Legal Question in Business Law in Bangladesh

Regranding advice for Company Law problem

Mr. X is shareholder and director of a private limited company. M is another shareholder/director. The company engageed in the business of buyinh,selling and developing lands and properties. In year 2000 the company purchased a plot of land for comstruction of multi storied building with finicial assistance of a Bank. All director stood as guarentor for the said loan. Mr. X for the purpose of his other business stayed abroad for sometime during his absense 'M' fraudulently transfered all shares of X in his name. M and other direcot are also trying to sell the said plot of land to a third party.

In this fact and circumtance

How can I advice

Mr. X, M and COmpany


Asked on 1/13/08, 9:00 am

1 Answer from Attorneys
Adnan Karim, Barrister Temple Court Chambers (Dhaka Annexe)

Re: Regranding advice for Company Law problem

There is no specific question. There are a number of issues here. If fraud is proved, then obviously the transfer is invalid. Usually, when Banks give loan, they have a clause inserted in the agreement saying that any transfer of shares must be first approved by the Bank. See if this is the case here.

The business of the Company is run by the board of directors. Company's Memorandum and Articles of Association and/or share holder's agreement (if any) should be the first point to check about indication as to how the Company is run. Also , you need to see how many other directors are there and whether there is a majority decision to sell the land.

Being personal guarantors to the loan, all the directors are liable. If new directors come in , it is the usual practice to replace the personal guarantee of the old director with the new one and then cancel the old guarantee, otherwise both may be liable.

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Answered on 1/14/08, 2:28 am


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