Background
The majority shareholder and chief executive of a real estate developer put to a general meeting of shareholders a proposal to enter into a service agreement with a company he had separately established. Minority shareholders objected that "this is the CEO dealing with himself (director self-dealing) and cannot simply be resolved," but the CEO forced the resolution through. Changchun represented the minority shareholders.
What Was at Stake
On a resolution in which a particular person has an interest, that interested party cannot exercise voting rights. The key question was whether the resolution, passed with the CEO's side voting, was lawful.
How Changchun Helped
Acting for the minority shareholders, Changchun argued that the method of resolution was defective, on the basis that a person with a special interest cannot exercise voting rights and those votes must not be counted.
The court accepted Changchun's arguments and rescinded the shareholders' resolution. The case shows that even a majority shareholder cannot push through a resolution in which they have an interest, and that minority shareholders can put it right. (Outcomes depend on the facts of each case and may differ.)