UK/India shareholder dispute resolved

An Indian widow and a former finance director and Chartered Secretary of an Indian listed company, who came under pressure to sell her husband’s shares in a UK company for considerably less than their value, called on Richard Morgan’s help to fight her case.

She had little knowledge of the subtleties of litigation under English law including the costs involved, was very concerned by the prospect of going to court and found the process very stressful following on from her husband’s death.

Mr S died without a will and his estate included 15 ordinary shares in an international payroll and accounting company – these shares, on his death were vested in his widow, who was the personal representative of his estate.

But under the company’s existing shareholders agreement, at a shareholder’s death, each of the other shareholders had the option to buy the deceased’s shares. The majority shareholder exercised that option and served an option notice on Mrs S.

Richard said: “I’m delighted that we were able to resolve this for her – it was very alarming for her to face litigation when she knew little about litigation and court processes under English law. There was considerable financial risk for her, along with the stress of litigation – the majority shareholder’s attitude was also very difficult as he wanted to buy the deceased’s shares for less than market value.”

Agreeing the value of the shares proved challenging, with the majority shareholder eventually pressing for sale of the shares at £178,000, a price far below their value. Richard entered a counter claim and brought the case to mediation. Mrs S eventually received £425,000 for the shares.

She said to Richard: “Your grasp of the matter and the solutions you proposed including your own case studies exuded confidence.

“Through numerous testing times, you stayed strong, reassuring me about the justness of our cause. You helped me gain confidence in the matter where initially I was sceptical and at times fearful about the UK judicial system.

“In addition your accessibility almost 24/7, even on weekends, just made me more comfortable. You appreciated the fact that I did not want to litigate in court because of the costs, yet you reminded me that this might be the only option.

“I want to thank you both for an outstanding job done. I have, in my 30-year professional career, worked extensively with lawyers in the UK, but I must admit that both of you took the involvement to a new level altogether.”