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Court blocks Banks DIH from enforcing new share ownership by-law ahead of AGM
(Kaieteur News) – Justice Sandil Kissoon has granted injunctive orders restraining Banks DIH Holdings Inc. from enforcing or putting to a vote a new by-law that would cap shareholder voting rights and ownership at 15 percent.
The ruling handed down on Friday, comes just one day ahead of the company’s scheduled Annual General Meeting (AGM).
The proceedings were brought by Guyana Americas Merchant Bank Inc. and Beharry Stockbrokers Limited against Banks DIH. According to the court document seen by this publication, the decision effectively halts the implementation of “New By-law 8 Share Ownership,” which was adopted by the company’s directors on November 20, 2025, and was slated to be presented to shareholders for confirmation at the AGM scheduled for January 31, 2026.
In his ruling, Justice Kissoon granted a series of interlocutory injunctions restraining Banks DIH, its directors, officers, and agents from presenting, tabling, proposing, or permitting any vote at the AGM to confirm or give effect to the new by-law.
Banks DIH Holdings Inc.
The court also suspended the operation and legal effect of the by-law pending the final determination of the substantive proceedings.
Additionally, the court restrained the company from invalidating or discounting votes attached to issued ordinary shares by reference to any 15 percent ownership or voting limitation, and from issuing or acting on any notice, investigation, divestment request, or forced sale process purportedly authorised by the new by-law.
The issue arose from the directors’ decision to amend the company’s by-laws to introduce a cap on share ownership and voting rights, a move he said raised serious legal concerns.
Justice Kissoon noted that the proposed by-law went further by authorising the company to invalidate votes held in excess of the 15 per cent threshold, determine whether shareholders were acting in concert to circumvent the cap, appoint a special registrar for that purpose, and compel the sale of shares held above the limit.
The judge in his ruling highlighted that courts are generally reluctant to interfere in the internal affairs of companies or restrain the holding of an AGM. However, he stated intervention was warranted in this case due to the serious implications for shareholder rights.
“This Court in the exercise of its discretion, is cognizant, firstly, that Courts are ordinarily reluctant to intervene, to restrain the convening of an Annual General Meeting or to intervene in the internal affairs of a company and do so as a matter of exception only in clear cases where there is a real risk of harm,” Justice Kissoon stated.
He further noted that Banks DIH, a public company listed on the Guyana Stock Exchange with a single class of common shares, had operated for more than 50 years without any restriction on share ownership or voting rights. He pointed out that under the Companies Act and the company’s Articles of Association, shareholders are entitled to one share, one vote, and that no cap was expressly or impliedly provided for.
It was also outlined that the by-laws of a company are incidental to its Articles of Association and cannot be used to erode or unlawfully restrict entrenched shareholder rights. Justice Kissoon held that the procedure used by the directors to adopt New By-law Eight was not capable of lawfully achieving the intended outcome and could not be cured or ratified by an ordinary resolution of shareholders.
He further noted that allowing the by-law to proceed could result in irreparable harm to shareholders, including the potential invalidation of votes and forced divestment of shares, affecting not only the claimants but the company’s wider shareholder base.
In concluding, the judge granted the injunctions that will remain in effect until the hearing and determination of the substantive action.
Senior Counsel Stephen Fraser, Shantell Scott-Lall and Sydney Fraser, represented the claimants while Senior Counsel Neil Boston, along with Senior Counsel Claude Denbow and Ms. Denbow, appeared for Banks DIH Holdings Inc.
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