Clutchco (Pty) Ltd v Davis 2005 (3) SA 486 (SCA) ...........................................................................3
Rights and duties connected to shares ......................................................................................4
Rights of shareholders under PAIA .............................................................................................6
Smuts v Booyens; Markplaas (Edms) Bpk v Booyens 2001 4 SA 15 (SCA) ........................................8
Transfer of shares .....................................................................................................................9
Distinction Between Primary and Secondary Market ................................................................ 11
Changing Nominees and Transfer Implications ........................................................................ 12
Nova Property Group Holdings v Cobbett (20815/2014) [2016] ZASCA 63 (12 May 2016) ............... 13
Rights and duties connected to shares .................................................................................... 15
Securities register................................................................................................................... 15
Access to Outsiders ............................................................................................................... 16
Relationship Between Sections 26(2) and 26(6) ....................................................................... 17
Du Plooy NO v De Hollandsche Molen Share Block Ltd 2016 1 All SA 748 (WCC) ........................... 18
Court's Perspective on Impact ................................................................................................ 20
Meaning of Section 161 of the Companies Act ......................................................................... 21
Application of Sections 161 and 163 by the Court .................................................................... 22
Nominees and beneficial interest holders ............................................................................... 24
Securities register................................................................................................................... 25
Reezen Limited v Excellerate Holdings Limited [2018] JOL 40120 (GJ) ........................................... 27
Issue of shares and capitalisation shares ................................................................................ 28
Consequences of Non-Compliance with Section 41(3) of the Companies Act ........................... 30
Old Mutual Ltd v Peter Moyo A5041/19 (GJ) ................................................................................. 32
Court Holdings on Redemption and Conversion ...................................................................... 32
Classes of shares and terms on which shares are issued ......................................................... 33
Gaffoor v Vangates Investments (Pty) Ltd [2012] ZASCA 52........................................................... 35
Claim for Rectification - Prescription ....................................................................................... 36
Court's Discretion to Rectify the Register ................................................................................. 36
Securities register................................................................................................................... 37
De Wet v Naspers Ltd case number 2213/18 (WCC) .................................................................... 39
Classifications of Shares ........................................................................................................ 41
Understanding Rei Vindicatio in Relation to Shares .................................................................. 42
Section 37(9) and Its Interpretation ......................................................................................... 43
,Rights Under Section 161 ........................................................................................................ 43
Cession Issues ....................................................................................................................... 44
Legal nature of shares and shareholding ................................................................................. 44
Securities register................................................................................................................... 45
,Clutchco (Pty) Ltd v Davis 2005 (3) SA 486 (SCA)
Background
The case revolves around corporate finance issues concerning shareholder rights and
access to company records. The primary conflict involves an individual shareholder
seeking information from a family-run private company to validate concerns regarding
financial mismanagement before selling his shares.
Parties Involved
• Plaintiff: The shareholder (referred to as the applicant).
• Defendant: The family-run private company (referred to as the respondent).
Key Facts
Situation Overview
1. The respondent, a small private company, is operated as a family business.
2. The applicant owns 30% of the company's shares and has been a director since
1999.
3. Conflict arose in early 2002 between the applicant and his brother, who manages
the business.
4. The applicant requested access to various financial records to evaluate his
shareholding's value.
5. The company initially refused the request, citing concerns over the applicant's
motives.
Relevant Details
1. The applicant's father is the sole director of the company.
2. The Davis Family Trust owns 70% of the company’s shares.
3. The applicant alleged inaccuracies in the company's financial statements.
4. The records requested included detailed financial books from March 1999 to
January 2003.
Legal Issues
Questions at Hand
1. Did the applicant demonstrate that access to the records was required to
exercise or protect his rights as a shareholder?
2. Were the reasons for the respondent's refusal valid under the applicable law?
, Arguments Presented
Plaintiff’s Arguments
1. The applicant argued that the financial records were necessary to:
• Validate suspicions of financial mismanagement.
• Determine the value of his shareholding for a potential sale.
• Protect his rights as a shareholder.
Defendant’s Arguments
1. The respondent contended that:
• The applicant failed to establish a substantial need for the requested
records.
• There were no serious allegations of impropriety justifying access to
sensitive financial information.
Decision and Rationale
Court’s Decision
The court ruled in favor of the applicant, stating that the appeal had to succeed. The
initial refusal by the respondent was deemed unjustifiable given the applicant's
established rights as a shareholder.
Legal Reasoning
1. The court emphasized that a shareholder must be allowed access to company
records to protect their rights, provided they make a substantial case for the
need.
2. The ruling highlighted that access to information is essential for shareholders to
exercise their rights effectively.
Significance of the Case
Rights and duties connected to shares
The court's decisions regarding the rights and duties connected to shares are primarily
grounded in the Companies Act and the Constitution of the Republic of South Africa.
The following legal principles and sections play a crucial role:
1. Companies Act 61 of 1973: Governs the rights of shareholders, including the
access to information necessary for safeguarding investments.
2. Section 32 of the Constitution: Grants a constitutional right of access to
information, which is essential in evaluating shareholder rights.
Rights and duties connected to shares ......................................................................................4
Rights of shareholders under PAIA .............................................................................................6
Smuts v Booyens; Markplaas (Edms) Bpk v Booyens 2001 4 SA 15 (SCA) ........................................8
Transfer of shares .....................................................................................................................9
Distinction Between Primary and Secondary Market ................................................................ 11
Changing Nominees and Transfer Implications ........................................................................ 12
Nova Property Group Holdings v Cobbett (20815/2014) [2016] ZASCA 63 (12 May 2016) ............... 13
Rights and duties connected to shares .................................................................................... 15
Securities register................................................................................................................... 15
Access to Outsiders ............................................................................................................... 16
Relationship Between Sections 26(2) and 26(6) ....................................................................... 17
Du Plooy NO v De Hollandsche Molen Share Block Ltd 2016 1 All SA 748 (WCC) ........................... 18
Court's Perspective on Impact ................................................................................................ 20
Meaning of Section 161 of the Companies Act ......................................................................... 21
Application of Sections 161 and 163 by the Court .................................................................... 22
Nominees and beneficial interest holders ............................................................................... 24
Securities register................................................................................................................... 25
Reezen Limited v Excellerate Holdings Limited [2018] JOL 40120 (GJ) ........................................... 27
Issue of shares and capitalisation shares ................................................................................ 28
Consequences of Non-Compliance with Section 41(3) of the Companies Act ........................... 30
Old Mutual Ltd v Peter Moyo A5041/19 (GJ) ................................................................................. 32
Court Holdings on Redemption and Conversion ...................................................................... 32
Classes of shares and terms on which shares are issued ......................................................... 33
Gaffoor v Vangates Investments (Pty) Ltd [2012] ZASCA 52........................................................... 35
Claim for Rectification - Prescription ....................................................................................... 36
Court's Discretion to Rectify the Register ................................................................................. 36
Securities register................................................................................................................... 37
De Wet v Naspers Ltd case number 2213/18 (WCC) .................................................................... 39
Classifications of Shares ........................................................................................................ 41
Understanding Rei Vindicatio in Relation to Shares .................................................................. 42
Section 37(9) and Its Interpretation ......................................................................................... 43
,Rights Under Section 161 ........................................................................................................ 43
Cession Issues ....................................................................................................................... 44
Legal nature of shares and shareholding ................................................................................. 44
Securities register................................................................................................................... 45
,Clutchco (Pty) Ltd v Davis 2005 (3) SA 486 (SCA)
Background
The case revolves around corporate finance issues concerning shareholder rights and
access to company records. The primary conflict involves an individual shareholder
seeking information from a family-run private company to validate concerns regarding
financial mismanagement before selling his shares.
Parties Involved
• Plaintiff: The shareholder (referred to as the applicant).
• Defendant: The family-run private company (referred to as the respondent).
Key Facts
Situation Overview
1. The respondent, a small private company, is operated as a family business.
2. The applicant owns 30% of the company's shares and has been a director since
1999.
3. Conflict arose in early 2002 between the applicant and his brother, who manages
the business.
4. The applicant requested access to various financial records to evaluate his
shareholding's value.
5. The company initially refused the request, citing concerns over the applicant's
motives.
Relevant Details
1. The applicant's father is the sole director of the company.
2. The Davis Family Trust owns 70% of the company’s shares.
3. The applicant alleged inaccuracies in the company's financial statements.
4. The records requested included detailed financial books from March 1999 to
January 2003.
Legal Issues
Questions at Hand
1. Did the applicant demonstrate that access to the records was required to
exercise or protect his rights as a shareholder?
2. Were the reasons for the respondent's refusal valid under the applicable law?
, Arguments Presented
Plaintiff’s Arguments
1. The applicant argued that the financial records were necessary to:
• Validate suspicions of financial mismanagement.
• Determine the value of his shareholding for a potential sale.
• Protect his rights as a shareholder.
Defendant’s Arguments
1. The respondent contended that:
• The applicant failed to establish a substantial need for the requested
records.
• There were no serious allegations of impropriety justifying access to
sensitive financial information.
Decision and Rationale
Court’s Decision
The court ruled in favor of the applicant, stating that the appeal had to succeed. The
initial refusal by the respondent was deemed unjustifiable given the applicant's
established rights as a shareholder.
Legal Reasoning
1. The court emphasized that a shareholder must be allowed access to company
records to protect their rights, provided they make a substantial case for the
need.
2. The ruling highlighted that access to information is essential for shareholders to
exercise their rights effectively.
Significance of the Case
Rights and duties connected to shares
The court's decisions regarding the rights and duties connected to shares are primarily
grounded in the Companies Act and the Constitution of the Republic of South Africa.
The following legal principles and sections play a crucial role:
1. Companies Act 61 of 1973: Governs the rights of shareholders, including the
access to information necessary for safeguarding investments.
2. Section 32 of the Constitution: Grants a constitutional right of access to
information, which is essential in evaluating shareholder rights.
