How are offers for minority securities enforced in corporate law?
Authors Paul Nkoane
Source: Journal of Corporate and Commercial Law & Practice, The, Volume 3 Issue 2, 2017, p. 52 –78
The topic of enforcement of offers for minority securities is somewhat novel to South African law. This article is intended to evaluate the mechanics which may be employed to ensure that offers for minority securities are fulfilled. The previous statutes contained certain measures regarding takeovers and mergers that were intended to enforce the Securities Regulation Code. The measures contained in this Code were wide enough to apply to numerous scenarios, including cases where there was general non-compliance with the Code or where there was failure to acquire minority securities. Conversely, the Companies Regulations of 2011 contain rules relating to the parties’ compliance with the requirements during acquisition, but without rules created to secure compliance post initial acquisition. As such, minorities may not have measures available to them to enforce their rights. However, the Companies Act 71 of 2008 specifies that courts may apply the common law to enforce the same legislation. The common—law measures that can be applied where the takeover rules are breached, are contained in the Securities Regulation Code on takeovers and mergers. Therefore, it is essential to evaluate whether the measures contained in the Securities Regulation Code on takeovers and mergers can be useful in forcing the defaulter to render adequate performance to minorities.