Regulating against False Corporate Accounting: Does the Companies Act 71 of 2008 Have Sufficient Teeth?

Regulating against False Corporate Accounting: Does the Companies Act 71 of 2008 Have Sufficient Teeth?

Author: Etienne A Olivier

ISSN: 1996-2185
Affiliations: Lecturer in Law, Rhodes University
Source: South African Mercantile Law Journal, Volume 33 Issue 1, 2021, p. 1 – 24
https://doi.org/10.47348/SAMLJ/v33/i1a1

Abstract

This article questions whether the enforcement mechanisms in the Companies Act 71 of 2008 (the Act) are adequate deterrents to financial reporting misconduct and whether they provide suitable sanctions to punish wrongdoers. The South African regulatory approach to company directors and financial reporting compliance places great emphasis on stakeholder protection and board accountability. By criminalising the publication of false financial statements, providing civil remedies to prejudiced stakeholders and robust protection for whistleblowers, empowering regulatory agencies to investigate allegations of accounting fraud and penalise transgressors, and by creating a broad net of liability for corporate decision-makers who allow or cause the publication of false financial reporting, the Act takes a firm stance that accounting fraud must be discouraged. The Act’s enforcement mechanisms in respect of financial reporting are commendable, but detection and enforcement will likely remain challenging unless a concerted effort is made to educate the public about financial reporting misconduct and its dangers, sufficient funding is provided to the regulatory agencies, consistent use is made of the available criminal, civil, and administrative remedies, and Parliament reconsiders the appropriateness of the maximum penalties for accounting fraud.

COVID-19 and Employment Law in South Africa: Comparative Perspectives on Selected Themes

COVID-19 and Employment Law in South Africa: Comparative Perspectives on Selected Themes

Authors: Lonias Ndlovu & Clarence Itumeleng Tshoose

ISSN: 1996-2185
Affiliations: Associate Professor & Dean: School of Law, University of Venda; Professor of Labour & Social Security Law, School of Law, University of Limpopo
Source: South African Mercantile Law Journal, Volume 33 Issue 1, 2021, p. 25 – 55
https://doi.org/10.47348/SAMLJ/v33/i1a2

Abstract

Public health emergencies such as the novel coronavirus (COVID-19), which was elevated to a global pandemic, usually have severe implications for people in various spheres of life. For example, people’s employment and social welfare are affected. In this paper, the authors explore the possible implications of COVID-19 on the rights of employers and employees in South Africa. The issues that need to be considered include leave when employees elect to stay at home as a precautionary measure against contracting the coronavirus at work, the enforcement of employment contracts, employment security, workplace discipline, working hours, absenteeism, and the employer’s duty to provide the employees with a safe working environment. Using a doctrinal legal research method, the article provides an analysis of the applicable laws and cases from South Africa and related jurisdictions. The comparative content, analysis of legislation, case law, and sector-specific guidelines show that COVID-19 has and will continue to have a significant impact on the employment laws as reflected in different jurisdictions. Although employment law is generally jurisdiction-specific, there are many commonalities in the laws of different countries, both on the African continent and globally. It is also important to note that the existing employment laws need to be adjusted in order to accommodate the effects of the pandemic. For example, South Africa can draw valuable lessons from other jurisdictions on how to deal with employment matters during a pandemic, and therefore COVID-19 presents the country with an opportunity to develop both its employment laws and the common law.

I ‘Notice’ You ‘Noticing’ Me: A Critical Analysis of the Section 129 Notice of the National Credit Act, and Recomendations for the Implementation of a ‘Specialised’ Foreclosure Notice

I ‘Notice’ You ‘Noticing’ Me: A Critical Analysis of the Section 129 Notice of the National Credit Act, and Recomendations for the Implementation of a ‘Specialised’ Foreclosure Notice

Author: Ciresh Singh

ISSN: 1996-2185
Affiliations: Attorney of the High Court
Source: South African Mercantile Law Journal, Volume 33 Issue 1, 2021, p. 56 – 88
https://doi.org/10.47348/SAMLJ/v33/i1a3

Abstract

Section 129 of the National Credit Act provides that a creditor may not commence any legal proceedings to enforce a credit agreement before first issuing a section 129(1)(a) notice to the debtor. Thus, in a foreclosure context, should a mortgagee wish to enforce a mortgage agreement, he must first comply with section 129(1) and deliver a section 129 notice to the mortgagor. Should this not be done, any ensuing foreclosure proceedings could potentially be excipiable. Accordingly, section 129 has been described as the gateway to litigation and compliance with this section is paramount for debt enforcement. Unfortunately, section 129 has been the subject of much criticism and uncertainty due to its ambiguous wording and the resulting interpretation. Much of the uncertainty relates to the way in which the notice must be delivered and the contents of the notice. With specific regard to foreclosure proceedings, section 129 fails to alert the debtor about his rights and remedies and fails to notify the debtor of the full consequences of foreclosure. Consequently, the section has been amended several times. Unfortunately, the amendments have not resolved all the loopholes in section 129, and some of these amendments have created more uncertainty and ambiguity. Case law has, however, provided some direction as to the interpretation of section 129. Despite the amendments and case law developments, uncertainty still exists, and clarity is urgently required in relation to the interpretation and application of section 129 during foreclosure proceedings. It is accordingly suggested that certainty can only be achieved by implementing a specialised ‘foreclosure notice’.

In Joint Matrimony We Share: Controlling the Powers to Use the Trust to Limit Matrimonial Property Rights in South African Law

In Joint Matrimony We Share: Controlling the Powers to Use the Trust to Limit Matrimonial Property Rights in South African Law

Authors: Aubrey Manthwa & Paul Nkoane

ISSN: 1996-2185
Affiliations: Senior Lecturer, University of South Africa; Lecturer, University of South Africa
Source: South African Mercantile Law Journal, Volume 33 Issue 1, 2021, p. 89 – 111
https://doi.org/10.47348/SAMLJ/v33/i1a4

Abstract

The deceitful use of trusts has created a fair amount of controversy, specifically where it has appeared that a trust has been employed to limit the rights of third parties. This article argues that it is in the interests of the law to ensure that rights are vindicated when unlawfully limited. Similarly, it is in the interest of the common good that legitimately acquired rights are protected. Trust laws state that there must be a separation between control and enjoyment and, in cases where there is no separation, the courts may scrutinise the affairs of a trust. Recent developments have illustrated that measures that provide relief to spouses upon the dissolution of the marriage may not be readily invoked, especially for marriages in community of property. Family trusts have provided spouses with avenues for hiding assets that would otherwise fall into the joint estate. Courts need to adopt a robust approach when dealing with trust assets upon the dissolution of a marriage, particularly to protect the rights of competing spouses.

Contract as a Basis for Mediation Confidentiality

Contract as a Basis for Mediation Confidentiality

Author: Michael Laubscher

ISSN: 1996-2185
Affiliations: Lecturer, North-West University
Source: South African Mercantile Law Journal, Volume 33 Issue 1, 2021, p. 112 – 136
https://doi.org/10.47348/SAMLJ/v33/i1a5

Abstract

Confidentiality is seen as one of the pillars of mediation. Parties to mediation rely on this essential aspect of mediation in order to protect themselves against the subsequent use of confidential information which has been divulged during mediation and outside the mediation process. The mediation agreement is seen as one of the basic legal foundations for the application of mediation confidentiality as it constitutes a contract between the parties, and it also contains a confidentiality clause. This article deals with contract as a basis for mediation confidentiality. It considers the nature of mediation as well as the parties involved in mediation. It further discusses some of the principles of contract law and the interpretation of contract law in South Africa in the light of the mediation agreement.