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1
Kilian, Neels. "A South African–Australian Perspective on the Legal Implications Related to being “Entitled to Serve” as a Director." Potchefstroom Electronic Law Journal 23 (July 23, 2020): 1–27. http://dx.doi.org/10.17159/1727-3781/2020/v23i0a8174.
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This article focuses on an Australian piece of legislation and interesting case law, as well as how the Federal Court of Australia has applied Australia’s Corporations Act 2001, to characterise a person as a de facto director – that is, as a professed director whose appointment as such was defective. In this regard, the decisions of that Court will, as envisaged in the Constitution of the Republic of South Africa 1996, constitute persuasive authority. The Australian decision to be discussed in this article is significant in that the South African Companies Act 71 of 2008 does not contain substantively similar provisions to those of Australia’s Corporations Act 2001. For example, section 66(7) of the Companies Act 2008, contains the phrase “entitled to serve” as a director. This article explains the legal implications relevant to that expression, including whether it imposes a statutory condition precedent. This article also considers the validity of decisions taken by a person who is not “entitled to serve” as a director.
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Maroun, Warren, and Harvey Wainer. "To report or not to report." South African Journal of Economic and Management Sciences 16, no. 1 (February 26, 2013): 13–25. http://dx.doi.org/10.4102/sajems.v16i1.332.
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Whistle-blowing can play an important role in enhancing the effectiveness of corporate governance processes. In particular, legislation mandating that auditors blow the whistle on their clients’ transgressions can assist in overcoming agency-related costs and improve confidence in external audit. This is, however, only the case if regulatory reform enjoys cohesion. The Companies Act No. 71 of 2008, by introducing a definition of ‘reportable irregularities’ different from that in the Auditing Profession Act No. 26 of 2005 (APA); excluding ‘independent reviews’ from the scope of APA; and effectively exempting the majority of South African companies from the requirement either to be audited or reviewed, may materially undermine whistle-blowing by auditors in South Africa. In turn, this begs the question: for how long will South Africa rank first globally for the quality of its auditing practices?
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Boraine, A. "Formal Debt-Relief, Rescue and Liquidation Options for External Companies in South Africa." BRICS Law Journal 7, no. 4 (December 20, 2020): 85–126. http://dx.doi.org/10.21684/2412-2343-2020-7-4-85-126.
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This article discusses how foreign companies doing business in South Africa during periods of financial distress and registered locally as external companies are, as a recent High Court decision confirms, denied the formal debt-relief measures of business rescue and therefore a compromise with creditors because of being excluded by the definition of “company” in the Companies Act 71 of 2008. Nor, for the same reason, may these companies, if solvent, rely on the current liquidation procedures. But they may possibly use the procedure preserved in the otherwise repealed Companies Act 61 of 1973 for liquidation as far as the transitional arrangements in the Companies Act 71 of 2008 allow. The purposive solution suggested in this article for the interplay between the two Acts may need legislative attention. This article surveys other possibilities relevant to these companies such as informal voluntary arrangements, applications for winding-up, ordinary debt collection, and perhaps compulsory sequestration applications. Finally, it raises the policy issue for the legislature to consider why these companies should be denied business rescue and/or a compromise with their creditors when these formal debtrelief measures might help them survive their financial stress and emerge stronger, to the advantage of themselves, their creditors, their stakeholders and communities, and the entire nation. It is submitted that these issues could and should be considered as part of the current law reform process of South African insolvency law.
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Pretorius, M., and W. Rosslyn-Smith. "Expectations of a business rescue plan: international directives for Chapter 6 implementation." Southern African Business Review 18, no. 2 (January 29, 2019): 108–39. http://dx.doi.org/10.25159/1998-8125/5681.
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Preliminary analysis of business rescue plans suggested that a significant contrast exists between international reorganizational plans and those being published under the newly formed business rescue regime in South Africa. Since the South African regime has emerged from an international insolvency framework, an international benchmark was used to effectively assist in creating an evaluation tool. To better understand the expectations demanded of the plan, principles from comparable international regimes were identified. Data on regimes were obtained scrutinised and reported on; the expectations were extrapolated and aligned with Chapter 6 of the South African Companies Act, No. 71 of 2008, to determine whether the Act complied with a set of expectations based on an international perspective. The proposed framework shows the key principles that govern rescue plans worldwide. The framework could serve as a guideline for the evaluation of rescue plans and help practitioners to enhance what is seen as their key task, namely to compile the rescue plan. Comparison with the five key principles found by the research reveals particular shortcomings in Chapter 6 of the South African Companies Act of 2008. International regimes indicate that the rescue plan should adhere to a broader and more extensive set of expectations than those explicitly provided for by the Act.
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Cassim, Rehana. "The Device of Weighted Votes in Blocking the Removal of Directors from Office under the South African Companies Act 71 of 2008." Journal of African Law 63, no. 2 (June 2019): 281–302. http://dx.doi.org/10.1017/s0021855319000172.
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AbstractA director may serve a company in more than one capacity. In his capacity as a shareholder, a director may hold voting rights in the company. One consideration regarding the removal of a director from office is their removal by shareholders in circumstances where the directors are themselves shareholders in the company and hold weighted votes. This article appraises whether, under the South African Companies Act 71 of 2008, a shareholding-director who holds shares with weighted votes would validly and lawfully be able to block his removal from office by the company's shareholders. This article makes suggestions regarding the use of weighted votes to block the removal of directors from office, and calls for an important amendment to the South African Companies Act 71 of 2008 to prevent weighted votes being used as a device to block the removal of directors from office.
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Phakeng, M. "REGULATION OF MERGERS AND ACQUISITIONS IN TERMS OF THE SOUTH AFRICAN COMPANIES ACT 71 OF 2008: AN OVERVIEW." BRICS Law Journal 7, no. 1 (March 8, 2020): 91–118. http://dx.doi.org/10.21684/2412-2343-2020-7-1-91-118.
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The Companies Act 71 of 2008 (the 2008 Act) replaced the Companies Act No. 61 of 1973, effective 1 May 2011. The 2008 Act was aimed at keeping pace with developments in company law internationally. It is not intended to entirely replace the well-established principles and has largely retained the pre-existing South African company law. The mergers and acquisitions provisions are aimed at creating transparent, efficient, and simple procedures. Different types of mergers and acquisitions are clearly defined as “affected transactions” or “offers” in section 117. Section 118 provides for companies to which the provisions apply. The reasons for regulating these transactions and powers of the regulator – The Takeover Regulation Panel, have been reviewed, clarified, and improved. The previous section on disposal of all or greater part of assets or undertaking of a company has been re-written. The 2008 Act further introduces a new type of affected transaction in section 113, in the form of a “merger” or an “amalgamation.” The 2008 Act has retained the scheme of arrangement in section 114, but has changed its format by removing compulsory court application and approval. The courts get involved under certain prescribed circumstances. The 2008 Act has enhanced shareholder protection for fundamental transactions in the form of section 164 – Appraisal Rights and section 115, dealing with shareholder approval of fundamental transactions. Some scholars and practitioners have criticised certain provisions. However, in general, the provisions have received favourable commentary. They regarded as progressive and comparable with others internationally.
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Morajane, Tebogo. "The Binding Effect of the Constitutive Documents of Companies: The 1973 and 2008 Companies Acts of South Africa." Potchefstroom Electronic Law Journal/Potchefstroomse Elektroniese Regsblad 13, no. 1 (June 14, 2017): 170. http://dx.doi.org/10.17159/1727-3781/2010/v13i1a2631.
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This contribution examines the provisions of the constitutive documents of companies under two specific provisions, namely s 65(2) of the Companies Act 61 of 1973 and s 15(6) of the Companies Act 71 of 2008. The aim is to determine who is bound by these provisions, the circumstances which give rise to being bound by them, and the possible effect thereof on various parties. The provisions of the constitutive documents under section 65(2) of the 1973 Companies Act are interpreted by courts and academic writers to amount to a statutory contract between a company and its members and between members inter se. The members are said to be bound by the provisions of these documents only in their capacity as members. It is submitted, however, that the rights and obligations are granted to members in their capacity as such if they are membership rights which are granted by virtue on one’s membership. So far the courts have failed to provide a logical explanation of the concept “capacity of a member as such”. This failure and the “qua membership test” resulted in limitations in the interpretation of section 65(2): for example, the exclusion of persons who are regarded as outsiders. The directors, despite the fact that numerous provisions of the applicable article provides for their rights, have rights that are unenforceable via the articles, for being regarded as outsiders. The company on the other hand can enforce the obligations against the directors on the basis of breach of their fiduciary duties. These limitations called for a redraft of section 65(2). This contribution raises the legal challenges raised by the above. It arrives inter alia at the conclusion that the “qua membership test” may find application under the 2008 Companies Act, since members/shareholders may be allowed to exercise rights that are membership rights granted to them by virtue of their membership, and directors may be allowed to exercise rights that are granted to them in their official capacities as such.
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Bidie, Simphiwe. "Director's Duty to Act for a Proper Purpose in the Context of Distribution under the Companies Act 71 of 2008." Potchefstroom Electronic Law Journal 22 (September 19, 2019): 1–45. http://dx.doi.org/10.17159/1727-3781/2019/v22i0a4221.
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This paper seeks to critically analyse the requirements of the duty imposed on directors to act for a proper purpose as provided in section 76(3)(a) of the 2008 Act (Companies Act 71 of 2008) whenever they distribute company money and/or property. This analysis is conducted with the obligations imposed under sections 4 and 46 of the 2008 Act in mind. The purpose is not to question the inclusion of this duty in the 2008 Act. It is simply to question whether the common law interpretation of the duty still suffices in the face of section 76(3) of the 2008 Act, which seems to suggest that a different standard of judgment must be used. The argument that is made here is that the use of common law principles in interpreting proper purpose is well and good when the actions of directors are challenged based on the common law, but, where this duty has been incorporated into statutory law the interpretation of the duty in the context of the wording of the statute should be paramount. In addition, when interpreting any provision of the Act, consideration of the objects of the statute becomes inevitable. The interpretation of the duty cannot, in the face of the changes brought about by the statute, remain stagnant as a result of reliance on common law standards of judgment. The wording of the provision in question and the purpose of the statute cannot and must not be ignored; they must be given effect. A comparative approach will be adopted, using legislation and case law from Australia and Canada. The selection of these particular jurisdictions is based solely on the fact that like South Africa, their legal heritage is based on English common law, and a comparison of the three jurisdictions therefore makes sense.
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Pillay, Dr Surendran, Dr Rajendra Rajaram, and Kajal Ramnanun. "Ascertaining the Impact of Post-Commencement Finance on Business Rescue in Kwazulu-Natal, South Africa." Journal of Social Sciences Research, no. 63 (March 24, 2020): 236–44. http://dx.doi.org/10.32861/jssr.63.236.244.
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Corporate rescue in South Africa has been bedevilled by many challenges. The new South African Companies Act 71 of 2008 (hereafter referred to as “the Act”), which came into effect in May 2011 contains a new chapter titled “Business rescue and Compromise with Creditors”. Post commencement finance (PCF) is finance or credit approved for a company in business rescue, which is regulated by section 135 of the South African Companies Act. The Act provides for companies to secure PCF as turnaround investment to secure its financial well-being. However, it is difficult for a distressed business to access PCF as it is challenging to operate on a cash basis when they face the likelihood of insolvency or forced sale of their assets to remain sustainable. This was evident during the recent global financial crises when obstacles to accessing PCF were identified as the chief deterrent for businesses that require rescue or reorganization (Pretorius and Du Preez, 2013). A review was performed to assess what the impact was, of a distress company obtaining PCF in KZN. Empirical research includes a qualitative research design engaged to explore the impact of PCF on the success of business rescue efforts for distressed companies in KZN. Insights and understandings were drawn from the participation of business rescue practitioners in Kwa Zulu Natal. This included addressing the challenges of obtaining PCF and what finance is available. The findings from the literature review confirm that the barriers to obtaining PCF are the most limiting factors in rescuing businesses in distress in KZN and the challenges include the time frame within the business rescue plan and that financial institutions are not prepared to support a business rescue without collateral.
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Mupangavanhu, Brighton M. "Evolving Statutory Derivative Action Principles in South Africa: The Good Faith Criterion and Other Legal Grounds." Journal of African Law 65, no. 2 (March 26, 2021): 293–311. http://dx.doi.org/10.1017/s0021855321000115.
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AbstractThe recent Supreme Court of Appeal (SCA) judgment in Lazarus Mbethe v United Manganese of Kalahari raises jurisprudential questions regarding statutory derivative actions in South Africa. For example, the SCA did not agree with the court a quo's ruling that the discretion to be exercised by the court is limited by provisions of section 165(5). The SCA also questioned whether it is necessary for South African courts to follow the good faith criterion in the Australian case of Swansson v Pratt as adopted into South African law through Mouritzen v Greystones Enterprises (Pty) Ltd & Another. This article contributes to these questions, and proposes possible criteria for other requirements in section 165(5)(b) of the Companies Act 71 of 2008. These other requirements are that the statutory derivative action proceedings must involve “a trial of a serious question of material consequence to a company” and that proceedings be “in the best interests of the company”.
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Rautenbach, Christa, and Brighton M. Mupangavanhu. "Impact of the Constitution's Normative Framework on the Interpretation of Provisions of the Companies Act 71 of 2008." Potchefstroom Electronic Law Journal 22 (November 6, 2019): 1–24. http://dx.doi.org/10.17159/1727-3781/2019/v22i0a7417.
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Given the intention of section 7(a) of the Companies Act 71 of 2008 (the Act) to promote compliance with the Bill of Rights in the interpretation and application of company law in SA, this article assesses the extent to which the Act actually does this. The article thus seeks to showcase evidence of the Act's intentional alignment with the normative framework of the Constitution of the Republic of South Africa, 1996 (the Constitution). The paper does this by answering the question: what are the implications of the Constitution's normative framework on the interpretation and application of the Act? The term "normative framework" is defined, and a distinction is drawn between the descriptive and explanatory social science research questions and the legal research questions which are evaluative and normative in nature. The article provides examples of the contexts in which the intentional alignment of the Act with the Constitution's normative framework is evident. To this extent, commentary is made on the following selected issues: remedies to facilitate the realisation and enjoyment of rights established by company law; the direct and indirect horizontal application of the Bill of Rights to provisions of the Act; and a discernible court's duty to develop the common law as necessary to improve the realisation of the rights established by the Act. A point is made in the article that judicial decisions involving the application of company law must be justified by reference to a cohesive set of values from the Bill of Rights. This is part of transformative constitutionalism. It demands that even commercial law principles should no longer be blindly accepted simply because precedent says so, or for the reason that it is expedient for the purposes of commercial certainty. The article argues that the Act permits the direct horizontal application of the Bill of Rights on its provisions in two stated ways. It is also argued that the Act permits the indirect application of the Bill of Rights through the development of the common law where it is deficient in promoting the spirit, purport and objects of the Bill of Rights. The development of the common law, it is argued, is vital for producing an incremental and cohesive body of constitutionalised common law in the company law context.
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Njotini, Mzukisi. "Securing Shareholder Information in the Digital Age – An Analysis of the Proposed Amendments to Section 26 of the Companies Act." South African Mercantile Law Journal 32, no. 3 (2020): 334–59. http://dx.doi.org/10.47348/samlj/v32/i3a2.
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Amending company legislation has become a common occurrence in South Africa. The legislature has passed a number of statutes to alter the principles regulating corporate entities. It is noteworthy that the Companies Act 71 of 2008 is the most substantial of these amending statutes. This Act harmonised the legal principles governing the operation of companies, and brought companies closer to the developmental needs of society. It sought to promote economic grown, investor confidence and foreign investment, and accelerate the transportation of goods and services globally. Because of the need for companies to continue to promote innovation, the legislature proposed measures to repeal certain provisions of the Companies Act. Clause 4 of the Companies Amendment Bill of 2018 contains the proposed changes. The provision supports one of the cardinal ideals of an information society — to improve the free flow of information. However, the challenge with the section 4 provisions is that they are likely to endanger the sanctity of personal information stored online. Specifically, it is not completely clear to what extent the proposed amendments will enhance the integrity of online information, as opposed to weakening it.
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Jijana, Cawekazi, Nishika Chetty, and Anis Mahomed Karodia. "Investigating the Nature , Purpose and Effectiveness of Business Rescue in South Africa : Chapter 6 of Companies Act 71 of 2008 as Amended." Singaporean Journal of Business Economics and Management Studies 4, no. 11 (2016): 37–75. http://dx.doi.org/10.12816/0027222.
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Chetty, Nishika, Cawekazi Jijana, and Anis Mahomed Karodia. "Investigating the Nature , Purpose and Effectiveness of Business Rescue in South Africa : Chapter 6 of Companies Act 71 of 2008 as Amended." Kuwait Chapter of Arabian Journal of Business and Management Review 5, no. 3 (2015): 70–110. http://dx.doi.org/10.12816/0019019.
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Botha, Monray Marsellus. "The Different Worlds of Labour and Company Law: Truth or Myth?" Potchefstroom Electronic Law Journal/Potchefstroomse Elektroniese Regsblad 17, no. 5 (April 10, 2017): 2103. http://dx.doi.org/10.17159/1727-3781/2014/v17i5a2157.
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Recently the South African company law landscape underwent a dramatic overhaul with the introduction of the Companies Act 71 of 2008. Central to company law is the promotion of corporate governance. It is clear that companies are no longer accountable just to their shareholders but also to society at large. Leaders should, for example, direct company strategies and operations with a view to achieving the triple bottom-line (economic, social and environmental performance) and should thus also manage the business in a sustainable manner. An important question in company law still today is in whose interest the company should be managed. Different stakeholders of importance to companies include shareholders, managers, employees, creditors etcetera. The Companies Act aims to balance the rights and obligations of shareholders and directors within companies, and it encourages the efficient and responsible management of companies. When considering the role of employees in corporations it must be noted that the Constitution grants every person a fundamental right to fair labour practices. Social as well as political changes were evident after South Africa's re-entering the world stage in the 1990s. Changes in socio-economic conditions within a developing country were also evident. These changes had a major influence on the South African labour law dispensation. Like company law, labour law is to a large extent also codified. Like company law, no precise definition of labour law exists. It is clear from the various definitions of labour law that it covers both the individual and collective labour law and that various role-players are involved. Some of these role-players include trade unions, employers/companies, employees, and the state. The various relationships between these parties are ultimately what will guide a certain outcome if there is a power play between them. In 1995 the South African labour market was transformed with the introduction of the Labour Relations Act 66 of 1995. The LRA remains the primary piece of labour legislation that governs labour law in South Africa. The notion of industrial democracy and transformation of the workplace are central issues in South African labour law. This is due to the constitutional changes that have taken place in South Africa, where the protection of human rights and the democratisation of the workplace are advanced. Before the enactment of the LRA, employee participation and voice was a much-debated topic not only locally but also internationally. It is therefore essential when considering employee participation to take due cognisance of both the labour and company law principles that may be pertinent, as well as the need for workers to have a voice in the workplace and for employers to manage their corporations. This article will attempt to indicate how the different functions, theories and models of labour and company law accommodate and promote the interests of employees in corporations and will also attempt to reconcile these differences.
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Phiri, Siphethile. "Piercing the corporate veil: A critical analysis of section 20(9) of the South African Companies Act 71 of 2008." Corporate & Business Strategy Review 1, no. 1 (2020): 17–26. http://dx.doi.org/10.22495/cbsrv1i1art2.
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When a company is incorporated it becomes a juristic entity with rights and obligations of its own and is distinct from its shareholders and directors. Hence, company liabilities are not those of its shareholders and directors. However, section 20(9) of the Companies Act 71 of 2008 grants the court the discretion to disregard the corporate veil where there is an unconscionable abuse of the juristic personality so as to impose personal liability upon directors or any other person involved in that transaction. However, the section fails to define what constitutes “unconscionable abuse” which is the key to the application of that provision. This research thus seeks to discover what constitutes unconscionable abuse of the juristic personality. Simply put, this research aims to identify the circumstances under which the corporate veil may be pierced. The results from this extensive inquiry are that the term ‘unconscionable abuse’ is a legislative derivate from the various terms used by the courts at common law to justify the disregarding of the separate legal personality of the corporate entity. Therefore, the inescapable conclusion reached is that just as those terms used at common law are confounding, so shall this rather legislative innovation remain to be confounding until a specific meaning is assigned to it by the parliament.
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Subramanien, Darren. "Section 165(5)(b) of the Companies Act 71 of 2008: A discussion of the requirement of good faith." Journal of Corporate and Commercial Law & Practice, The 6, no. 2 (2020): 212–32. http://dx.doi.org/10.47348/jccl/v6/i2a8.
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In terms of s 165(5)(b) of the Companies Act 71 of 2008, ‘the court must be satisfied that the applicant is acting in good faith’; that ‘the proceedings involve the trial of a serious question of material consequence to the company’; and that it is ‘in the best interests of the company’ that the applicant(s) be granted leave. The legislature has chosen to provide guiding criteria that are vague and general rather than detailed legal steps for the exercising of judicial discretion. It would therefore be open to the courts to provide an interpretation of the words found in s 165(5)(b) especially regarding the good faith requirement. This article discusses the requirement of good faith. The interpretation and application of the good faith requirement found in s 165(5)(b) will ultimately determine the success or failure of the new statutory derivative action as an adequate remedy for aggrieved applicants who may seek redress on the company’s behalf, if the company or those in control of it improperly fail or refuse to do so. The comparable sections in the law of the United Kingdom will be evaluated in order to determine whether it is feasible to transplant selected rules and principles into South African law.
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Cassim, Rehana. "Notes: Declaring directors of state-owned entities delinquent: Organisation Undoing Tax Abuse v Myeni." South African Law Journal 138, no. 1 (2021): 1–19. http://dx.doi.org/10.47348/salj/v138/i1a1.
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This note discusses and critically analyses the judgment in Organisation Undoing Tax Abuse v Myeni [2020] 3 All SA 578 (GP), in which the court declared a director delinquent for her lifetime in terms of s 162(5) of the Companies Act 71 of 2008. The basis of the application related to the director’s conduct while she was a nonexecutive director and chairperson of South African Airways SOC Ltd. The judgment is commendable for its strict stance against errant directors of state-owned companies. It is the first delinquency application brought by a party acting in the public interest, and the first judgment to impose a lifelong delinquency declaration on a director.
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Rosslyn-Smith, Wesley, and Marius Pretorius. "Stakeholder expectations of the Business Rescue Plan from a South African perspective." Southern African Journal of Entrepreneurship and Small Business Management 7, no. 1 (June 23, 2015): 1. http://dx.doi.org/10.4102/sajesbm.v7i1.4.
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<p><strong>Background:</strong> A business rescue plan has to comply with a new and vague set of obligations regulated by South African legislation. Expectations of the plan are largely unknown, yet crucial in determining compliance. Establishing an effective benchmark for the plan is essential for the growth and success of the industry.</p><p><strong>Purpose:</strong> The study set out to answer these questions: What are the most crucial elements needed to fill the gap between the specifics of the Companies Act (2008) and the further elements needed to meet the plan’s primary objective of providing adequate information to stakeholders? What are the international principles applicable to rehabilitation plans and what elements underpin them?</p><p><strong>Method:</strong> Thirteen industry experts were selected and interviewed to identify the most crucial elements of the business rescue plan. Sampling was a combination of convenience and purposive sampling. Data collection obtained data on subjects’ opinions, rankings, agreement and ratings.</p><p><strong>Results:</strong> The study was able to confirm that there is indeed a gap between the mandatory elements prescribed in section 150(2) and the provision of sufficient information required by section 150(1) of the Companies Act No. 71 of 2008. The survey revealed that in the subjects’ expert opinion, the international principles are applicable to the business rescue plan.</p><p><strong>Conclusion:</strong> The crucial elements of the rehabilitation plan selected by the experts offer insight and clarity in terms of what is expected of the plan.</p><p> </p><p><strong>Key words:</strong> Business Rescue, Companies Act, Business Plans, Measurement, Insolvency, Turnaround, Reorganisation</p>
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Nwafor, Anthony. "Protection of shareholders class rights in company law." International Journal of Law and Management 63, no. 5 (February 4, 2021): 517–34. http://dx.doi.org/10.1108/ijlma-11-2020-0288.
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Purpose A company that is registered with share capital may issue different classes of shares and may confer rights on members, which place them in different classes in the company’s organisational structure. This paper is concerned with the propensity for encroachment on such vested class rights as companies strive to wriggle out of business challenges spawn by the COVID-19 pandemic. The purpose of this study is to ascertain the extent of protection that the law accords to the different classes of shareholders and members in a company especially when the company seeks to vary the vested class rights. Design/methodology/approach A doctrinal methodology, which relies on existing literature, case law and statutory instruments, is adopted to explore the nature of class rights and the adequacies of the remedial measures availed by statute to the aggrieved bearers of class rights in the context of the South African Companies Act 71 of 2008 with inferences drawn from the UK companies statute and case law. Findings The findings indicate that accessing the remedies available to aggrieved shareholders under the relevant statutory provisions are fraught with conditionality, which could make them elusive to those who may seek to rely on such provisions to vindicate any encroachment on their class rights. Practical implications The paper embodies cogent information on the interpretation and application of the relevant statutory provisions geared at the protection of shareholders class rights, which should serve as guides to companies and the courts in dealing with matters that affect the vested class rights of shareholders and members of a company. Originality/value The paper shows that protections offered to classes of shareholders under the law can also be extended to classes of members who are not necessarily shareholders, and that shareholders who seek to vindicate their class rights may conveniently rely on Section 163 that provides for unfair prejudice remedy to avoid the onerous conditions under Section 164 of the South African Companies Act 71 of 2008, which directly deals with class rights.
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Mupangavanhu, Brighton M. "Standard of Conduct or Standard of Review? Examination of an African Business Judgment Rule under South Africa's Companies Act 71 of 2008." Journal of African Law 63, no. 1 (January 18, 2019): 127–50. http://dx.doi.org/10.1017/s002185531800027x.
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AbstractThis article highlights that section 76(4)(a) of South Africa's Companies Act, which reflects the business judgment rule (BJR) concept, is a standard of review, providing a means of determining whether a director has met his or her undertakings under section 76(3). The article suggests that section 76 should be titled “Standards of conduct and review” instead of referring only to standards of conduct. It draws a clear distinction between standards of conduct (including the personal financial interests disclosure requirements) on one hand, and a standard of review on the other. After tracing the traditional international requirements of BJR, the article analyses the decision-making requirements under section 76(4)(a). It concludes that, while section 76(4)(a) compares favourably with US and Australian laws, the omission of a good faith requirement is unfortunate since that is a critical component of decision-making. The article proposes that good faith and proper purpose under section 76(3)(a) should form part of the section 76(4)(a) requirements.
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Maloka, Tumo Charles, and Shandukani Muthugulu-Ugoda. "DEADLOCK PRINCIPLE AS A GROUND FOR JUST AND EQUITABLE WINDING UP OF A SOLVENT COMPANY: THUNDER CATS INVESTMENTS 92 (PTY) LTD V NKONJANE ECONOMIC PROSPECTING INVESTMENT (PTY) LTD 2014 5 SA 1 (SCA)." Potchefstroom Electronic Law Journal/Potchefstroomse Elektroniese Regsblad 19 (August 15, 2016): 1. http://dx.doi.org/10.17159/1727-3781/2016/v19i0a1153.
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The question addressed by the Supreme Court of Appeal in Thunder Cats Investment 92 (Pty) Ltd v Nkonjane Economic Prospecting & Investments (Pty) Ltd 2014 5 SA 1 (SCA) (hereafter the "Thunder Cats") provides much-needed guidance on the deadlock principle as well as the breadth and scope of the "just and equitable ground for winding up in terms of s 81(1)(d) (iii) of the Companies Act 71 of 2008. The facts, the issues and the contextual authority of Thunder Cats also bring to fore the lacuna in the just and equitable winding up provisions of the current Companies Act which lacuna has so far received no judicial or academic consideration. This Note contends the fact that the just and equitable winding up provisions do not countenance any deviation from the statutory prescriptions once the factual grounds for just and equitable winding up have been established is not in consonance with the spirit, purport and objects of Companies Act, and, in particular those of Chapter Six of the Act which have introduced the innovative business rescue scheme into South African corporate law landscape. The facts, the issues and the contextual authority of Thunder Cats will be reviewed at length in the ensuing discussion.
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Biggs, A. K., C. B. Scheepers, and M. M. Botha. "The influence of post-2008 legislation on an acquisition that turned hostile: A South African case study." South African Journal of Business Management 48, no. 3 (September 29, 2017): 47–62. http://dx.doi.org/10.4102/sajbm.v48i3.35.
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Hostile acquisitions have a significant impact on managers and employees. The possibility of an acquisition creates uncertainty and when the acquisition turns hostile it is even more disruptive to the target organisation. Also, negative perceptions are often created in the media about the acquirer that influence employees’ attitudes in the target organisation. Processes to successfully integrate the acquirer and target organisations are impacted by these antagonistic pre-acquisition circumstances. The Companies Act (no.71 of 2008) created opportunities for shareholders to hold an acquired company’s management accountable for financial performance and the researchers set out to investigate how the intent of the new legislation played out in practice, by studying an acquisition that turned hostile. The single case study research methodology revealed the manoeuvring of both the acquiring and acquired companies which utilised the mechanisms available to them through the new legislative, regulatory and corporate governance landscapes. The researchers provide an extensive review of the relevant mergers and acquisitions’ literature, as well as influence of the international legislative environment on the current local regulations. These regulations in turn, inform corporate governance and ultimately board behaviours. The researchers conducted qualitative interviews with key role players as well as legal and financial experts. The findings of the thematic analysis and triangulation process, informed a conceptual frame of three episodes.
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Mongalo, Tshepo H. "Notes: The unlamented demise of the common-law derivative action: A note remembering Michael Larkin." South African Law Journal 138, no. 3 (2021): 508–21. http://dx.doi.org/10.47348/salj/v138/i3a3.
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This contribution presents an exposition of how the common-law rules relevant to the common-law derivative action would have clashed with the current statutory derivative action remedy had the common law not been repealed by s 165(1) of the Companies Act 71 of 2008. The analysis of the possible impact of the common law is a relevant and timely one — irrespective of the fact that a statutory derivative action and remedy has been introduced in s 165(2) of the Companies Act — as it provides lessons to policy-makers on how to deal effectively with common-law rules whose time has passed and must be eradicated, particularly in corporate law. This is so since the Supreme Court of Appeal judgment in Hlumisa Investment Holdings (RF) Ltd & another v Kirkinis & others 2020 (5) SA 419 (SCA) has recently endorsed previous Constitutional Court judgments which confirmed the continued validity of the common-law principle of statutory interpretation that a statute should not be taken to alter the common law unless it is clear that that is what was intended. The contribution arrives at the conclusion that the limiting effect of English judgments, particularly Edwards v Halliwell [1950] 2 All ER 1064 and Prudential Assurance v Newman Industries (CA) [1982] Ch D 204 would have still been applicable in South Africa, even though they allow for a conservative exception to the rule in Foss v Harbottle in providing for derivative action claims at common law.
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Tshipa, Jonty, Leon Brummer, Hendrik Wolmarans, and Elda Du Toit. "The impact of flexible corporate governance disclosures on value relevance. Empirical evidence from South Africa." Corporate Governance: The International Journal of Business in Society 18, no. 3 (June 4, 2018): 369–85. http://dx.doi.org/10.1108/cg-05-2017-0106.
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PurposeConsidering that the Johannesburg Stock Exchange (JSE) has enacted in its Listings Requirements, compliance of listed firms to International Financial Reporting Standards (IFRS) and King Code of Good Corporate Governance, this study aims to investigate the impact of internal corporate governance attributes on the value relevance of accounting information in South Africa.Design/methodology/approachThe fixed effect generalised least squares regression is used for the period from 2002 to 2014. Proxies for internal corporate governance are the size of the board, leadership structure, board activity, staggered board, boardroom independence, presence of key committees and board gender diversity. Value relevance is measured using the adjustedR2derived from a regression of stock price on earnings and equity book values by following Ohlson’s accounting-based valuation framework.FindingsThe findings suggest that the net asset value per share is value-relevant in South African listed firms and also when the boardroom is largely independent. The value of earnings per share (EPS) is more robust when corporate governance structures, such as separating the roles of chief executive officer and chairperson, proportion of board-independent board members and presence of board committees, are in place. This suggests that EPS favours agency and resource dependence theories.Practical implicationsThe value relevance of accounting information in the South African financial market underscores the importance of requisite rules and supervision regarding financial reporting to allow asset owners and managers in the allocation of capital decisions. This study supports the view that corporate governance plays a key role in ensuring, amongst others, credible financial reporting. The outcome of this study could inform the JSE to enforce, even stricter, compliance with IFRS and corporate governance to improve the value relevance of financial information.Social implicationsSignificant corporate governance reforms around the world suggest that regulators and policy makers consider corporate governance as a pertinent tonic in ensuring, amongst others, credible financial reporting. The implications of the study might assure users of financial information of how compliance to corporate governance practices may influence the value of the firm. This paper provides empirical evidence in the South African context that EPS, unlike net asset value per share, is driven by corporate governance structures.Originality/valueThe period of this study is unique, because it covers a relatively stable economic period before the financial crisis, a challenging and unstable period of time when the financial crisis materialised, and the aftermath of the financial crisis. In addition, the examination period of the study also covers the two corporate governance reforms in South Africa, King II in 2002 and King III in 2009, as well as the new Companies Act No. 71 of 2008. These exogenous factors may influence the results.
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Mpofu, Kudzai, Anthony O. Nwafor, and Koboro J. Selala. "Exploring the role of the business rescue practitioner in rescuing a financially distressed company." Corporate Board role duties and composition 14, no. 2 (2018): 20–26. http://dx.doi.org/10.22495/cbv14i2art2.
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The emphasis on corporate sustainability as against liquidation in the South African Companies Act 71 of 2008 creates an important figure in the person of the business rescue practitioner. The practitioner in that capacity supplants the board and is insulated from the relevant elements of shareholder control in the discharge of the task of rescuing the financially distressed company. The article interrogates, through doctrinal approach, the efficacy of the statutory provisions relating to the role of the business rescue practitioner in the business rescue process and argues against the disqualification of juristic persons from appointment as business rescue practitioners. While respecting the subjective decision of the practitioner in the preparation of the rescue plan, the paper considers that such subjective decision should withstand some level of objective assessment to enjoy credibility, just as the practitioner should conform to a high level of judicial scrutiny as an officer of the court to be absolved from any liability arising from a breach of duty.
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Le Roux, Ingrid, and Kelly Duncan. "The naked truth: creditor understanding of Business Rescue: A Small Business perspective." Southern African Journal of Entrepreneurship and Small Business Management 6, no. 1 (December 31, 2013): 57. http://dx.doi.org/10.4102/sajesbm.v6i1.33.
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<p><strong>Purpose:</strong> to study the level of knowledge and awareness of business rescue of entrepreneurs who are potential creditors of businesses filing for rescue, and to identify the major issues and concerns from the creditors’ point of view.</p><p><strong>Methodology:</strong> the design of the study was a survey to examine the level of knowledge, awareness and experience of Chapter 6 of The South African Companies Act No. 71 of 2008 and to seek to describe the status from a creditor’s perspective.</p><p><strong>Findings:</strong> The literature revealed the role that creditors have to play in the business rescue process. It indicated the potential for creditors to emerge with a better return than the one that liquidation would offer. The primary data demonstrated that the respondents’ level of knowledge and awareness of and about rescue and the roles and powers associated with the Companies Act is extremely low and of grave concern to the industry.</p><p><strong>Practical Implications:</strong> there is a large gap between the level of knowledge available and what is actually known. The result is entrepreneurs who do not comprehend the significance of this legislation and its potential consequences for their business.</p><p><strong>Originality:</strong> this paper addresses the limited research available on business rescue issues. Due to the newness of the Act, sparse case law exists and little scientific research data is available.</p><p><strong>Key words:</strong> Companies Act, business rescue, creditors, knowledge, awareness</p>
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Nwafor, Anthony O. "Moratorium in business rescue scheme and the protection of company’s creditors." Corporate Board role duties and composition 13, no. 1 (2017): 59–67. http://dx.doi.org/10.22495/cbv13i1p6.
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The concept of business rescue has been acknowledged as one of the innovative paths towed by the South African Companies Act 71 of 2008. The primary purpose of business rescue, as set down by the law, is to facilitate the rehabilitation of a company that is in financial distress. Attaining that purpose could, however, come at a price to the company’s creditors. The law imposes a temporary restriction on legal proceedings, enforcement actions and the property rights of creditors. Unless the written consent of the business rescue practitioner or the leave of the court is first sought and obtained, the creditors cannot have any recourse against the company. The paper argues that the statutory moratorium could constitute an affront on the constitutional right of property, and further contends that while the business rescue practitioner whose governance role naturally supplants that of the board, would not ordinarily grant such consent, the courts are seemingly more neutrally disposed for recourse by the creditors who seek to exercise their rights against the company. In weighing the competing interests, greater consideration should be accorded to the creditors, the protection of whose interests are generally more compelling whenever the company is in financial distress.
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Kloppers, Henk J. "Driving Corporate Social Responsibility (CSR) through the Companies Act: an Overview of the Role of the Social and Ethics Committee." Potchefstroom Electronic Law Journal/Potchefstroomse Elektroniese Regsblad 16, no. 1 (April 26, 2017): 165. http://dx.doi.org/10.17159/1727-3781/2013/v16i1a2307.
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The corporate social responsibility (CSR) movement can be described as a bundle of trends comprising regulatory frameworks aimed at improving corporate practices and leading to changes in these practices, the mobilisation of corporate role players to support the development of states, and a management trend the purpose of which is to enhance the legitimacy of a business. Government is regarded as one of the most important driving forces behind the CSR agenda and it has a particularly important role to play in the creation of an enabling CSR environment. In general, advocates of legislative involvement in framing the CSR policy highlight the failure of existing voluntary systems as one of the main reasons why the state should play a more important role in the facilitation of CSR. Although governments realise the importance of encouraging socially responsible business, it should be noted that CSR should not replace regulation or legislation concerning social rights. Furthermore CSR should not be seen as shifting (or outsourcing) the state's responsibility for the provision of basic services (such as education or the provision of health services) to the private sector and thus "privatising" the state's responsibilities. However, the legacies of apartheid remain firmly entrenched in the social problems facing South Africa and it seems as if the Government is unable to deliver the social and physical infrastructure required to effect the desired transformation, thus necessitating the engagement of the private sector. The role of Government in establishing a CSR policy framework and driving CSR has become increasingly important. The (perceived) failure of the welfare state has given further impetus to the move of governments toward tapping into the resources of the private sector (through their CSR) in order to address socio-economic challenges. A purely voluntary approach to CSR without any legislative intervention will not succeed – a clear public policy requiring the implementation of socially responsible practices by the entire private sector is a necessity. Governments in general are increasingly beginning to view CSR as cost-effective means to enhance their sustainable development strategies, and as a part of their national competitiveness strategies to attract foreign direct investment. Given South Africa's history, legislation should be viewed as one of the main instruments enabling the Government to address the private sector's social, environmental and economic outreach activities.Against this background, this contribution identifies the regulations released in terms of the Companies Act 71 of 2008 in which the issue of the social and ethics committee is dealt with, as an important measure taken by Government to create a possible CSR platform. This contribution argues that the requirements regarding the creation of a social and ethics committee have the potential to embed the CSR notion in the corporate conscience. The aim of the contribution is to provide an overview of the role of the social and ethics committee, as envisaged by the Companies Regulations, 2011, as a potential driver of CSR.
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Rautenbach, Christa. "Editorial." Potchefstroom Electronic Law Journal/Potchefstroomse Elektroniese Regsblad 16, no. 1 (April 26, 2017): 0. http://dx.doi.org/10.17159/1727-3781/2013/v16i1a2330.
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The first issue of 2013 contains fifteen contributions dealing with a potpourri of themes. The first contribution is an oratio presented by the retired Dean of the Faculty of Law of the NWU and former editor of PER, Francois Venter, during his exodus in October 2012. He gave his presentation in his mother tongue, Afrikaans, and asks the question if one may assume that being a professor entails belonging to a profession, in other words, an academic profession. The second oratio was a keynote speech delivered by Torsten Stein, the Director of the Institute of European Studies and holder of the chair for European law and European Public Law at Saarland University, Germany. He delivered his speech during November 2012 at the 3rdHuman Rights Indaba on The Role of International Law in Understanding and Applying the Socio-economic Rights in South Africa's Bill of Rights, which was held by the Faculty of Law (NWU, Potchefstroom Campus) in collaboration with the Konrad-Adenauer Foundation. He shared some thoughts about the nature, development and implementation of socio-economic rights within an international and European setting. The next nine articles make up the bulk of this issue. The first one is by Babatunde Fagbayibo, who gives an analytical overview of the common problems affecting supranational attempts in Africa. He argues that Africa's efforts to solidify its unity should be geared towards building on the experiences of past and present experiments at the sub-regional level. Samantha Goosen discusses the very thorny issue of battered women and the elements of self-defence if she has to stand trial for killing her husband. Recent developments in the area of pro bono legal services are the heart of Dave Holness' article. He focuses on legal service delivery for the indigent by attorneys in private practice acting pro bono in civil rather than criminal matters. Henk Kloppers discusses the very topical issue of corporate social responsibility. He gives an overview of the social and ethics committee created in terms of the Companies Act 71 of 2008 as a potential driver of corporate social responsibility. The always newsworthy theme of HIV/AIDS and the question of whether to disclose or not to disclose one's status forms the focal point of Andra le Roux-Kemp's contribution. Chucks Okpaluba gives an overview of South African and Commonwealth decisions dealing with the issue of reasonable and probable cause in the law of malicious prosecution. The never-ending problem of language diversity once again comes to the fore in the article by Loot Pretorius. He asks the question if the recently adopted Use of Official Languages Act 12 of 2012 complies with the normative instructions of the Constitution of the Republic of South Africa, 1996. In his second essay on the Child Justice Act 75 of 2008, Stephan Terblanche deals with a number of procedural issues related to the sentencing of child offenders. The last article, which is by Bonnie Venter, deals with the ethical question of whether the payment of kidney donors could be regarded as constitutionally acceptable or not. In the first of five notes, Nqobizwe Ngema asks if the African custom of theleka (the withholding of a wife by her father or guardian from her husband to coerce him to pay the outstanding lobolo) has an impact on the custody of children in the context of the best interest of the child. The central question Phazha Ngandwe asks is how states can discharge their duties and obligations vis-à-vis their nationals without perpetuating the bottlenecks to and the stigma that attaches to migration and thereby upsetting the international and regional integration objectives of the free movement of people. Mzukisi Njotini's note discusses the adequacy of South Africa's measures designed to protect critical information infrastructures. In the second last note, Anthea Wagener considers the practice of South African motor-vehicle insurers of using gender as a rating variable to classify risks into certain classes, thereby determining insurance premiums, and asks if this practice boils down to unfair discrimination. The final note by Anri Botes deals with the history of labour hire in our neighbouring country, Namibia.
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Pretorius, Marius, and Wanya Du Preez. "Constraints on decision making regarding post-commencement finance in Business rescue." Southern African Journal of Entrepreneurship and Small Business Management 6, no. 1 (December 31, 2013): 168. http://dx.doi.org/10.4102/sajesbm.v6i1.39.
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<p>Since its introduction, business rescue has become a critical consideration in business strategy decision making. One of the critical components of business rescue, which appears largely unsuccessful to date, involves securing post-commencement finance (PCF) to restore the company’s financial health. Despite extensive theory in the literature on failure, there is a void regarding post-commencement finance. Specialist practitioners and financiers with extensive experience in rescue and turnaround were interviewed in this study. Findings showed that many critical factors and reasons for lack of interest are due to the newness of the South African Companies Act 71 of 2008 (introduced May 2011). These include business rescue filing being left too late; the poor financial state of the business that files for rescue; and the significant impact on the outcome by some of the key players (especially the financiers and business rescue practitioners). Better understanding of this aspect would be beneficial for creditors, rescue practitioners, shareholders, government regulators, court officials and educators alike.</p><p><strong>Key words:</strong> business rescue, post-commencement finance, turnaround, decision making</p>
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Nwafor, Anthony O. "The goal(s) of corporate rescue in company law: A comparative analysis." Corporate Board role duties and composition 13, no. 2 (2017): 20–31. http://dx.doi.org/10.22495/cbv13i2art2.
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The concept of corporate rescue lays emphasis on corporate sustainability than liquidation. This trend in corporate legislation which featured in the United Kingdom Insolvency Act of 1986, Australian Corporations Act 2001, Indian Sick Industrial Companies (Special Provisions) Act of 1985 (as replaced by Companies Act, 2013 and supplanted by the Insolvency and Bankruptcy Code, 2016) has been adopted in the South African Companies Act of 2008. The goal(s) of corporate rescue in some of these jurisdictions are not clearly defined. The paper examines, through a comparative analysis, the relevant statutory provisions in the United Kingdom, India, Australia and South Africa and the attendant judicial interpretations of those provisions with a view to discovering the goal(s) of corporate rescue in those jurisdictions. It is argued that while under the United Kingdom and Australian statutory provisions, the administrator could pursue alternative goals of either rescuing the company or achieving better results for the creditors; the South African and Indian statutory provisions do not provide such alternatives. The seeming ancillary purpose of crafting a fair deal for the stakeholders under the South African Companies Act’s provision is not sustainable if the company as an entity cannot be rescued.
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Cassim, Maleka Femida. "The Contours of Profit-Making Activities of Non-Profit Companies: An Analysis of the New South African Companies Act." Journal of African Law 56, no. 2 (August 23, 2012): 243–67. http://dx.doi.org/10.1017/s0021855312000046.
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AbstractWhile for-profit companies regularly embark on non-profit activities, the converse issue has recently come to attention, namely whether non-profit companies may embark on profit-making activities. This has given rise to a confusing conundrum of practical importance, not only in South Africa but also in other jurisdictions. This article discusses whether non-profit companies, under the South African Companies Act of 2008, may have purely commercial objects. It also addresses the intertwined question of the contours of permissible profit-making activities. Since the non-profit company is the modern successor to the section 21 company under the previous Companies Act of 1973, this article considers the recent case of Cuninghame v First Ready Development 249, in which the Supreme Court of Appeal was faced with the problem of a section 21 company with a commercial object. The article also explores the administration of rental pool agreements by non-profit companies, which arose in the Cuninghame case.
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Langa, P., E. I. Edoun, and V. Naidoo. "Success Factors for Creating Spin-Out Companies by South African Publicly Financed Research and Development Institutions: A Resource-Based View Perspective." Journal of Economics and Behavioral Studies 10, no. 6(J) (December 22, 2018): 113–28. http://dx.doi.org/10.22610/jebs.v10i6(j).2603.
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Technology commercialisation using spin-out companies has shown to be a viable option by publicly financed research and development (R&D) institutions internationally. In South Africa (SA) this trend of spin-out company creation for technology commercialisation is anticipated to be on the rise since the inception of the Intellectual Property Rights from Publicly Financed Research and Development Act number 51 of 2008 (IPR-PFRD Act). This study aimed at trying to understand the factors that influence the successful creation of spin-out companies by SA publicly financed R&D institutions, utilising the RBV as the main theoretical framework. A survey questionnaire was distributed using a purposive sample approach to 49 key individuals (technology transfer professionals) who have been involved in spin-out creation in the past and the response was received from 17 respondents. A mixed methods research methodology was utilised and the data was presented using descriptive statistics and narration. The results of the data indicate a similar pattern to international trends and in some instances unique resource combinations that are relevant to SA.
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Langa, P., E. I. Edoun, and V. Naidoo. "Success Factors for Creating Spin-Out Companies by South African Publicly Financed Research and Development Institutions: A Resource-Based View Perspective." Journal of Economics and Behavioral Studies 10, no. 6 (December 22, 2018): 113. http://dx.doi.org/10.22610/jebs.v10i6.2603.
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Technology commercialisation using spin-out companies has shown to be a viable option by publicly financed research and development (R&D) institutions internationally. In South Africa (SA) this trend of spin-out company creation for technology commercialisation is anticipated to be on the rise since the inception of the Intellectual Property Rights from Publicly Financed Research and Development Act number 51 of 2008 (IPR-PFRD Act). This study aimed at trying to understand the factors that influence the successful creation of spin-out companies by SA publicly financed R&D institutions, utilising the RBV as the main theoretical framework. A survey questionnaire was distributed using a purposive sample approach to 49 key individuals (technology transfer professionals) who have been involved in spin-out creation in the past and the response was received from 17 respondents. A mixed methods research methodology was utilised and the data was presented using descriptive statistics and narration. The results of the data indicate a similar pattern to international trends and in some instances unique resource combinations that are relevant to SA.
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Motlatla, Mokete, and Thelmah Xavela Maluleke. "Assessment of Knowledge about Healthcare Risk Waste Management at a Tertiary Hospital in the Northern Cape Province, South Africa." International Journal of Environmental Research and Public Health 18, no. 2 (January 8, 2021): 449. http://dx.doi.org/10.3390/ijerph18020449.
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This study aimed at assessing the knowledge about healthcare risk waste (HCRW) management among doctors, professional nurses, pharmacists and laboratory technicians, in accordance with National Environmental Management, Waste Act 59 of 2008, Constitution of South Africa and sustainable development goals (SDG). The quantitative cross-sectional study was conducted, using self-administered questionnaires and stratified random sampling was used. Data was analyzed using the descriptive and inferential statistics. One hundred and forty-four participants were included in the study. The majority 90.28% of the participants were aged 19–50 years, females (71%), professional nurses (36%), and they had 1–10 years of experience (71%). The health professionals were knowledgeable of sharps waste (89%), slightly over (52%) knew anatomical waste, whereas (27%) and (17%) knew radioactive and cytotoxic waste, respectively. Health professionals (92%) agreed that the sharps-waste container should be disposed of in a yellow bin container, at least (63%) and (27%) agreed that red liner and box should be used for both infectious non anatomical waste and for cytotoxic waste. The null hypothesis was tested on knowledge versus age, profession and gender, and evidence against it was found on waste storage period in all three variables where chi-square and Fisher exact p-values were less than the 5% significant level. More attention should be directed towards similar HCRW management training at the hospital for all health professionals and behavior modification. The hospital management must ensure that HCRW-trained health professionals and HCRW management officials put into practice what they have learnt.
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Motlatla, Mokete, and Thelmah Xavela Maluleke. "Assessment of Knowledge about Healthcare Risk Waste Management at a Tertiary Hospital in the Northern Cape Province, South Africa." International Journal of Environmental Research and Public Health 18, no. 2 (January 8, 2021): 449. http://dx.doi.org/10.3390/ijerph18020449.
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This study aimed at assessing the knowledge about healthcare risk waste (HCRW) management among doctors, professional nurses, pharmacists and laboratory technicians, in accordance with National Environmental Management, Waste Act 59 of 2008, Constitution of South Africa and sustainable development goals (SDG). The quantitative cross-sectional study was conducted, using self-administered questionnaires and stratified random sampling was used. Data was analyzed using the descriptive and inferential statistics. One hundred and forty-four participants were included in the study. The majority 90.28% of the participants were aged 19–50 years, females (71%), professional nurses (36%), and they had 1–10 years of experience (71%). The health professionals were knowledgeable of sharps waste (89%), slightly over (52%) knew anatomical waste, whereas (27%) and (17%) knew radioactive and cytotoxic waste, respectively. Health professionals (92%) agreed that the sharps-waste container should be disposed of in a yellow bin container, at least (63%) and (27%) agreed that red liner and box should be used for both infectious non anatomical waste and for cytotoxic waste. The null hypothesis was tested on knowledge versus age, profession and gender, and evidence against it was found on waste storage period in all three variables where chi-square and Fisher exact p-values were less than the 5% significant level. More attention should be directed towards similar HCRW management training at the hospital for all health professionals and behavior modification. The hospital management must ensure that HCRW-trained health professionals and HCRW management officials put into practice what they have learnt.
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Stoop, Helena, and Andrew Hutchison. "Post-Commencement Finance - Domiciled Resident or Uneasy Foreign Transplant?" Potchefstroom Electronic Law Journal/Potchefstroomse Elektroniese Regsblad 20 (May 4, 2017): 1. http://dx.doi.org/10.17159/1727-3781/2017/v20i0a1370.
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The 2008 Companies Act introduced a new business rescue regime into South African Company law, bringing it into line with trends in developed countries, particularly the United States. Indeed, it appears that the United States Chapter 11 model was followed in this process, introducing the business rescue concept as a legal transplant. Corporate law is well suited to legislative borrowing, but there are important caveats to bear in mind when doing so. In particular: the context and legal culture of the origin country may differ from those of the destination country. South Africa’s commercial environment is different from that of the United States, problematizing a transplant of Chapter 11’s concepts. Post-commencement finance will be used as a micro-study of this broader phenomenon, and this topic will be investigated with comparative reference to the United States position. It will be argued that an essential difference between the two procedures is the lack of legislatively mandated court oversight in South Africa. This impacts on the interests of creditors, as well as the availability of fresh finance. The result is problems in the implementation of the post-commencement finance provisions, which threaten the viability of this particular legal transplant.
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Rautenbach, Christa. "Editorial." Potchefstroom Electronic Law Journal/Potchefstroomse Elektroniese Regsblad 17, no. 6 (November 14, 2014): 0. http://dx.doi.org/10.17159/1727-3781/2014/v17i6a618.
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EditorialThis voluminous issue consists of 13 articles and 8 notes dealing with various legal topics in South Africa and abroad. The articles commences with Ig Rautenbach’s discussion of the ever-elusive concept of proportionality in the light of the text of the South African Constitution. Mmaphuti Tuba analyses the different approaches adopted for the regulation of payment systems in a variety of legislative instruments by the European Union. Phoebe Boltondeals with the thorny issue of public tenders and the extent to which bidders must comply with tender specifications and conditions. Leentjie de Jong examines present-day family arbitration and the problems experienced with it. Daleen Millard and Birgit Kuschke evaluate the insurer’s pre-contractual duties in the light of the transparency principle in insurance law. Karin Calitz deals with the question if a church can be held liable for the sexual assault of children by a priest, when the victims claim as adults, many years after the events took place. The entitlement of a non-member spouse to the member’s pension forms the focus point of Clement Marumoagae’scontribution. Mitzi Wiese reflects on the correctness of the classification of liens into enrichment and contractual liens. Frans Viljoen and Nicholas Orago analyses the importance and implications of the individual communications procedure under the Optional Protocol to the International Covenant on Economic, Social and Cultural Rights (OP-ICESCR) and details some of the reasons why it would be beneficial for South Africa to accede thereto. The interplay between international law and labour law in South Africa in the context of diplomatic immunity is investigated byEzette Gericke. Cornelius Kilian and Elizabeth Snyman-Van Deventer consider section 75 in the Companies Act of 1973 (or its equivalent, section 36(2) in the Companies Act of 2008) and the topic of statutory approval for an artificial decrease or increase in the number of issued shares. Annelie Laas and Trynie Boezaart give a critical analysis of the legal measures available to curb bullying in schools. Further afield, Mtendeweka Mhango discusses the development and current status of the political question doctrine in Ghana.The first note by Roger Evans and Lienne Steyn deliberate on the seemingly contradictory outcomes of three high court judgments regarding the question of ownership of property which vests in the master of the high court by virtue of the Insolvency Act 24 of 1936. Philip Stevens also discusses recent judgments pronouncing on the entering of the particulars of child sex offenders into the register for sex offenders as enunciated in Chapter 6 of the Criminal Law (Sexual Offences and Related Matters) Amendment Act 32 of 2007. Sieg Eiselen illustrates how the Department of Trade and Industry’s proposed amendment to the definition of “electronic signature” would undermine the key principles of functional equivalence, media neutrality and party autonomy. Luanda Hawthorne deliberates on the element of exploitation in bargaining relationships between contractual parties, as highlighted in Uniting Reformed Church, De Doorns v President of the Republic of South Africa 2013 5 SA 205 (WCC). Anneliese Roos and Magda Slabbert discuss the case of Isparta v Richter 2013 6 SA 4529 (GP), which dealt with defamation in the social media on the Facebook platform. Rowena Bernard considers the case of Department of Correctional Services v Police and Prison Civil Rights Union (POPCRU) 2011 32 ILJ 2629 (LAC), where the employer's application of rules relating to the dress code of employees impacted on the religious beliefs and practices of five of the staff members. Nico Buitendag and Karin van Marle reflect on Afriforum v Malema 2011 6 SA 240 (EqC), which drew considerable attention in the media and in the public discourse. In the last contribution, James Linscott analyses F v Minister of Safety and Security 2012 1 SA 536 (CC), which dealt with the “standard” test for vicarious liability.EditorChrista Rautenbach
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Vela Madlela. "LEGISLATIVE CONTROLS ON DIRECTOR AND EXECUTIVE TERMINATION PAYMENTS IN THE UK AND AUSTRALIA – LESSONS FOR SOUTH AFRICA." Obiter 37, no. 3 (December 20, 2016). http://dx.doi.org/10.17159/obiter.v37i3.11524.
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The awarding of termination payments to departing company directors and senior executives has attracted a lot of controversy in many jurisdictions in light of the excessive nature and size of termination packages, as well as the corporate governance flaws in the process by which these payments are determined. Termination payments are frequently perceived to be rewards for failure in view of the large packages that have been paid to company executives on termination of their service contracts, often following poor financial performance and staff retrenchments. This article examines the legislative controls on termination payments in the UK under the Companies Act 2006, and in Australia under the Corporations Act 2001. It then evaluates the position in South Africa under the Companies Act 71 of 2008 in light of the approaches followed by the UK and Australia. The article concludes that the provisions of the Companies Act 71 of 2008, relating to directors’ and executives’ termination payments are inadequate to promote transparency, accountability and certainty. It further makes proposals for more robust regulation of directors’-and executive-termination payments under the Companies Act 71 of 2008.
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Jan Louis Van Tonder. "A PRIMER ON THE DIRECTORS’ OVERSIGHT FUNCTION AS A STANDARD OF DIRECTORS’ CONDUCT UNDER THE COMPANIES ACT 71 OF 2008." Obiter 39, no. 2 (August 15, 2018). http://dx.doi.org/10.17159/obiter.v39i2.11351.
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The recent well publicised corporate scandals and widespread allegations of corporate fraud and corruption in both the private and public sector, which occurred seemingly unnoticed and caused public outrage, prompted this article. Although it is clear that directors should not be passive in their monitoring and oversight function and the notion of a passive director must be discouraged, as such, the oversight function has received little or no attention in South Africa, and is, as a result, not well developed in South Africa. The aim of this article is to provide a preliminary analysis of the content and meaning of the directors’ oversight function as a standard of directors’ conduct and to reconcile the oversight function with the business judgment rule. Section 5(2) of the Companies Act provides that, to the extent appropriate, a court interpreting or applying the provisions of the Companies Act may consider foreign company law. This is complementary to section 5(1), which directs that the Companies Act must be interpreted and applied in a manner that gives effect to the purpose of section 7. In light hereof, the article will refer to the Model Business Corporation Act to assist the research in examining the content and meaning of the oversight function as a standard of directors’ conduct and to reconcile the oversight function with the business judgment rule.
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Rehana Cassim. "A Critical Analysis on the Use of the Oppression Remedy by Directors Removed from Office by the Board of Directors under The Companies Act 71 of 2008." Obiter 40, no. 3 (December 15, 2019). http://dx.doi.org/10.17159/obiter.v40i3.11196.
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Both sections 71(3) and 163 of the Companies Act 71 of 2008 are innovative in South African company law in that the former section permits the board of directors to remove a fellow director from office, while the latter section extends the oppression remedy to directors. Previously, under the Companies Act 61 of 1973, the power to remove directors from office was confined to shareholders. Moreover, only shareholders could apply for relief from oppressive or prejudicial conduct. Now that section 163 of the Companies Act 71 of 2008 has been extended to directors, this article argues that a director who has been removed from office by the board of directors under section 71(3) of the Companies Act may rely on the oppression remedy for relief if his or her removal from office was oppressive or unfairly prejudicial or if it unfairly disregarded his or her interests. The article further examines the nature of any orders a court may grant in this context. It argues further that, in the interests of fairness, clarity and certainty, section 163 of the Companies Act 71 of 2008 ought to be amended to make it clear that the section may be relied upon by a former director.
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Vela Madlela. "An Analysis of Mandatory Auditor Rotation Requirements in South Africa in light of International Legislative Trends." Obiter 40, no. 2 (October 2, 2019). http://dx.doi.org/10.17159/obiter.v40i2.11229.
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An independent and objective external audit of companies is an integral element of sound corporate governance and of functional financial markets. The issues relating to auditor independence and objectivity have attracted considerable regulatory and public scrutiny in many leading jurisdictions. This is partly due to a general decrease in audit quality over the years as evidenced by high-profile accounting scandals and audit failures, both locally and internationally, as well as the vital role that an external audit is expected to play in ensuring transparency, accuracy and efficiency in the financial markets. In an attempt to restore confidence in the audit profession and to strengthen the independence of the external audit function for companies, legislatures in some leading jurisdictions have introduced a variety of regulatory strategies, including mandatory rotation of auditors in the form of mandatory audit partner rotation (MAPR) and/or mandatory audit firm rotation (MAFR). In this article, the author examines the adequacy of the current provisions of section 92 of the Companies Act 71 of 2008 regarding MAPR and the recently promulgated rule of the Independent Regulatory Board for Auditors (IRBA) on MAFR (the MAFR rule) in addressing the issue of mandatory auditor rotation in South Africa. The author considers whether the provisions of the Companies Act 71 of 2008 regarding MAPR and the MAFR rule are adequate to promote an independent and objective external audit function for companies, as well as transparency, efficiency and accountability, while providing certainty for companies and auditors. The author first examines some of the key principles and policy considerations relating to the external audit of companies – namely, the significance of audits and auditors in the financial markets as well as the value of auditor independence and objectivity. This is followed by an examination of the provisions of section 92 of the Companies Act 71 of 2008 regarding MAPR and the recently promulgated MAFR rule in light of legislative developments in the United States, Canada, the European Union, Australia and India regarding mandatory rotation of auditors and audit partners. Based on the lessons to be drawn from the experiences of the above jurisdictions, the author then makes recommendations for appropriate reforms for South Africa in this important area of company law. This is followed by some concluding remarks.
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Howard Chitimira. "SOME THOUGHTS ON THE MEANING AND APPLICATION OF COMMERCIAL INSOLVENCY IN WINDING-UP PROCEEDINGS INVOLVING CONTINGENT CREDITORS Absa Bank v Hammerle Group 2015 (5) SA 215 (SCA)." Obiter 38, no. 2 (August 15, 2017). http://dx.doi.org/10.17159/obiter.v38i2.11449.
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The winding up of companies is dually governed by the Companies Act (71 of 2008, hereinafter “the Companies Act 2008”) and the relevant provisions of the repealed Companies Act (61 of 1973, hereinafter “the Companies Act 1973”). Thus, the winding up of solvent companies is dealt with under the Companies Act 2008 while insolvent companies are still wound up under the Companies Act 1973. Accordingly, the Companies Act 2008 does not have specific provisions that deal with the winding up of insolvent companies. Nonetheless, the Companies Act 2008 has made transitional measures that enable chapter 14 of the Companies Act 1973 to continue to govern the winding up of insolvent companies. Despite these transitional measures, most provisions of chapter 14 of the Companies Act 1973 are only applicable to the winding up of solvent companies where it is necessary to give full meaning and/or effect to the provisions that govern the winding up of solvent companies under the Companies Act 2008. This dual approach has at times given rise to the inconsistent application of the relevant provisions that deal with the winding up of both solvent and insolvent companies by the courts. Such inconsistencies are exacerbated by the different approaches that are confusingly employed by the courts, especially, in winding-up proceedings involving contingent creditors of persons that are commercially and/or factually insolvent. To this end, the recent decision in Absa Bank v Hammerle Group (2015 (5) SA 215 (SCA), hereinafter the “Hammerle Group case”) has usefully exposed some of the challenges encountered by the courts when enforcing winding-up proceedings involving contingent creditors and commercially insolvent persons in South Africa. This judgment is crucial because it has satisfactorily addressed the following concerns: (a) whether contingent creditors have locus standi to apply for the winding up of their insolvent debtors; (b) whether mere subordination of a contingent creditor’s owed debt to the debts of other creditors of the same debtor could render it undue and not payable in winding-up proceedings; (c) whether contingent creditors are entitled to institute winding-up proceedings on the basis of the debtor’s commercial insolvency; (d) whether statements made without prejudice during bona fide negotiations for the settlement of disputes are inadmissible in winding-up proceedings; (e) whether the debtor’s unequivocal acknowledgement of its indebtedness to the creditor could interrupt the running of prescription in respect of the debt owed to that creditor; and (f) whether a debtor’s debt restructure could constitute an act of insolvency. Accordingly, the article discusses these concerns in light of the Hammerle Group case judgment. This is done to explore whether contingent creditors’ rights with regard to commercial insolvency winding-up proceedings are consistently recognised by the relevant courts in South Africa. The article also examines whether such rights are adequately protected under chapter 14 of the Companies Act 1973.
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Cassim, Rehana. "A Comparative Discussion of the Judicial Disqualification of Directors under the South African Companies Act." Journal of African Law, November 9, 2020, 1–24. http://dx.doi.org/10.1017/s0021855320000248.
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Abstract Section 162 of the South African Companies Act 71 of 2008 empowers courts to declare directors delinquent and hence to disqualify them from office. This article compares the judicial disqualification of directors under this section with the equivalent provisions in the United Kingdom, Australia and the United States of America, which have all influenced the South African act. The article compares the classes of persons who have locus standi to apply to court to disqualify a director from holding office, as well as the grounds for the judicial disqualification of a director, the duration of the disqualification, the application of a prescription period and the discretion conferred on courts to disqualify directors from office. It contends that, in empowering courts to disqualify directors from holding office, section 162 of the South African Companies Act goes too far in certain respects.
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Vela Madlela. "THE UNQUALIFIED RIGHT OF ACCESS TO COMPANY RECORDS BY NON-HOLDERS OF THE COMPANY’S SECURITIES UNDER SOUTH AFRICAN COMPANY LAW Nova Property Group Holdings Ltd v Cobbett (MandG Centre for Investigative Journalism NPC as amicus curiae) 2016 (4) SA 317 (SCA)." Obiter 40, no. 1 (June 30, 2019). http://dx.doi.org/10.17159/obiter.v40i1.11315.
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This note, therefore, discusses the Nova case with a focus on the approach of the court regarding the proper interpretation and the ambit of the right of access to a company’s records by any person as conferred by section 26(2) of the Companies Act 71 of 2008. It provides some critical comments on the main issues that this judgment raises, including the impact of the Constitution in this area of South African company law, the interpretation of section 26(2) in light of the role and impact of companies in society, the interpretation of section 26(2) in light of the purposes of the Companies Act 71 of 2008, the interface between section 26(2) and PAIA as well as the potential for abuse of the right of access to company records enshrined in section 26(2). This is followed by some concluding remarks.
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Coetzee, L., and JL van Tonder. "Advantages and disadvantages of partial codification of directors’ duties in the South African Companies Act 71 of 2008." Journal for Juridical Science 41, no. 2 (November 28, 2016). http://dx.doi.org/10.18820/24150517/jjs41.v2.1.
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Rajaram, Rajendra, and Anesh M. Singh. "Competencies for the effective management of legislated business rehabilitations." South African Journal of Economic and Management Sciences 21, no. 1 (April 12, 2018). http://dx.doi.org/10.4102/sajems.v21i1.1978.
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Background: In 2011 a new Companies Act (No. 71 of 2008) was implemented in South Africa. A feature of this Act was the introduction of business rescue legislation. Although this legislation was implemented in May 2011, statistics indicate that the success rate for business rescues is approximately only 12%. This low success rate prompted debate relating to the effectiveness, and continued suitability of a legislated business rescue as a mechanism to rehabilitate financially distressed companies. A feature of the business rescue environment in South Africa is the lack of knowledge, necessitating more research in the field. Aim: Due to the importance of the business rescue practitioner in the overall success of a rescue, the research focused on establishing competencies required to be a successful practitioner. Setting: The research was undertaken in South Africa between 2015 and 2017. Methods: A mixed methods research approach was utilised to identify the important competencies of a successful practitioner. A survey was conducted with the membership of the Turnaround Management Association of Southern Africa. The survey was mailed to 130 members and the response rate was 54%. The survey was complemented by undertaking interviews with 7 of the top 10 business rescue practitioners, according to their number of practitioner appointments. Results: The original contribution to knowledge of this study is the identification of a set of competencies that can be utilised to accredit business rescue practitioners and the emphasis on an accounting qualification and effective cash management skills that a successful practitioner must possess. Conclusion: The knowledge generated from this research will benefit business rescue practitioners, the financial sector and stakeholders of companies intending to go into a legislated business rehabilitation.
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Conradie, Shaneen, and Christiaan Lamprecht. "What are the indicators of a successful business rescue in South Africa? Ask the business rescue practitioners." South African Journal of Economic and Management Sciences 21, no. 1 (April 11, 2018). http://dx.doi.org/10.4102/sajems.v21i1.1726.
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Background: Business rescue, in terms of Chapter 6 of the Companies Act No 71 of 2008, is still relatively new to the South African business environment. The need for a successful business rescue regime is beyond doubt. However, a consistent manner to measure the success of the regime has not been determined. Previous research into possible indicators of business rescue success was based on a review of international business rescue regimes that share the same underlying philosophy as the South African business rescue regime. Aim and Setting: This study extends previous research efforts by soliciting the opinions of 16 South African, senior business rescue practitioners on the indicators of business rescue success. Method: The researchers used a qualitative research approach. The Delphi research technique was used to gather qualitative and quantitative empirical data from business rescue practitioners. Results: The experts reached a high level of consensus on various indicators of a successful business rescue. Most notable are that business rescue should save as many jobs as possible and that the actual outcome should be compared to that estimated in the business rescue plan. A novel indicator of success is the business rescue points saved or rescued, when using the public interest score. Conclusion: The study makes a valuable contribution to the debate on what constitutes a successful business rescue by adding the considered opinion on indicators of success by one group of experts in the field of business rescue, namely senior business rescue practitioners.
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Dippenaar, Mareli. "A critical analysis of the meaning of the term ‘value’ in Section 30(6)(e) of the Companies Act." South African Journal of Economic and Management Sciences 21, no. 1 (April 26, 2018). http://dx.doi.org/10.4102/sajems.v21i1.1985.
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Background: Sections 30(4) and 30(5) of the Companies Act 71 of 2008 (the Act) require, inter alia, disclosure of the remuneration received by each director in a company’s annual financial statements. Section 30(6) defines the term ‘remuneration’, which includes, inter alia, in Section 30(6)(e) the ‘value’ of any option or right granted to a director, as contemplated in Section 42, which deals with options for the allotment or subscription of securities or shares of a company. It is uncertain what the intended meaning of the term ‘value’ is in this context and it is interpreted differently by different companies in practice. Aim: The objective of this study was to understand the meaning of the term ‘value’ in Section 30(6)(e) of the Act (including the date of measurement thereof), as intended by the legislature. Setting: This article examined existing literature in a South African corporate and legislative environment. Method: A non-empirical study of existing literature was conducted by performing a historical analysis within a South African context. A doctrinal research approach was followed. Results: Possible interpretations of the term ‘value’ include the grant date fair value of the rights, the fair value at reporting date, the fair value on vesting date, the expense calculated in terms of the International Financial Reporting Standard on share-based payments, the gain on exercise of the rights and the intrinsic value on reporting date. It is submitted that the most likely meaning is the grant date fair value. Conclusion: It was found that the meaning of the term ‘value’, for purposes of Section 30(6)(e) of the Act, is unclear and interpreted differently by different companies. It is, therefore, recommended that the wording of Section 30(6)(e) is amended to reflect the meaning intended by the legislature.