Africa-Press – Eswatini. The Farmers Bank shareholders have relieved the board of directors of their duties. This is according to documents.
The shareholders are John and Alexandre Asfer (also known as AA) who are brothers.
The former board of directors members who have been removed are the Chairman, Nhlonipho Dlamini, Mvila Dlamini, Fani Dlamini and Siphiwo Dlamini, who was also the Chief Executive Officer (CEO).
The ordinary resolution taken by the company members on April 10 shows that the board members were removed as directors of the Farmers Bank (Pty) Ltd in terms of Section 200 of the Companies Act on April 10.
The company’s Form J kept at the Registrar of Companies, also showed that two of the registered directors of the company, being the CEO and chairman were removed.
On March 20, the shareholders issued a special notice for the removal of the directors. The notice served to suspend the four with benefits.
The notice stated that the decision was not taken lightly as it was based on a thorough evaluation of their performance, conduct and alignment with the company’s objectives.
They also included the statement of reasons for removal, which contained over 20 reasons, including that Alexandre as the paid up shareholder, had suffered material loss of confidence and trust in the board of directors.
It was stated in the documents that as then unknown to Alexandre, an essential and material mis-recording of the substance of the agreement took place in the internal accounting statements that resulted in the audited financial statements being misstated, which documented the value of his shares allotted to only E100 million instead of E120 million and without any consideration or otherwise means of accounting for the reduction or differential, and without the knowledge or authorisation of either Alexandre, or John.
confidence
According to the statement, Worldwide Capital Corporation Limited (NZ) Inc. 6328907, which Alexandre through this company was the original and sole shareholder in Farmers Bank (Pty) Ltd, and who is also one of the two registered members and shareholder of the company with paid-up capital or shares, with the only other registered member being John. The document stated that Alexandre was the one who in fact provided the entire original E120 million in seed capital equity invested in Farmers Bank on December 27, 2017, and who has experienced and suffered a material loss of confidence and trust in the board of directors.
The documents showed that the 120 million shares (not 100 million) was supposed to represent 60 per cent (not 50 per cent) of the authorised capital of the Farmers Bank Company, and 100 per cent of the registered and issued-and-paid-up shares/capital.
It was the intent and full understanding of the founding shareholder and subscriber of Farmers Bank (Pty) Ltd, Alexandre was to receive 120 million shares, being 60 per cent of the authorised share capital, in exchange for his investment of E120 million as transferred to Eswatini on December 27, 2017.
“This has been communicated on the record at a three-hour meeting on March 2, with both the CEO (Siphiwo Dlamini) and chairman of the Farmers Bank board of directors, and then again in a second follow-up 3.16-hour/minute meeting on March 15 with the CEO, Siphiwo Dlamini attended with John again,” the notice stated.
It was stated that the CEO clearly communicated his understanding of the share-price /number-of-shares issue on the record, and that he understood the at least constructive fraud had occurred and had thought all this time that there was an issue, but this was never communicated to the shareholder or his promoter.
vulnerable
The documents further showed that to date, the CEO had done nothing to correct this obviously critical situation that materially affected both Alexandre and the company, and committed against him up to the filing of this notice, by himself as the CEO or director and/or in consultation with the chairman of Farmers Bank as usual, and correct the record by issuing a formal legal document stating that the share allotment directly related to Alexandre’s original investment of E120 million was equal to 120 million shares as per the April 18, 2018 Memorandum and Articles of the company.
The document further stated that in February 26, it was for the first time that it was brought to the attention of Alexandre that the company’s broadly-defined legal structure was to make it vulnerable to an anomalous situation that is maximised when there was an exact 50/50 split between the number of authorised shares to members, and those still nominally held by the company as authorised but not yet issued.
The documents stated that Alexandre believed that, if such vulnerability existed, then if the board, or any one or more if its members, were or became aware of it, then they owed a duty of disclosure of it to the shareholder.
“The board owes a duty of care and a fiduciary duty to the members/ paid-up shareholders. In this case there was only one paid-up shareholder/member and that is AA,” the document states.
It was further stated that the primary and immediate source of said loss of confidence by Alexandre was his recent discovery and realisation that the board appeared to be actively subverting his legal and equitable interests in the company while concurrently taking active steps to conceal its actions from him, including through non-compliance with certain notice requirements to him with respect to certain recent nominal and secret meetings of the board of directors which he had no knowledge in fact.
Directors removed promoter without notifying shareholder
THE Farmers bank board of directors removed John P Asfer (JA) as promoter without any notice to Alexandre Asfer as a member and director of the board.
The documents stated that John was also a current member and founding director and represents Alexandre’s eyes and ears in Eswatini in respect of his equity investment in the company, including the silver consignment that he was responsible for administering through Alexandre’s company, Pentillion Corporation (Pty) Ltd.
It was further stated that the board of directors and CEO of Farmers Bank terminated the contract with in a secret board meeting on February 23, which Alexandre was not made aware of, further prejudicing the shareholders foundational interests.
“For the record, JA remains one of two members and founding director (whether or not he is a member of the board),” the documents stated.
The documents showed that the secret board of directors meeting which AA was not notified of, there were nominally resolved eight items that were prima facie detrimental to Alexandre and to his legal and equitable interest in the company which were further nominally based upon baseless-in-fact rumour-mongering against JA that has been released to social media
The notice stated that the resolutions signed by the chairman, CEO and two-directors in the secret meeting of February 23, and subsequently issued on February 27, were in direct contradiction to the factual situation, and designed to libel John in order to alienate, destabilise, and prejudice the sole registered shareholder, while stating as part of the nominal conclusion that such was not the intent of the board.
“Under the circumstances such actions are clearly detrimental to the legal and equitable interests of the company’s only de jour and /or de facto members and which raises issues of prima facie personal liability of the members of the board,” the notice states.
It was stated that the members of the board were acting in breach of trust of the shareholder and members’ equitable interests of which the board was charged with protecting.
It was further stated that Alexandre was informed just after a meeting held on Monday, March 18, with the board of directors, that it was decided by the chairman of the board of directors to set another board meeting, which was formalised the very next day on Tuesday, that it would be held first thing in the morning on Thursday, March 21,which the CEO and chairman of the board of directors clearly understand would constructively frustrate Alexandre as from attending a meeting after midnight to 0300 hours Pacific Mountain Time in Canada.
“The board’s primary duty is to the company’s actual members and equity shareholders, and not to constructively-sabotage its administration to make it a more attractive take-over target through a constructive fraud against the company’s shareholder, even after over six hours of discussions on the record with the CEO and chairman at the Riverstone Mall earlier in March, there has been no effort by them to correct any of the false narrative with the board or any stakeholders,” the document stated.
We are still in office – chairman
THE former chairman of the board of directors of the Farmers Bank has claimed that they have been removed.
Nhlonipho Dlamini said it was not true that they had been removed, but said there were criminal elements in action.
When informed of the documentary evidence in this newspaper’s possession, Dlamini said the entire letter was not true and had been forged.
He further stated that following their notice that John Asfer was not part of the Farmers Bank, he started creating these letters.
Dlamini said they stopped working with him in February, and that was when he started producing these letters.
Asfer said a member (shareholder) of a company is the only one entitled under Section 200 of the Company Act (2009) to remove a director using the Section 200 (21-day notice) giving the director(s) reasons why they are being removed.
“We followed the process of the Act to the letter,” he said.
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