[Community-Discuss] Issue of AfriNIC illegality

[Owen DeLong]

>> The advice from counsel is that it most likely would not. Further, it seems that the companies act requires proxies.
> 
> … And we explained that in the context of Company act, the limit of 5 proxies is legal. as Company act only recognise the nine(9) board members as AFRINIC members(Registered Members).

We being who, exactly? Because IIRC, AfriNIC legal counsel disagreed.

> As discussed, the limit of proxy to 5 per person and  zero proxy per candidate in the bylaws(which applied to Registered members and  "Resources Members") was decided by this community to solve some issues to the elections process. As the changes discussed here are about improving accountability, encouraging participation through all means should be encouraged  instead of  allowing unlimited proxies.

I would argue it was made to alter some perceived issues, which I am not convinced were actual issues.

I am not convinced that unlimited proxies discourage participation and would, in fact, argue that limiting people’s choice in how they appoint proxies on their behalf may well discourage participation.

However, based on your assertions I decided to look into the companies act and see what it actually says.

As near as I can tell, the relevant sections are Part V, Subpart IV, sections 128 through 130 which read:

> 128.	Right to demand a poll.
> 
> 	(1)	Any provision in the articles shall be void in so far as it would have the effect -
> 
> 		(a)	of excluding the right to demand a poll at a general meeting on any question or matter other than the election of the chairman of the meeting or the adjournment of the meeting;
> 
> 		(b)	of making ineffective a demand for a poll on any question or matter other than the election of the chairman of the meeting or the adjournment of the meeting that is made -
> 
> 			     (i)	by not less than 5 members having the right to vote;
> 
> 			    (ii)	by a member or members representing not less than one tenth of the total voting rights of all the members having the right to vote;
> 
> 			   (iii)	by a member or members holding shares in the company conferring a right to vote, being shares on which an aggregate sum has been paid up equal to not less than one tenth of the total sum paid up on all the shares conferring that right; or
> 
> 		(c)	of requiring the instrument appointing a proxy or any other document necessary to show the validity of or otherwise relating to the appointment of a proxy to be received by the company or any other person more than 48 hours before a meeting or adjourned meeting in order that the appointment may be effective thereat.
> 
> 	(2)	The instrument appointing a proxy to vote at a meeting of a company shall be deemed to confer authority to demand or join in demanding a poll and, for the purposes of subsection (1), a demand by a person as proxy for a member of the company shall be deemed to be the same as a demand by the member.
> 
> 	(3)	A person entitled to vote on a poll at a meeting shall be deemed to be a person entitled to vote for the purposes of this Act.
> 
> 129.	Procedure at meetings.
> 
> 	(1)	Subject to the articles and to sections 67 (voting rights) and 132 (circulation of members' resolutions) -
> 
> 		(a)	2 members of a company personally present shall form a quorum;
> 
> 		(b)	any member may be elected by the members present at a meeting to be the chairman;
> 
> 		(c)	in the case of a company having a share capital -
> 
> 			 (i)	on a show of hands each member who is personally present and entitled to vote shall have one vote;
> 
> 			(ii)	on a poll each member shall have one vote in respect of each share held by him and where all or part of the share capital consists of stock or units of stock, each member shall have one vote in respect of the stock or units of stock held by him which is or are or were originally equivalent to one share; and
> 
> 		(d)	in the case of a company not having a share capital, every member shall have one vote.
> 
> 	(2)	On a poll taken at a meeting a person entitled to more than one vote need not, if he votes, use all his votes or cast all the votes he uses in the same way.
> 
> 	(3)	A corporation may by resolution of its directors or other governing body -
> 
> 		(a)	if it is a member of a company, authorise such person as it thinks fit to act as its proxy either at a particular meeting or at all meetings of the company or of any class of members; or
> 
> 		(b)	if it is a creditor, including a debenture holder of a company, authorise such person as it thinks fit to act as its proxy either at a particular meeting or at all meetings of any creditors of the company,
> 
> and a person so authorised shall, in accordance with his authority and until his authority is revoked by the corporation, be entitled to exercise the same powers on behalf of the corporation as the corporation could exercise if it were an individual member, creditor or debenture holder of the company.
> 
> 	(4)	Where -
> 
> 		(a)	a person present at a meeting is authorised to act as the proxy of a corporation under subsection (3); and
> 
> 		(b)	the person is not otherwise entitled to be present at the meeting,
> 
> the corporation shall, for the purposes of subsection (1), be deemed to  be personally present at the meeting.
> 
> 	(5)	A certificate under the seal of the corporation or signed on its behalf by an authorised person shall be prima facie evidence of the appointment or of the revocation of the appointment of a proxy under subsection (3).
> 
> 	(6)	Where a holding company is by itself or through a nominee entitled to the whole of the issued shares of a subsidiary and a minute is signed by a proxy of the holding company authorise under subsection (3) stating that any act, matter, or thing, or any ordinary or special resolution required by this Act or by the memorandum or articles of the subsidiary to be made, performed, or passed by or at an ordinary general meeting or an extraordinary general meeting of the subsidiary has been made, performed, or passed, that act, matter, thing, or resolution shall, for all purposes, be deemed to have been duly made, performed, or passed by or at an ordinary general meeting, or as the  case requires, by or at an extraordinary general meeting of the subsidiary.
> 
> 	(7)	Where under this Act any notice, copy of a resolution or other document relating to any matter is required to be lodged with the Registrar by a company, and a minute referred to in subsection (6) which relates to such matter is signed by the proxy in accordance with that subsection, the company shall within 28 days lodge a copy of the minute.
> 
> 130. Proxies.
> 
> 	(1)	Subject to section 129, a member entitled to attend and vote at a meeting of the company, or at a meeting of any class of members of a company, may appoint another person as his proxy to attend and vote in his stead at the meeting and that proxy shall have the same right as the member to speak at the meeting, but, unless the articles otherwise provide -
> 
> 		(a)	a proxy shall not be entitled to vote except on a poll;
> 
> 		(b)	a member shall not be entitled to appoint more than 2 proxies to attend and vote at the same meeting; and
> 
> 		(c)	where a member appoints 2 proxies the appointments shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.
> 
> 	(2)	In every notice calling a meeting of a company or a meeting of any class of members there shall appear with reasonable prominence a statement -
> 
> 		(a)	as to the rights of the member to appoint proxies to attend and vote instead of the member; and
> 
> 		(b)	that a proxy need not also be a member.

It would seem to me that Section 128(1)(c) and 128(2) and 128(3) together make it quite clear that limitations on the appointment of proxies are not intended to be valid under the act.

The act is somewhat vague on this and open to interpretation in that it does not outright prohibit such limitation, but it does not permit it and it goes to great lengths to discourage disenfranchisement by limitations on proxies. In such a case, I find it is usually wisest to follow the advice of trained and competent legal counsel with experience in the jurisdiction in question.

Owen


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