A critique of rescuing failing businesses: A legal perspective

by | Oct 8, 2019 | JCCL, JCCL V1 I1

A critique of rescuing failing businesses: A legal perspective

Authors Fidelis Manyuchi

ISSN: 2521-2575
Affiliations: LLM Candidate University of the Witwatersrand, Johannesburg
Source: Journal of Corporate and Commercial Law & Practice, The, Volume 1 Issue 1, 2015, p. 44 – 62

Abstract

The South African legal field has a novel concept of business rescue. This concept is mainly premised on the management, by a business rescue practitioner, of transaction costs that cause business entities to get into financial distress. Through the use of three case studies, this article introduces and demonstrates the importance of information asymmetry costs in the business rescue arena. Information asymmetry costs mainly cause losses to a business entity and also determine the success of proceedings towards business rescue, the assumption and execution of the business rescue plan by the business rescue practitioner. The study therefore, calls for a holistic approach to business rescue that combines analysis of transaction costs and information asymmetry costs throughout the business rescue processes.

Critical analysis of the extended legal standing provisions under section 157(1) of the Companies Act 71 of 2008 to apply for legal remedies

by | Oct 8, 2019 | JCCL, JCCL V1 I1

Critical analysis of the extended legal standing provisions under section 157(1) of the Companies Act 71 of 2008 to apply for legal remedies

Authors Justice Chris Jafta

ISSN: 2521-2575
Affiliations: Justice of the Constitutional Court of South Africa
Source: Journal of Corporate and Commercial Law & Practice, The, Volume 1 Issue 1, 2015, p. 35 – 43

Abstract

Legal standing (or locus standi) is a requirement for instituting legal proceedings, irrespective of whether the claim is rooted in the Constitution, statute law or the common law. For claims based on the common law or statutes, the standard for establishing legal standing is generally the same. In passing the Companies Act 71 of 2008, Parliament must have been aware of the narrow approach to standing at common law and the fact that in the case of a statutory claim, legal standing is determined with reference to the relevant statute. It cannot be gainsaid that the aim of the legislature, encapsulated in s 157, was to alter the common-law position on legal standing and expand the class of persons who may institute legal proceedings. The section has revolutionised legal standing in matters where the Act applies. This article considers the scope of that legal standing, the determination of which involves the interpretation of s 157.

Possible contribution of corporate law remedies to curbing illicit outflow of capital from Africa

by | Oct 8, 2019 | JCCL, JCCL V1 I1

Possible contribution of corporate law remedies to curbing illicit outflow of capital from Africa

Authors Tshepo H Mongalo

ISSN: 2521-2575
Affiliations: Associate Professor of Law at the University of the Witwatersrand, Johannesburg
Source: Journal of Corporate and Commercial Law & Practice, The, Volume 1 Issue 1, 2015, p. 1 – 34

Abstract

The long-standing problem of capital flight from Africa as a result of the deliberately mischievous activities of multinational corporations is not lessened by the obvious inability of the conventional Anglo-American corporate law remedies to extend legal standing to constituencies other than equity investors. However, the lessons from the recent corporate law developments in South Africa show that the appropriate extension of legal standing in corporate law remedies to accommodate other corporate constituencies and the public interest can go a long way to contributing to the reduction of the scourge of this disempowering conduct of multinational corporations. The extension of legal standing to accommodate non-shareholder corporate constituencies and the public interest should, however, be embarked upon within reasonable limitations if the new corporate legal enforcement framework is to be of any utility. The South African experience offers lessons as to how these reasonable limitations can be made a permanent feature of the new enforcement framework. The paper argues that the insistence on the conservative, and, largely, individualistic Anglo-American corporate legal enforcement framework at all costs will make it difficult, if not impossible, for modern corporate law to contribute to the limited arsenal that can be employed to stem the tide of illicit capital flight from Africa.

An Appraisal of the Regulatory Framework for the Protection of Consumers in the Communications (GSM)

by | Oct 8, 2019 | JCCL, JCCL V2 I2

An Appraisal of the Regulatory Framework for the Protection of Consumers in the Communications (GSM)

Authors Cecil Nwachukwu Okubor

ISSN: 2521-2575
Affiliations: Lecturer, Faculty of Law, Delta State University, Oleh Campus, Nigeria
Source: Journal of Corporate and Commercial Law & Practice, The, Volume 2 Issue 2, 2016, p. 88 – 105

Abstract

The communications sector in Nigeria has witnessed enormous growth since 1992 when it was liberalised and deregulated. However, much more significant developments have been witnessed since 2001 when the Global System for Mobile Networks (GSM) licensed to private operators in the sector. This article examines the existing legal and institutional framework for the operations of GSM providers in Nigeria. The aim is to determine how the regulatory framework in the sector has improved the quality of service provided to subscribers by the GSM operators. The article reveals that in spite of the elaborate legal and institutional framework for the regulation of GSM operators in Nigeria, the services are far from being satisfactory and consumers in the sector do not feel adequately protected. Accordingly, the article recommends the enactment of a ‘generic competition law’ in Nigeria, which would, along with other measures, help to address the inadequacies of Nigeria’s legal framework in the communications sector.

A critical analysis of the continued preference displayed towards schemes of arrangement in South Africa

by | Oct 8, 2019 | JCCL, JCCL V2 I2

A critical analysis of the continued preference displayed towards schemes of arrangement in South Africa

Authors Jess Caitlyn Cameron

ISSN: 2521-2575
Affiliations: Associate, Cliffe Dekker Hofmeyr Attorneys Inc.
Source: Journal of Corporate and Commercial Law & Practice, The, Volume 2 Issue 2, 2016, p. 77 – 87

Abstract

Ever since the introduction of the merger and amalgamation provision on 1 May 2011 by the South African Companies Act, 2008, public companies continue to sidestep this new mechanism as a means for effecting a takeover and, instead, continue to prefer the scheme of arrangement. There are a number of reasons why the continued use of the scheme of arrangement may be justified and this article investigates the plausibility of those reasons.

A critical examination of ‘nominee directors’ in South Africa

by | Oct 8, 2019 | JCCL, JCCL V2 I2

A critical examination of ‘nominee directors’ in South Africa

Authors Lovanya Moodley

ISSN: 2521-2575
Affiliations: Attorney of the High Court of South Africa
Source: Journal of Corporate and Commercial Law & Practice, The, Volume 2 Issue 2, 2016, p. 42 – 76

Abstract

This article considers nominee directors: their fiduciary duties, liability for breach thereof and whether they should be entitled to directors’ fees for their services rendered as a director. The position of nominee directors in relation to their fiduciary duties is a precarious one. They are appointed with the purpose of performing an oversight function on behalf of their appointer, but could face personal liability for breach of fiduciary duties if they act in the furtherance of their appointer’s interests to the detriment of the nominee company. In the event of a nominee director wanting to receive remuneration by way of directors’ fees for services rendered as a director, there needs to be an express agreement of that entitlement in place or a shareholders’ resolution. Finally, and as a consequence of nominee directors lack of complete unfettered independence, this article finds that the Companies Act 71 of 2008 does not sufficiently accommodate the split loyalties of nominee directors and suggests that companies should avoid utilising them altogether in favour of the alternatives provided in King III, such as Lead Independent Directors or independent non-executive directors, in view of exercising good corporate governance.