Mrl2601 Assignment 2: 788846

Shradha Seth Sivsanker Mrl2601 Assignment 2: Question 1: The Shareholders of Mongalo Estates (Pty) Ltd have an appraisal right as they dissent the proposed sale of 80% of the company assets. This appraisal right that they possess allows them to protect their own rights with regards to their shares within the company. An Appraisal right is the right in which a shareholder requires his or her company to purchase his or her shares at their fair value if the company resorts to any triggering actions which are listed. Section 164 of the Companies Act provides an appraisal remedy for dissenting shareholders, which is relevant to this scenario and therefore applicable as the company in question is considering a sale of the majority of the company’s assets. A strict procedure must be followed by the aggrieved shareholders. This remedy will become available when the resolution which adds to the shareholders detriment is taken but cannot be utilized before the adverse decision is made.1 The procedure that needs to be followed: