Shaheen Shan v The Registrar of Companies & Ors

A share transfer is ineffective unless supported by a proper instrument of transfer, delivery to the company and registration in accordance with the Companies Act 2006. A company cannot remove a registered shareholder without such an instrument or an order for rectification. In assessing disputed historical transactions, the court should test oral evidence against contemporaneous documents, inherent probabilities, consistency, conduct and credibility, while recognising the fallibility of memory and the danger of litigation influence. An intention to appoint a director does not itself constitute an appointment. Appointment requires the act authorised by the company’s articles or the relevant statutory procedure.

The claimant, the widow and executrix of Ali Akbar Shan, sought rectification of the Companies House records and the register of members of Yorkshire Halal Meat Supplier Ltd, together with correction of director appointments in that company and Shans Supermarket Ltd.

The dispute concerned ownership of the subscriber share, alleged transfers of shares in 2005 and 2015, the alleged resignation of Aftab Ali as a director in 2013, and purported appointments of Aftab and Sajad Ali Shan as directors on 25 January 2022.

1. Share ownership and transfers. The subscriber share was most probably intended to produce an equal initial shareholding between Ali and Aftab. The alleged 2005 transfer of Ali’s shares to Aftab was rejected. The meeting relied upon by Aftab had not occurred as described, and his evidence and minute were unreliable.
2. The court accepted on the balance of probabilities that Aftab had signed the 2015 stock transfer forms transferring 90 shares, 45 each to Shaheen and Rukhsana. The conclusion was reached by assessing the surrounding evidence, Ali’s control of the companies, Aftab’s limited involvement, and the implausibility of the competing account.
3. Directorship. Aftab had resigned as a director of YHMS in or about 2013. His account to HMRC, the Form TM01 and the surrounding evidence supported that conclusion.
4. Under clause 13 of the articles, only Ali could appoint directors outside a general meeting. The discussions on 25 January 2022 amounted to an intention or agreement to appoint, not an appointment. The subsequent filings were therefore ineffective.
5. The register was ordered to reflect Ali’s estate as holding 150 shares, Aftab 60 shares, Shaheen 45 shares and Rukhsana 45 shares. The Companies House entries concerning the purported director appointments were to be amended.

This was a first-instance trial. The judgment records related interim applications and other linked proceedings, but no appellate decision is stated.