(b) Simoni is a shareholder in a newly registered public company, Ndarama Ltd. The company is a mining concern specialising in the excavation and mining of precious minerals such as gold and diamonds. Initially the company started as a private company and converted into a public company in 2002 when it launched a successful public share offer. Simoni bought 3,000 shares then and has since bought another 2,000 shares through a rights issue that was launched by the company in 2005. Since becoming a public company in 2002 it has always made profits and the shares have consistently performed well on the Zimbabwe Stock Exchange. However, the directors have consistently refused to declare dividends. The reason the directors have given is that the company wants to buy more advanced mining equipment and computers. Recently, the company opened a new mine in Marange communal lands, where vast diamond deposits have been discovered and its share price on the local bourse has surged even further. Simoni feels a sense of grievance due to the fact that in spite of the handsome after tax profits the company has been making, no dividends have been declared. At the same time Simoni does not wish to dispose of his shares.Required:Advise Simoni as to whether or not he can sue the company for wilful refusal to declare dividends. (5 marks)
