## Facts

- A public company incorporated in England had authorized share capital of £75 million divided into 75 million £1 shares; 64,370,000 shares were issued and fully paid.
- Shareholders unanimously approved a special resolution to restructure the company’s capital.
- The plan reduced authorized capital to £10,694,370 by canceling a proportion of issued shares, leaving 64,370 issued £1 shares; no paid-up capital was returned, no unpaid liability was reduced, and creditors were not affected.
- The remaining sterling shares were subdivided so that 64,370 £1 shares became 643,700 shares of £0.10 each.
- The company then proposed increasing authorized capital into multiple currency-denominated classes: £30 million (10p shares), US$30 million (10-cent shares), Sw. Fr. 30 million (10-centime shares), and DM 30 million (10-pfennig shares).
- The company petitioned the Chancery Division for approval of the capital reduction and sanction of the multicurrency reorganization; the petition was unopposed, and the court appointed an amicus to test legality under the Companies Act 1985.

## Issues

1. Whether the Companies Act 1985 requirement to state “the amount of the share capital” mandated a single aggregate figure rather than multiple currency-specific amounts.
2. Whether the Act required share capital to be denominated exclusively in sterling.
3. Whether shares denominated in foreign currencies satisfied the requirement that share capital be divided into “shares of a fixed amount,” despite exchange-rate fluctuations.
4. Whether the reduction and related steps raised creditor-protection concerns sufficient to refuse approval.

## Decision

- The court approved the reduction of capital and sanctioned the reorganization creating multicurrency share capital classes, and approved the minute for registration.
- The Act did not require share capital to be stated as a single total sum; stating multiple amounts in different currencies could satisfy the statutory requirement.
- The Act did not require sterling-only denomination of share capital; foreign-currency and multicurrency classes were permissible, subject to maintaining the statutory minimum for a public company in sterling.
- “Fixed amount” referred to the nominal (face) amount in the currency of denomination, not a fixed sterling equivalent.
- Because the reduction did not return paid-up capital, reduce unpaid liability, or prejudice creditors, there was no creditor-protection basis to deny the petition.

## Legal Principles

- A statutory requirement to state “the amount of the share capital” is satisfied by stating capital in monetary terms and does not necessarily require a single aggregate figure.
- Share capital may be denominated in foreign currencies, and different classes may be denominated in different currencies, absent an express statutory prohibition.
- “Shares of a fixed amount” means a fixed nominal amount in the share’s designated currency; fluctuating exchange-rate equivalents do not negate nominal fixity.
- Court approval of a capital reduction should not be refused where the transaction does not return paid-up capital, reduce liability for unpaid capital, or prejudice creditors; creditor protection remains the central consideration.

## Conclusion

The court permitted an English public company to reduce and reorganize its capital into multiple currency-denominated share classes, holding that statutory language on stating share capital and “fixed amount” shares allowed multicurrency nominal values, and that the reduction was acceptable because it did not prejudice creditors or diminish capital maintenance protections.


In re Scandinavian Bank Grp. plc, [1988] 1 Ch. 87 (Ch. 1986)