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Director Liability Part 2

Director Liability Part 2

How the South African courts have interpreted the various provisions of the Companies Act t 71 of 2008 (the “Act”) which impute personal liability on persons for contravening the Act.

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director liability part 2

Part 1 of this article series discussed the various provisions of the Companies Act 71 of 2008 (the “Act”) which impute personal liability on persons for contravening the Act. This article will now observe how the South African courts have interpreted those provisions of the Act. On the 26th of June 2020, the High Court of the Gauteng Local Division delivered a judgment which dismissed the certification of a class action made by the shareholders of Steinhoff International Holdings, who sought to hold the company’s directors (and various other persons) personally liable for the diminution of the company’s share value in accordance with section 218(2) and 20(6) of the Act (hereinafter referred to as the “Steinhoff case”).

Similarly, on the 3rd of July 2020, the Supreme Court of Appeal delivered a judgment which dismissed an application made by the minority shareholders of African Bank Investments Limited, who sought to hold the company’s directors (and various other persons) personally liable for the diminution of the company’s share price in accordance with section 218(2) of the Act (hereinafter referred to as the “African Bank case”). 

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© 2021 KPMG Services Proprietary Limited, a South African company with registration number 1999/012876/07 and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.


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