Non-distribution of dividends due to expenses caused by reasonable officers’ salaries is ‎not minority oppression

As part of a dispute between shareholders of a private company it ‎was argued that a shareholder who holds half the shares of the ‎company is excluded from the decision making process and is ‎oppressed by taking unreasonable expenses for office holders of the ‎Company at the expense of distribution company’s profits and by ‎harming‏ ‏the legitimate expectations of a shareholder to enjoy the ‎company's profits. The Court held that in a closely held private ‎company there is a legitimate expectations of shareholder to be ‎involved in the management of the Company and there is no ‎impediment‏ ‏to file discrimination claims by a shareholder who holds ‎a 50% stake in the company, as long as the remaining shares are ‎held by a single shareholder who also holds 50% of the Company. ‎The profits of a private company does not lead to an increase in ‎share value and thus avoiding distribution of dividend excludes the ‎shareholder's ability to benefit from them. However, in the absence of ‎a specific stipulation in the articles of the company which requires ‎the distribution of dividends, there is no oppression if the salaries of ‎office holders of the Company do not exceed the market norm and no ‎actions are aimed at distribution of profits in an unequal manner. For ‎this reasoning the claim was dismissed.