They say it’s not over until it’s over, and certainly the dispute that has raged in the Pomona citrus valley over the directorships of the country’s premier producer and exporter of citrus produce, the Citrus Products of Belize Limited (CPBL), won’t see closure any time soon.
That is because, despite a benchmark ruling handed down Wednesday, April 21, by Supreme Court Justice Minnet Hafiz-Bertram in the case filed by the Citrus Growers Association (CGA) to remove three directors they deem to be rebelling against their authority, the judge denied the CGA all of the relief it had sought to get those directors removed retroactive to July 10, 2009, when they were all issued letters calling on them to vacate their seats.
In fact, one of the directors told us today, Thursday, that they will sit in those seats until their terms expire at the end of the month.
The CGA and its subsidiary, Investment Company Limited, took the CPBL, Henry Canton, CEO, director and shareholder of CPBL, and Banks Holdings to court over the matter. Two of nine directors, Frank Redmond and Michael Duncker, were attached to the case as interested parties.
“In my view,” said Justice Hafiz-Bertram, “the claimant being desirous of removing Henry Canton, Michael Duncker and Frank Redmond and to replace them with Rosella Zabaneh, Denzil Jenkins, and Antonio Zabaneh, had an absolute right” to serve them with the termination letters, and the CGA had properly exercised that right.
However, the judge went on to opine that that right should not be exercised retroactively, because it would “serve no useful purpose since the AGM is within a few weeks. …
“Further, to grant the declaration now may cause difficulties in the administration of the company,” said the judge.
That is exactly CGA’s concern. According to Denzil Jenkins, director of ICL, CGA subsidiary, the said directors of the CGA, after they had been issued termination letters to step down from their positions as directors of CPBL, caused the company, CPBL, to resign its membership from the association, CGA. This is notwithstanding the fact that CGA is the majority shareholder in the company, owning 51% of the shares.
Jenkins commented, when Amandala contacted him on the ruling, that these statements are “strangely conflicting,” because while the judge recognized the CGA’s absolute right to remove and replace directors, and while it said that the termination letters of July 2009 were in order, it was not allowing the CGA declarations to say that the directors were properly removed then, nine months ago. [In the English language, that means that the right is unconditional, unrestrained, and unlimited.]
CPBL CEO, Dr. Henry Canton, who is noted in the court judgment as a shareholder and director of CPBL, is one of the persons who had been issued letters to step down as director. Canton had maintained when we spoke with him on the matter that he holds the directorship by virtue of his contract and based on an agreement from the onset that he would not become CEO if he does not get a seat on the board. Canton has a case pending against CPBL which has yet to go to hearing.
Notwithstanding that the court denied all the declarations the association wanted, the CGA still considers the ruling a double victory of sorts, in that not only does it affirm their absolute right to replace and remove directors: it also affirms that the seat occupied by Canton is under CGA’s control, reaffirming their position that Canton should vacate his seat.
In her ruling the judge disagreed with Canton’s argument that he was duly appointed by the CPBL, and not CGA, as director of the CPBL, and can only be removed as a director of the company in accordance with the Articles of Association.
Hafiz-Bertram observed that the office of the directors will expire in any case in about a month, on May 19, 2010, and the claimant would then be able to appoint five new directors.
On February 19, 2009, the three, Canton, Redmond and Duncker, were nominated and appointed to the board to represent CGA, along with Patrick Polack and Charles Woods.
After the July letters, the CGA had also tried to remove the directors a second time via a meeting; however, CBPL chairman, Duncker, contended that the resolution to remove the directors required 90% votes to be carried.
Fifty-one percent (CGA) voted in favor, whereas 46.91%, the block including Banks Holdings, voted against. As a consequence, the men continued to occupy the seats. (Banks sided with the three directors, and it stood in firm defense of Canton’s position, that he is entitled to remain as director.)
For its part, CGA contended that the correct rules for the removal required only a 51% vote. Because of this impasse, the CGA filed the lawsuit.
Hafiz-Bertram noted that the removal in question is by the shareholder (CGA) and not by the company (CPBL), and so the articles are not even relevant to the case.
Banks had told the media that they would instruct their attorney to have the matter submitted to international arbitration, rather than have it ventilated in the Belize Supreme Court. However, Justice Hafiz-Bertram said that the CGA could still pursue its claim here in court.
Justice Hafiz-Bertram also urged the parties to meet to discuss how they could iron out the problems caused by conflicting sections of the Articles of Association and the investment agreement with Banks Holdings of Barbados.
The court also said it would not award costs to the CGA, and went on to comment that “…amendments have to be made to the articles and it is the responsibility of the parties to ensure that this is done.”
Speaking with Amandala Thursday, Duncker said that he, Canton and Redmond will continue to occupy those seats on CPBL’s board until next Thursday, April 29, at which time the CPBL board is slated to hold its AGM.
CGA had been intending to have the directors removed before that date. It remains to be seen how this one will play out.