SAAC: Recent Episodes
SAAC - The Southern African Advisory Company
As the market conduct regulator for financial services providers (FSPs) and over-the-counter (OTC) derivative providers (ODPs), the Financial Sector Conduct Authority (FSCA) has had their hands full in the last few months, issuing a spate of warnings to the public during the first quarter of 2022.
The Supreme Court of Appeal (SCA) in the matter of Nova Property Group Holdings v Cobbett (20815/2014) [2016] ZASCA 63 provided welcome clarity on the interpretation and qualifications of the public’s rights to have unrestricted access to companies’ records as conferred upon by s26(2) of the Companies Act, No 71 of 2008 (Act).
The Minister of Employment and Labour in South Africa (“Minister“) has recently published three important legal developments affecting South African employers and employees – the Draft National Labour Migration Policy and Employment Services Amendment Bill, the Code of Practice for Managing Exposure to Sars-CoV-2 in the Workplace 2022, and the Code of Good Practice on the Prevention and Elimination of Harassment in the Workplace.
In the matter of WK Construction (Pty) Limited v Moores Rowland and Others, WK claimed damages against its auditors. WK Construction’s cause of action was based on a breach of contract.
The Counterfeit Goods Act 37/1997 (CGA) aims to combat the trade in counterfeit goods. It was implemented in conjunction with amendments to the Merchandise Marks Act 17/1941 (MMA), which had hitherto been the principal weapon used to deal with counterfeit goods. All provisions of the MMA concerning counterfeit goods have now been stripped, and their counterparts are found in the CGA.
Before the CGA, the only pieces of domestic legislation that provided any measure of relief against trade in counterfeit goods were the MMA, the Copyright Act 1978 and the Trademarks Act 1993. The provisions of those acts have largely been found wanting as they create offences only in respect of some forms of trading in counterfeit goods. They also lack appropriate and effective mechanisms, procedures and penalties that are appropriate for combating trade in counterfeit goods.
In the recent High Court judgment of Knuttel NO and Others v Shana and Others (GJ) (unreported case no 38683/2020, 27-8-2021) (Katzew AJ), the court had to decide whether the rules related to the commissioning of affidavits could be relaxed in certain circumstances.
When external shocks rock the business, a business rescue practitioner brings a specialised skill set to restructure the balance sheet.
SOLIDARITY OBO MEMBERS V ERNEST LOWE, A DIVISION OF HUDAGO TRADING (PTY) LTD (LC) Employer’s intention to implement a policy that would require employees to produce proof of vaccination or Covid-19 test results on a weekly basis at the employees’ cost does not constitute a mandatory vaccination policy and is not unlawful.
ARQOMANZI PROPRIETARY LIMITED V VANTAGE GOLDFIELDS AND OTHERS 549/2021 MBOMBELA CASE 549/2021 The behavior and actions of the Lily and Barbrook Mines’ business rescue practitioners (BRPs), towards the businesses under rescue and the affected parties, were unlawful and irresponsible.
Secured creditors are more likely to recover a claim from a business rescue or liquidation project than concurrent creditors.
Ragavan and Others v Optimum Coal Terminal and Others (52832/2021) [2022] ZAGPJHC 22 (18 January 2022) - Ordinarily, the business and affairs of a company must be managed by or under the direction of its board of directors, and the board has the authority to exercise all of the powers and perform any of the functions of the company. That is unless the company is in Business Rescue. This episode examines and dissect the limitation on directors’ powers when the company is in business rescue and under the control of the Business Rescue Practitioners).
An opinion piece comparing both processes objectively against each other vis-a-vis. - Adv Tina Rabilall
Barry v Clearwater Estates NPC & Others 2017 (3) SA 364 (SCA) - The SCA held that s58(1) cannot be altered and, accordingly, that the appointment of a proxy may take place at any time, as per the language of the section. In doing so, the SCA acknowledged that this interpretation may impose a significant practical administrative burden on organisations, in particular those with large numbers of shareholders or members, as with no cut-off for proxy appointments, appointments (and the resulting necessary validations prior to quorum and voting) may be made shortly before or at meetings.
Consider the binding offer provisions in the 2008 Companies Act that can result in dissenting creditors being forced to sell their voting interest to parties that support the rescue plan in order to allow for such plan to be adopted.
Consider the binding offer provisions in the 2008 Companies Act that can result in dissenting creditors being forced to sell their voting interest to parties that support the rescue plan in order to allow for such plan to be adopted.
Consider the binding offer provisions in the 2008 Companies Act that can result in dissenting creditors being forced to sell their voting interest to parties that support the rescue plan in order to allow for such plan to be adopted.
Consider the binding offer provisions in the 2008 Companies Act that can result in dissenting creditors being forced to sell their voting interest to parties that support the rescue plan in order to allow for such plan to be adopted.
Consider the binding offer provisions in the 2008 Companies Act that can result in dissenting creditors being forced to sell their voting interest to parties that support the rescue plan in order to allow for such plan to be adopted.
Consider the binding offer provisions in the 2008 Companies Act that can result in dissenting creditors being forced to sell their voting interest to parties that support the rescue plan in order to allow for such plan to be adopted.
Consider the binding offer provisions in the 2008 Companies Act that can result in dissenting creditors being forced to sell their voting interest to parties that support the rescue plan in order to allow for such plan to be adopted.
On 20 May 2015, the Supreme Court of Appeal (SCA) delivered judgment in the matter of African Banking Corporation of Botswana v Kariba Furniture Manufacturers & others(228/2014) [2015] ZASCA 69, dealing, amongst other things, decisively with the proper interpretation of the words 'binding offer' as they appear in s153(1)(b)(ii) of the Companies Act, 71 of 2008 (Act).
Oakdene Square Properties (Pty) Ltd v Farm Bothasfontein (Kyalami) (Pty) Ltd (609/2012) [2013] ZASCA 68(27 May 2013). The Oakdene case paints an unfortunate picture of how the business rescue scheme can be abused by opportunist debtors seeking to harness the advantages and protections of business rescue for ill-founded reasons. It is clear from the judgment that the business rescue procedure should only be commenced if it is a genuine attempt to achieve the goals of business rescue, and that pursuing business rescue to achieve a winding-up of a company to avoid the consequences of liquidation proceedings will certainly not be legitimately achieving the goals of business rescue.
South African Revenue Service v Beginsel NO & Others (Case No 15080, 31 October 2012). The Act does not create statutory preferences as set out in the Insolvency Act, and if was the legislature’s intention to make SARS a preferred creditor in the realms of business rescue proceedings, the relevant section would have specifically provided. This position is evidenced by the fact that the Act only differentiates between secured and unsecured creditors in terms of section 145(4)(a), with concurrent creditors forming part of the latter group.