The IPTL power generation plant in Tegeta, Dar es Salaam. PHOTO | FILE
Dar es Salaam. Independent Power Tanzania Limited (IPTL) faces a new internal dispute as one of its minority shareholders has petitioned the High Court for the company’s liquidation.
Eurasia Holding Limited, which owns a 10 percent stake in IPTL, is calling for the winding-up of the company or, alternatively, payment of $25 million as compensation for its shares.
The petition, filed as Miscellaneous Civil Cause No. 30802 of 2024 at the High Court in Dar es Salaam, accuses the majority shareholders of mistreatment, discrimination and mismanagement.
Eurasia Holding claims these actions breach IPTL’s Memorandum and Articles of Association and Tanzanian corporate law.
Eurasia Holding alleges it has been sidelined in IPTL’s decision-making processes for more than three years.
“For over three years, Eurasia Holding Ltd has neither been notified of nor invited to attend any company meetings. This exclusion justifies our claim of being discriminated against,” states the plaint. The minority shareholder claims to have been excluded from crucial decisions, including court cases and financial settlements that impact its interests.
The petition also accuses IPTL of failing to convene annual general meetings for over a decade, a violation of the Companies Act. Eurasia Holding claims the company is being run as a “sole venture” by the majority shareholders.
Eurasia Holding highlights several alleged breaches, including the unilateral allocation of 150 ordinary shares to another shareholder in June 2023.
“This allocation was done without prior notice to Eurasia Holding Ltd, violating its right of first refusal,” the plaint states. The move is described as prejudicial and oppressive, further reducing the minority shareholder’s stake and influence within the company.
Eurasia Holding accuses IPTL’s directors of prioritising the interests of the majority shareholders while disregarding those of the minority. The plaint also cites the unilateral initiation of legal proceedings, such as Civil Case No. 14259 of 2024, without consulting Eurasia Holding.
In one instance, a director of IPTL allegedly impersonated a representative of Eurasia Holding to file a legal application.
“On 28 November 2023, a director of IPTL faked a resolution of Eurasia Holding Ltd to issue Civil Application No. 917/01 of 2023 in the Court of Appeal of Tanzania,” the plaint alleges.
Eurasia Holding asserts that the relationship between the minority and majority shareholders has deteriorated beyond repair, leading to a deadlock in the company’s operations.
“The company is unable to function in accordance with its Memorandum and Articles of Association,” the plaint states.
Given these circumstances, Eurasia Holding is requesting the court to liquidate IPTL under Sections 275, 279(1)(e), and 281(1) of the Companies Act. Alternatively, the company seeks compensation equivalent to the value of its investment.
The case sheds light on the governance challenges facing IPTL, a company long embroiled in controversy.
The High Court is expected to set a hearing date soon, marking the beginning of what promises to be a closely watched legal battle.
