Moodley v On Digital Media (Pty) Ltd and Others (20456/2014) [2014] ZAGPJHC 137; 2014 (6) SA 279 (GJ) (11 July 2014)

Moodley v On Digital Media (Pty) Ltd and Others (20456/2014) [2014] ZAGPJHC 137; 2014 (6) SA 279 (GJ) (11 July 2014)

The court found that the business rescue plan for On Digital Media (ODM) was implemented in accordance with its terms and the Companies Act. The plan expressly provided for the cancellation of existing shares and the issue of new shares in specified proportions, and allowed StarTimes to waive certain conditions regarding shareholders' agreements. The applicant's shareholding was proportionally reduced in line with other shareholders, and his economic interests were not adversely affected by his exclusion from negotiations. The adoption of the new memorandum of incorporation and the buy-back of shares were lawful and consistent with the business rescue plan. The court rejected the...

Citation
[2014] ZAGPJHC 137
Parties
Applicant: Atchuthanandan Nadaraja Moodley; Respondent: On Digital Media (Pty) Ltd; Respondent: Petrus Francois Van Den Steen N.O.; Respondent: Startimes Communications Technology Company Ltd; Respondent: First Aone Trade and Invest 12 (Pty) Ltd; Respondent: National Empowerment Fund; Respondent: Redgold Investments 16 (Pty) Ltd; Respondent: SES Global Africa SA; Respondent: Industrial Development Corporation of SA; Respondent: First National Media Investment Holdings (Pty) Ltd; Respondent: Companies and Intellectual Property Commission; Respondent: Hantex International Company Ltd; Respondent: 2012/200078/07 (South Africa) (Pty) Ltd; Respondent: Diduscan (Pty) Ltd; Respondent: Development Bank of SA Ltd
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
11 July 2014
Case Number
20456/2014
Procedural Posture
Urgent Application / Final Determination of Application After Answering and Replying Affidavits; Hearing on 25 26 June 2014
Outcome
Application dismissed with costs.
Judges
P.A. Meyer
Legal Topics
Business Rescue, Companies Act Implementation, Shareholder Rights, Memorandum of Incorporation, Declaratory and Interdictory Relief
Commercial and Corporate Civil Procedure Business Rescue Companies Act Implementation Shareholder Rights Memorandum of Incorporation Declaratory and Interdictory Relief

Case Brief

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Parties

Atchuthanandan Nadaraja Moodley

Applicant

On Digital Media (Pty) Ltd

Respondent

Petrus Francois Van Den Steen N.O.

Respondent

Startimes Communications Technology Company Ltd

Respondent

First Aone Trade and Invest 12 (Pty) Ltd

Respondent

National Empowerment Fund

Respondent

Redgold Investments 16 (Pty) Ltd

Respondent

SES Global Africa SA

Respondent

Industrial Development Corporation of SA

Respondent

First National Media Investment Holdings (Pty) Ltd

Respondent

Companies and Intellectual Property Commission

Respondent

Hantex International Company Ltd

Respondent

2012/200078/07 (South Africa) (Pty) Ltd

Respondent

Diduscan (Pty) Ltd

Respondent

Development Bank of SA Ltd

Respondent

Procedural Posture

Urgent Application / Final Determination of Application After Answering and Replying Affidavits; Hearing on 25 26 June 2014

Legal Issues

  1. 1 Whether the business rescue practitioner and company implemented the adopted business rescue plan in accordance with its terms and the Companies Act.
  2. 2 Whether the applicant's rights as a shareholder were infringed by the restructuring and issue of new shares without his participation in negotiations.
  3. 3 Whether the adoption of a new memorandum of incorporation and share buy-back was lawful under the business rescue plan and the Companies Act.

Ratio Decidendi

The court found that the business rescue plan for On Digital Media (ODM) was implemented in accordance with its terms and the Companies Act. The plan expressly provided for the cancellation of existing shares and the issue of new shares in specified proportions, and allowed StarTimes to waive certain conditions regarding shareholders' agreements. The applicant's shareholding was proportionally reduced in line with other shareholders, and his economic interests were not adversely affected by his exclusion from negotiations. The adoption of the new memorandum of incorporation and the buy-back of shares were lawful and consistent with the business rescue plan. The court rejected the...

Court Disposition

Application dismissed with costs.

Orders

  • The application is dismissed.
  • The applicant is ordered to pay the costs of the first and second respondents, the third and eleventh respondents, the fifth and eighth respondents, and the fourteenth respondent. Such costs, other than for the fourteenth respondent, include the costs consequent upon the employment of two counsel.