Jersey Royal Court Decisions April 2021

Financial Technology Ventures II (Q), LP and others v ETFS Capital Limited and others [2021] JRC025

Summary: Certain minority shareholders were found to have been victims of unfair prejudice by the Chairman and majority shareholder of ETFS Capital Limited. The unfair prejudice included:

  • Pursuing a scheme to drive these minority shareholders out of the company at the lowest price by:
    • Leading them to believe there would be a pro-rata distribution of proceeds from certain sales of the Company‚Äôs underlying businesses
    • Repeatedly postponing discussions on issues of distributions
    • Securing the removal of the Independent Directors from the board of directors of the company
    • Unilaterally changing the business of the Company to leave those shareholders locked into a business which was radically different to what they had originally invested in

Action Point: The duties of a director is to act in the best interests of the Company and not simply in the best interests of the majority shareholder. Directors who are majority shareholders need to ensure that the actions they take at board level are for the benefit of all shareholders.

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