74. Rights of holders of classes of shares

Where, in the case of a company the share capital of which is divided into different classes of shares, provision is made in its constitution for authorising the variation or abrogation of the rights attached to any class of shares in the company, the rights attached to the class of shares must not be varied or abrogated except —

For the purposes of subsections (1) and (1AA), any of the company’s shares held as treasury shares is to be disregarded.

An application mentioned in subsection (1AA) is not invalid by reason of the applicants or any of them having consented to or voted in favour of the resolution for the variation or abrogation if the Court is satisfied that any material fact was not disclosed by the company to those applicants before they so consented or voted.

An application mentioned in subsection (1AA) must be made within one month after the date on which the consent was given or the resolution was passed or such further time as the Court allows, and may be made on behalf of the shareholders entitled to make the application by such one or more of their number as they appoint in writing for the purpose.

On the application the Court, after hearing the applicant and any other persons who apply to the Court to be heard and appear to the Court to be interested, may, if satisfied having regard to all the circumstances of the case that the variation or abrogation would unfairly prejudice the shareholders of the class represented by the applicant, disallow the variation or abrogation, as the case may be, and must, if not so satisfied, confirm it and the decision of the Court is final.

The company must, within 14 days after the making of an order by the Court on any such application, lodge a copy of the order with the Registrar and if default is made in complying with this provision the company and every officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $2,000 and also to a default penalty.

The issue by a company of preference shares ranking pari passu with existing preference shares issued by the company is deemed to be a variation of the rights attached to those existing preference shares unless the issue of the firstmentioned shares was authorised by the terms of issue of the existing preference shares or by the constitution of the company in force at the time the existing preference shares were issued.

For the purposes of this section, the alteration of any provision in the constitution of a company which affects or relates to the manner in which the rights attaching to the shares of any class may be varied or abrogated is deemed to be a variation or abrogation of the rights attached to the shares of that class.

This section does not operate so as to limit or derogate from the rights of any person to obtain relief under section 216.