CAMEROON Law and Practice Contributed by: Lynda Amadagana, Elise Ngo Nyobe, Kevin Djomgoue and Cecile Bella, Amadagana & Partners
ing that decided on the validity of the transaction may request that the transaction be declared null and void. Furthermore, under the combined provisions of Arti - cles 567 and 571 of COSUMAF’s general regulations, which set out the conditions for the suspension and delisting of a financial instrument at the initiative of the issuer, the community legislature confers the possibil - ity of suspending or delisting a financial instrument at the initiative of the issuer. The community legislature allows any person acting on behalf of the issuer of any bond to request its delisting or suspension. However, it should be noted that, in any event, the request for a defence in M&A matters must always be motivated In the event of the implementation of a defensive measure aimed at destroying the merger-acquisition operation, the transferring directors, who hold one- tenth of the company’s capital, are obliged, in the same way as the other shareholders, to acquire the shares transferred as part of this operation. This is in line with the provisions of Article 769 of the AUSCGIE, which stipulates that if the company does not approve the proposed concessionaire, the board of directors or the managing director, as the case may be, are obliged, within three months of being notified of the refusal, to arrange for the shares to be acquired either by one or more shareholders, by a third party or by the company itself. However, it should be pointed out that the corollary of these provisions is that on the financial market, there are specific provisions governing market transactions relating to the interest that the acquisition or transaction must arouse at the risk of it failing at the expense of the costs and commitments made by the initiator of the transaction. That said, when a merger is regulated, the initiators of the operation are liable to investors and all other stakeholders if it fails. by a legitimate interest. 9.4 Directors’ Duties Furthermore, it should be remembered that a refusal by the directors of the acquiring companies to con - tinue with the merger-acquisition operations does not give rise to any liability on their part, unless, prior to their refusal, they proposed to the transferor that they have recourse to the expert appraisal procedure, and they accepted. Thus, it will be up to the acquir - ing company having withdrawn or raised the defence
to bear the costs and inconvenience caused by their objection to the proposed merger. 9.5 Directors’ Ability to “Just Say No” Where the provisions of Article 778-9 of the AUSCGIE are applied, the directors may express reservations regarding the merger or acquisition of a company. In order to do so, they may request in the articles of association that the shareholding of the compa - ny concerned be limited to 10% of its capital. This is in line with the spirit of OHADA legislation, which seeks to protect target companies against means that could lead to the company being taken over outright. It would therefore be possible for the target company to also hold a proportion of the capital of the com - pany involved in the transaction in order to prevent any attempts to take control or combine companies. Generally, given the multilateral and strategic nature of M&A operations, those that arise on the national market involve various players, namely the state and some multinational companies. For this reason, dis - putes arising from such operations are frequently gov - erned by community law, as they are not submitted to the competent regulatory authorities depending on the geographical dimension of the operation in ques - tion (Community Competition Council). In fact, there is an embryonic rate of litigation concern - ing mergers and acquisitions or any other form of cor - porate restructuring. Such slowness in the process of making restructuring practices effective in companies in Cameroon in particular and in the OHADA area in general, results from the hesitation of stakeholders to accept these methods of financing. 10. Litigation 10.1 Frequency of Litigation An illustration of this is judgment No 012/2011 of 31 March 2011, Banque Atlantique du Cameroun, COBAC, Autorité Monétaire du Cameroun and Amity Bank CAMEROON PLC C. Judgment No 010/CJ/ CEMAC/ CJ/09 of 13 November 2009. This famous case highlights the breach of a manifestly fraudulent memorandum of understanding signed between the provisional trustee of Amity Bank Cameroon, appoint -
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