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CMA Intermediate · Business Laws and Ethics · Rights of Shareholders

Dissenting holders of a class apply to the Tribunal under Section 48(2) within time. What is the effect on the variation while the application is pending?

The variation does not have effect unless and until the Tribunal confirms it. Filing a valid application by the dissenting ten per cent holders suspends the variation pending the Tribunal's decision, which then binds the shareholders.

  1. AThe variation takes effect immediately and continues unless later cancelled
  2. BThe variation does not have effect unless and until confirmed by the TribunalCorrect
  3. CThe variation is automatically cancelled on filing of the application
  4. DThe variation takes effect after thirty days regardless of the application

Explanation

Section 48(2) says that where such an application is made, the variation shall not have effect unless and until it is confirmed by the Tribunal. It is not automatically cancelled, nor does it operate in the meantime.

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