Proposed 15% Voting Cap Raises Serious Legal and Market Concerns

A group of concerned shareholders of Banks DIH Holdings Inc. has raised serious concerns
about the proposed amendment to introduce a 15% cap on individual share ownership and
voting power, which is expected to be considered at the company’s upcoming Annual
General Meeting.

The proposed amendment raises fundamental questions about legality, investor protection,
and the integrity of Guyana’s capital markets. This is not simply a matter of one company’s
internal arrangements. The implications of the proposed by-law extend beyond Banks DIH
Holdings Inc. and, if allowed to stand, could have far-reaching consequences for shareholder
rights and market confidence across Guyana.

First, good intentions, historical philosophy, or corporate preference cannot displace clear
statutory protections. The Companies Act establishes the principle that shares of the same
class must carry equal rights, including equal voting rights. Any attempt to selectively impair
voting power through a by-law contradicts that principle. The proposed amendment would
suppress voting rights once a shareholder exceeds a 15% threshold, even though those shares
remain identical in every other respect. Regardless of the stated rationale, a by-law that
deprives certain shares of voting rights is unlikely to withstand legal scrutiny.

Although the company’s Board has sought to frame the proposal as a neutral governance
measure, the effect of the voting cap is neither neutral nor protective. It penalises
shareholders who commit greater capital, strips those shares of proportionate influence, and
eliminates the legitimate control premium that ordinarily forms part of share value in well-
functioning markets. In practical terms, it entrenches existing power arrangements while
denying investors the full economic and governance value of their holdings. This cannot
reasonably be described as shareholder democracy; it amounts to selective
disenfranchisement.

Further, by suppressing voting rights above 15%, the proposed amendment appears designed
to avoid triggering controlling-shareholder obligations under the Securities Industry Act.
Those statutory provisions exist to ensure transparency, equal treatment, and fair exit
opportunities during changes of control. Circumventing them undermines investor protection
and weakens the regulatory framework intended to safeguard the public interest.

While boards are entitled to adopt governance measures, that discretion is not unlimited. The
timing, structure, and practical effect of the proposed voting cap point to a defensive response
aimed at blocking potential acquisitions, rather than a reform genuinely designed to enhance
long-term shareholder value. Courts and regulators in comparable jurisdictions have
consistently rejected such defensive measures when they are not demonstrably in the best
interests of the company as a whole.

Regulatory intervention is therefore required to prevent irreversible harm to shareholder
rights, avoid distortion of the market for corporate control, and preserve statutory protections
pending full judicial review. Allowing this by-law to stand would set a dangerous precedent,
enabling boards to rewrite voting rights by internal resolution, neutralise statutory safeguards,
and undermine investor protections without legislative oversight.

Such an outcome would weaken confidence in Guyana’s capital markets and deter long-term investment.

If the proposed amendment is put to a vote at the forthcoming Annual General Meeting,
shareholders should carefully consider its consequences. Preserving the one-share-one-vote
principle, ensuring equal treatment of all shareholders, protecting legitimate investor value;
including control premiums and reinforcing confidence in the rule of law and sound market
governance are essential.

Once voting rights are curtailed, the resulting damage to shareholder equality and market confidence may not be easily reversed.