Abusing business rescue proceedings by a director and its impact on King IV™ ethics of good corporate governance

by | Nov 4, 2023 | JCCL, JCCL V9 I1

Abusing business rescue proceedings by a director and its impact on King IV™ ethics of good corporate governance

Author: Simphiwe P Phungula

ISSN: 2521-2575
Affiliations: LLB, LLM, PhD (UKZN)
Source: Journal of Corporate and Commercial Law & Practice, Volume 9 Issue 1, 2023, p. 25 – 42
https://doi.org/10.47348/JCCL/V9/i1a2

Abstract

In the past few years, the impact of COVID-19 in South Africa has given rise to the need for business rescue proceedings for financially distressed businesses. Moreover, the looting, unrest, and floods in certain parts of South Africa have exacerbated businesses’ financial stress. To help financially distressed companies in South Africa, the Companies Act 71 of 2008 has introduced a business rescue procedure aimed at helping these ailing companies. This mechanism aims to rehabilitate financially distressed companies so that they become solvent again and, if that is not possible, yield a better return for the company’s creditors or shareholders than would result from the immediate liquidation of the company. Unfortunately, since the introduction of business rescue, evidence has shown that sometimes companies resort to business rescue proceedings to seek refuge from creditors even if the facts do not justify that the company should commence business rescue. In most cases, the abuse of business rescue is done by directors who pass a resolution that the company should embark on business rescue even if evidence shows that the company should not commence the proceedings. This is done notwithstanding the principles of the King IV Report on Corporate Governance™ (King IV™), which requires ethics and good governance on the part of directors. This article demonstrates how the abuse of business rescue can impact the principles of good governance and ethics of King IV™. It argues that directors should rethink their corporate practices and ethical standards when passing a resolution to commence business rescue proceedings.

Reimagining a new world of South African Insolvency Law: Advantage to creditors and section 39(2) of the constitution

by | Nov 4, 2023 | JCCL, JCCL V9 I1

Reimagining a new world of South African Insolvency Law: Advantage to creditors and section 39(2) of the constitution

Author: Alastair Smith

ISSN: 2521-2575
Affiliations: BA LLB (Rhodes), PhD (Edin)
Source: Journal of Corporate and Commercial Law & Practice, Volume 9 Issue 1, 2023, p. 43 – 91
https://doi.org/10.47348/JCCL/V9/i1a3

Abstract

A recent judgment in an application for a final order of compulsory sequestration provided startling justification for granting the order even if the debtor’s estate has no assets that would provide a pecuniary benefit and prospect of a dividend for creditors by relying in part on s 39(2) of the Constitution of the Republic of South Africa, 1996 and extensive quotations from two Constitutional Court decisions on other topics. The connections between the scope, purport and objects mentioned in s 39(2) and the subject matter of the case were not stated by the court but left to the reader to imagine and construct. Possible lines of justification are ventured in this article. The judgment’s vision of radically reimagining the South African law of insolvency is based on misapplying s 12(1)(c) of the Insolvency Act 24 of 1936. In possible moves towards reforming South African insolvency law by abandoning the requirement of advantage to creditors in a new statute, it would be essential for the legislature to canvass detailed, well-informed, carefully considered research and guidance by experts on South African social, economic and financial policy in the current circumstances.

The independent non-executive director: Origins, regulation and persistent challenges

by | Nov 4, 2023 | JCCL, JCCL V9 I1

The independent non-executive director: Origins, regulation and persistent challenges

Author: Helena Stoop-Koornhof

ISSN: 2521-2575
Affiliations: LLB (Cum Laude) (Pretoria), LLM (Stellenbosch), PhD (Durham)
Source: Journal of Corporate and Commercial Law & Practice, Volume 9 Issue 1, 2023, p. 68 – 91
https://doi.org/10.47348/JCCL/V9/i1a4

Abstract

The premise that non-executive directors acting independently from management is essential to the integrity of the company board has driven much of the corporate governance agenda for decades. This is the case, despite conflicting empirical evidence of the value or contribution of independent non-executives. In addition, the exact meaning of ‘independence’ in the context of the corporate board remains opaque, and expectations regarding the role and remit of the office are far from settled. This article elaborates on some of these themes. The discussion will introduce the reader to the salient concepts and offer an overview of the most prominent discourse and recent developments with reference to approaches in the United States, the United Kingdom, the European Union and other jurisdictions. Ultimately, the paper contributes to the ongoing debate surrounding the efficacy of the independent non-executive director as a critical oversight mechanism in good corporate governance and the extent to which regulation can and should scaffold the office.

Practice Note: Supreme Court of Maryland overrules prior distinction between director’s managerial and non-managerial duties and reaffirms that the MGCL is the ‘sole source’ of director duties to the corporation and its stockholders

by | Nov 4, 2023 | JCCL, JCCL V9 I1

Practice Note: Supreme Court of Maryland overrules prior distinction between director’s managerial and non-managerial duties and reaffirms
that the MGCL is the ‘sole source’ of director duties to the corporation and its stockholders

Authors: James J Hanks Jr, Hirsh M Ament, Judah L Rosenblatt

ISSN: 2521-2575
Affiliations: Senior Partner, Venable LLP, Baltimore, MD; Partner, Venable LLP, Baltimore, MD; Associate, Venable LLP, Baltimore, MD
Source: Journal of Corporate and Commercial Law & Practice, Volume 9 Issue 1, 2023, p. 92 – 94
https://doi.org/10.47348/JCCL/V9/i1a5

Abstract

None

Chuma Himonga’s scholarship on the Recognition of Customary Marriages Act 120 of 1998

by | Oct 14, 2023 | ACTA, ACTA 2023

Chuma Himonga’s scholarship on the Recognition of Customary Marriages Act 120 of 1998

Author Lea Mwambene

ISSN: 1996-2088
Affiliations: Dip Nursing, LLB (Hons) (UNIMA), LLM LLD (UWC); Professor, University of the Western Cape, South Africa
Source: Acta Juridica, 2023, p. 1 – 18
https://doi.org/10.47348/ACTA/2023/a1

Abstract

This article is an appreciation of the influence of Chuma Himonga’s work on my research and that of many other academic writers. It begins with a discussion of Himonga’s contribution to a greater understanding of the importance of taking into account the lived realities of the communities to which reformed laws apply. Thereafter, the article takes stock of the practical implementation of the Recognition of Customary Marriages Act 120 of 1998 in addressing the conflicts between customary laws and women’s rights in a customary marriage context. The article considers Himonga’s contribution to the greater understanding of this reality by analysing the courts’ jurisprudence. The final section of this paper suggests that Himonga’s thesis, in which she cautions against the danger of reducing reformed laws into ‘paper law’, has a universal appeal. In particular, I argue that her thesis provides useful insights into the best practical approaches to resolving conflicts between customary rules and practices and human rights. Afrikaans: Hierdie artikel is ’n evaluering van die invloed van Chuma Himonga se werk op my navorsing en dié van talle ander akademiese skrywers. Dit begin met ’n bespreking van Himonga se bydrae tot ’n groter begrip van die belangrikheid daarvan om die geleefde realiteite in ag te neem van die gemeenskappe waarop hervormde wette van toepassing is. Daarna evalueer die artikel die praktiese implementering van die Wet op Erkenning van Gebruiklike Huwelike 120 van 1998 om die konflik tussen gewoontereg en vroue se regte in die konteks van gebruiklike huwelike te hanteer. Die artikel kyk na Himonga se bydrae tot die groter begrip van hierdie realiteit deur die howe se regspleging te ontleed. Die finale gedeelte van hierdie dokument stel voor dat Himonga se tesis, waarin sy waarsku teen die gevaar om hervormde wette as ‘papierwette’ te aanvaar, ’n universele aantrekkingskrag het. Ek redeneer in die besonder dat haar tesis nuttige insig verskaf in die beste praktiese benaderings om konflik tussen gewoonteregreëls en praktyke en menseregte op te los.