The Company (as transferee) execute the share transfer form to be delivered by the State under the TFL share sale agreement, and present the form (after stamping) to TFLfor registration.

5 Each of the directors and the secretary (severally) is authorized, for the purpose of resolution 4, to sign the transfer form on behalf of the Company.

6 The Company issue to the State, with effect from settlement of the purchase of the shares in TFL under the TFL share sale agreement, 422,448,972 ordinary shares of $1.00 each in the Company ranking equally in all respects with the existing shares in the Company and credited as fully paid, and that each of the directors and the secretary (severally) is authorised to enter details of the issue in the Company's register of members.

7 The Company prepare, execute and deliver two share certificates in favour of the State (one for 207,000,000 and the other 215,448,972 shares) in respect of, but subject to, the issue of shares under resolution 6.

8 The common seal of the Company be affixed to the share certificates, for the purpose of resolution 7, and that each of the share certificates be signed by one director and countersigned by another director or the secretary.

9 Each of the directors and the secretary (severally) is authorised to procure and approve deeds of trust in favour of the Company concerning the six shares in TFL to be held on trust for the Company.

10 The secretary be and is hereby authorised to prepare, and file at the office of the Registrar of Companies, on behalf of the Company a return of allotment concerning the shares to be issued under resolution 6, following the issue of those shares.

Management agreement

11 The Company manage the shares held by the State in FINTEL on, or substantially on, the terms set out in the management agreement.

12 The Company enter into and perform its obligations under the management agreement in, or substantially in, the form produced to the meeting.

13 The common seal of the Company be affixed to the management agreement, for the purpose of resolution 12, and that the management agreement be signed by one director and countersigned by another director or the secretary.

Company restructuring

14 The transfer of 207,000,000 ordinary shares of $1.00 each in the Company by the State to FNPF is approved, and that details of the transfer and the transferee be entered in the Company's register of members on presentation to the Company of the relevant share transfer form (stamped and in registerable form).

15 The transfers of one ordinary share of $1.00 by Rupeni Naulu Nacewa. and one ordinary share of $1.00 by Taina Uqe, to the State are approved, and that details of the transfers and the transferee be entered in the Company's register of members on presentation to the Company of the relevant share transfer forms (stamped and in registerable form), following registration under resolution 14.

16 The Company prepare, execute and deliver share certificates in favour of FNPF or the State (as the case may be) in respect of the shares described in resolution 14 or 15 (as the case may be), following registration of the relevant transfer.

17 The common seal of the Company be affixed to the share certificates, for the purpose of resolution 16, and that each of the share certificates be signed by one director and countersigned by another director or the secretary.

Regulatory changes

18 The Company co-operate with the State (acting through the Government or any other instrumentality of the State), and enter into and carry out all further assurances (and take all steps) reasonably required, to give effect to the State's new regulatory policy governing the operation of telecommunications in the Fiji Islands and the implementation of the policy.

19 Without limiting resolution 18, the Company request the Minister for Communication, Works and Energy to take the steps required to issue new operating and radio communication frequency licences to give effect to the policy described in resolution 18.

20 Each of the directors and the secretary (severally) is authorised to take any and all other steps or actions which he or she thinks fit to give effect to, or otherwise in any way whatever in connection with, theTFLshare sale agreement, the management agreement, the Company restructuring and/or the regulatory changes (including the approval of minor amendments to. and the stamping of. any and all documents).

There being no further business, the meeting concluded at ... p.m.

Mr S Narube

Chairperson