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Grindrod Bank Limited v Torode N.O and Others (55503/11) [2014] ZAGPPHC 281 (13 May 2014)
The court held the loan was an unlawful financial assistance transaction under section 38(1) and dismissed both the bank’s claim and the counterclaim.
Nedbank Limited v Spannenberg and Another (5434/2011) [2014] ZAWCHC 50 (3 April 2014)
The court found that Airoad Express, by inflating the First Defendant's salary and facilitating the medium term loan, provided financial assistance for the purchase of its shares, contravening section 38 of the Companies Act. The Plaintiff, Nedbank, was aware of the purpose and the company's involvement. The medium term loan and the related home loan and mortgage agreements were inextricably linked and could not be severed from the prohibited transaction. As such, these agreements are void and unenforceable. Only the amounts admitted by the Defendants as benefits received for purposes other t…
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Kernsig 17 (Edms) Bpk v ABSA Bank (A578/08) [2010] ZAWCHC 9 (8 February 2010)
The court found that the term loan agreement of 8 December 2005 was an integral and inseparable part of a scheme designed to enable the Barnards to fulfil their obligation under the share purchase agreement, thereby constituting prohibited financial assistance under section 38(1) of the Companies Act. The respondent was fully aware of the purpose for which the loan proceeds would be used, distinguishing this case from Saambou Nasionale Bouvereniging v Ligatex, where the lender was unaware of the intended illegality. As the underlying transaction was void, the covering bonds registered over th…
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Peters and Others NNO v Schoeman and Others (288/98) [2000] ZASCA 63; 2001 (1) SA 872 (SCA) ; [2001] 1 All SA 155 (A) (10 November 2000)
The Supreme Court of Appeal held that the deed of sale did not breach section 38 of the Companies Act and ordered the respondents to comply.
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