-sets timeframe for decision to be made once relevant info submitted
-urges `less emotive and combative discourse’
Contrary to contentions made by Banks DIH (BDIH) Limited, a High Court Judge has ruled that the Guyana Securities Council (GSC) did consider an application it had made to incorporate Banks DIH Holdings Inc., (BDIHHI) as the new holding company of BDIH shares.
Both BDIH and BDIHHI (the Applicants) had approached the court seeking judicial review of what they argued was the GSC’s refusal to consider its application.
The Court has now granted time and ordered the Applicants to provide to the GSC (the Respondent) the documentary evidence its requested, so that a decision can be made on the application
A copy of the July 4th judgment seen by this newspaper outlined the issue before the court. It surrounded a decision made by BDIH to restructure its business and in furtherance of that decision incorporate BDIHHI with a view to the latter being the new holding company of BDIH shares.
According to court documents, a scheme of arrangement (SOA) was drafted and approved by shareholders and obtained judicial approval following an application made by BDIH for this purpose.
On September 8th of last year, BDIH and BDIHHI made applications to the GSC (the Respondent) for BDIH, currently a “reporting issuer” under the Securities Industries Act (SIA), to be “deregistered” and for BDIHHI to be registered as a “public company” and “reporting issuer” under the Act.
It was those applications and the alleged treatment of them by the Respondent which led to the proceedings for judicial review.
Among other things, the Applicants sought a declaration that the refusal and or omission of the Respondent to consider its application without producing documentary evidence was contrary to law, an abuse of power and a breach of duty under the Judicial Review Act (JRA).
The GSC in response to the Applicants’ letter of September 8th, 2023 had stated that the application was still under review and went on to ask BDIH to provide, in accordance with the Securities Industries Act, documentary evidence that it (BDIH) had ceased to be a public company.
The contention of BDIH, however, was that the request for documentary evidence had no legal basis; arguing that its application was being made to the Council that having regard to shareholder and judicial approval of the scheme of arrangement, the position had been reached where to implement the scheme, the council was being requested to approve of BDIH ceasing to be a public company and being replaced by BDIHHI.
BDIH’s position was that the Council needed to act and the documentary evidence will be generated by the Council acting.
The GSC in response said that Banks DIH Holdings Inc. was an applicant, applying to be registered under the SIA and Regulations and that having made the unequivocal statement that Banks DIH Holdings Inc was no longer a public company, clearly supported the request by the GSC for Banks DIH Holdings Inc to provide the documentary evidence for registration as a reporting issuer as set out under the SIA and Regulations.
Further, the Respondents said that it was almost ludicrous that Banks DIH Holdings Inc. expected to be registered as a reporting issuer before becoming a public company which is a recognised legal entity that can be registered as a reporting issuer under the SIA.
The GSC said that should Banks DIH satisfy it that it meets the requirements set out in the SIA then it can be deregistered at any time; even as it stressed that ceasing to be a public company is the basic criteria which must be established for the Respondent to determine whether or not to exercise its discretion and make an order declaring that the company, which has ceased to be a public company, is no longer a reporting issuer.
As far as the Applicants were concerned, the GSC had failed to consider its applications.
Pronouncement
In her pronouncement on the issues, High Court Judge Fidela Corbin-Lincoln said that the letters by the Respondent to the Applicants requesting documentation to establish that BDIH has ceased to be a “public company” shows that the Respondent had examined and given deliberate thought to BDIH’s application.
The judge said that while the Applicants contended that there had been refusal or omission by the GSC to consider its application, she found merit in the Respondents’ contention that no decision had been made in relation to the application by BDIH to be deregistered as a reporting issuer.
She said that the Respondents’ request for BDIHHI to provide evidence that it was a public company is in keeping with the statute which requires this fact to be established as a prerequisite for registration as a reporting issuer.
The request for documents pursuant to the Registration Securities Industry (Registration of Issuer and Securities) Regulations Justice Corbin-Lincoln also pointed out, is in keeping with the statutory requirements.
“The Respondent has not requested documents not required by the statute for the purposes of registration as a reporting issuer,” she said.
On this point she went on to note that the Respondent’s written responses establish that it had “examined and given deliberate thought to the application by BDIHHI. Its refusal to register BDIHHI without documentary evidence to establish that BDIHHI was a public company and without the production of the statutorily required documents is not unreasonable or contrary to law.”
The judge said that having regard to the fact that the Securities Industries Act establishes the status of “being a public company” and “no longer being a public company” as the basis upon which registration and deregistration is to be based “I do not find that the Respondent’s request for documentary evidence to prove these matters is unlawful, unreasonable, taken in bad faith or in any way contrary to law.”
In her ruling of last Thursday, Justice Corbin-Lincoln went on to say that the Respondent was not obligated by the SIA to deregister BDIH as it has a duty to register a company which falls within the definition of a “public company” as defined by the SIA and which satisfies the requirements set out in the SIA for registration.
Equally, she said the Respondent has a discretion to make an order declaring that a reporting issuer which has ceased to be a “public company” (as defined in the SIA) is no longer a reporting issuer if satisfied that the reporting issuer has ceased to be a public company and satisfies any other requirements in the SIA.
In all the circumstances the court refused to grant the reliefs sought by BDIH and BDIHHI.
The judge has said that while the Applicants have not specifically sought an order for the Respondent to make a decision on its applications, based on the Respondents’ own position that it is yet to make a “decision” on the applications made on 8th September 2023, she found that the Respondent’s duty to make a decision includes a duty to make a decision within a reasonable time.
Reasonableness
Reasonableness she said, is determined by the facts in each case; and noted that in the instant matter, the Respondent’s position is that the delay in making a decision has been caused by the failure on the part of the Applicants to provide information requested.
The judge said that notwithstanding, the Respondent’s duty is to make a decision.
As a result, she has ordered that “the Respondent shall within 14 days, upon giving the Applicants at least 7 days in which to provide all requested information, make a decision on the applications made by Banks DIH Limited and Banks DIH Holdings Inc by letters dated 8th September 2023.”
In a postscript to her judgment, Justice Corbin-Lincoln said the court found it most unfortunate that the matter had progressed in this manner, while adding that the tone of the written correspondence, particularly from the Applicants, was unfortunate.
Banks DIH Ltd she said is a well-established company with a long history in the country and has evidently expended significant time and resources in seeking to make changes to its business structure.
The Respondent she said, is a statutory body which must operate within the confines of statute, with its functions which include creating and promoting such conditions in the security market as deemed necessary and appropriate to ensure the orderly growth and development of the capital market.
Against this background she said that in the interest of all parties and the general commercial environment, if, as contended by the Applicants the provisions of the SIA do not easily facilitate the implementation of its scheme of arrangement, “then it appears to me that the way forward is for the parties to engage in less emotive and combative discourse about the way forward.”
She said that if this requires amendments to the legislative framework (including Regulations) then efforts to have this done in a timely manner would not only be in the interest of the Applicants but in the interest of the Respondent being viewed as responsive to a continuously changing commercial environment.
Since the Applicants had been unsuccessful in obtaining most of the reliefs sought, the judge found that it is the unsuccessful party. Costs are to be assessed if not agreed within 21 days of the delivery of the ruling and if there is no agreement, the judge has ordered GSC to file an application for costs to be assessed in accordance with the Civil Procedure Rules.
The Applicants were represented by attorneys Claude Denbow SC, Neil Boston SC and Donna Denbow.
Meanwhile, the Respondent was represented by attorneys Nigel Hughes, Shawn Shewram and Michael Jagnanan.
