Petitioner's Allegation on Dividends

The petitioner alleged that Autron had not declared any dividends despite its profitability. (!) (!)

Respondents' Response

The 1st respondent denied this grievance, stating that the petitioner was aware of the reasons for not declaring dividends and had expressly agreed as a director to carry forward profits each year and capitalize them towards increasing share capital. Thus, the petitioner could not claim to be aggrieved. (!)

Petitioner's Reply

In reply, the petitioner asserted that no shareholders' meeting was ever held to decide on the capitalization of profits. (!)

Court's Analysis and Finding

The court noted the petitioner's complaint that no dividends were paid despite profits in 1990, 1991, and 1992 (even if allegedly under-declared). (!) (!) It observed there is no provision in the Companies Act 1965 requiring dividends to be declared upon making profits; declaration is discretionary for the company. (!) (!) Relevant articles of association provide: - Article 98: The company in general meeting may declare dividends, but no dividend shall exceed the amount recommended by the directors. (!) - Article 99: The directors may pay interim dividends as justified by profits. (!)

The court held this does not constitute a ground for winding up under s. 218(1)(f) or (i), as the petitioner (a director at the time) could not pursue it via petition if general meetings decided against dividends. (!)