Standard Bank Group Limited, Ex parte Liberty Group Limited (04/17352, 04/19223), Ex parte [2006] ZAGPHC 58; [2007] 4 All SA 1298 (W) (5 June 2006)

Standard Bank Group Limited, Ex parte Liberty Group Limited (04/17352, 04/19223), Ex parte [2006] ZAGPHC 58; [2007] 4 All SA 1298 (W) (5 June 2006)

The court found that the applicants had satisfied all statutory requirements for convening meetings under section 311 of the Companies Act. The schemes of arrangement were necessary to implement Black Economic Empowerment objectives and could not be practically achieved by direct negotiation with all shareholders. The amendments to section 38 now permit financial assistance for share acquisitions by subsidiaries, provided the requirements of sections 85 and 89 are met. The court was satisfied that all procedural safeguards, including explanatory statements, valuation information, independent chairmanship, and disclosure of directors' interests, were in place. There was no evidence that...

Citation
[2006] ZAGPHC 58
Parties
Applicant: Standard Bank Group Limited; Applicant: Liberty Group Limited
Court
High Courts - Gauteng
Jurisdiction
South Africa
Judgment Date
5 June 2006
Case Number
04/17352, 04/19223
Procedural Posture
Ex Parte Application / Application for Convening of Meetings Under Section 311 of the Companies Act
Outcome
Orders granted for the convening of meetings under section 311 of the Companies Act for both applicants.
Judges
Hussain
Legal Topics
Scheme of Arrangement, Black Economic Empowerment, Financial Sector Charter, Company Share Acquisition, Section 311 Companies Act, Section 38 Financial Assistance
Commercial and Corporate Banking and Finance Scheme of Arrangement Black Economic Empowerment Financial Sector Charter Company Share Acquisition Section 311 Companies Act Section 38 Financial Assistance

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Parties

Standard Bank Group Limited

Applicant

Liberty Group Limited

Applicant

Procedural Posture

Ex Parte Application / Application for Convening of Meetings Under Section 311 of the Companies Act

Legal Issues

  1. 1 Whether the requirements for convening meetings under section 311 of the Companies Act have been met.
  2. 2 Whether the proposed schemes of arrangement are permissible under the Companies Act, particularly sections 311, 38, 85, and 89.
  3. 3 Whether the applicants may provide financial assistance to subsidiaries for the acquisition of shares in the holding company in terms of the amended Act.

Ratio Decidendi

The court found that the applicants had satisfied all statutory requirements for convening meetings under section 311 of the Companies Act. The schemes of arrangement were necessary to implement Black Economic Empowerment objectives and could not be practically achieved by direct negotiation with all shareholders. The amendments to section 38 now permit financial assistance for share acquisitions by subsidiaries, provided the requirements of sections 85 and 89 are met. The court was satisfied that all procedural safeguards, including explanatory statements, valuation information, independent chairmanship, and disclosure of directors' interests, were in place. There was no evidence that...

Court Disposition

Orders granted for the convening of meetings under section 311 of the Companies Act for both applicants.

Orders

  • A meeting of members is to be convened in accordance with section 311 of the Companies Act for consideration of the proposed scheme of arrangement.
  • Mr I V Maleka SC is appointed as independent chairperson of the scheme meetings.