Possible contribution of corporate law remedies to curbing illicit outflow of capital from Africa
Authors Tshepo H Mongalo
Affiliations: Associate Professor of Law at the University of the Witwatersrand, Johannesburg
Source: Journal of Corporate and Commercial Law & Practice, The, Volume 1 Issue 1, 2015, p. 1 – 34
The long-standing problem of capital flight from Africa as a result of the deliberately mischievous activities of multinational corporations is not lessened by the obvious inability of the conventional Anglo-American corporate law remedies to extend legal standing to constituencies other than equity investors. However, the lessons from the recent corporate law developments in South Africa show that the appropriate extension of legal standing in corporate law remedies to accommodate other corporate constituencies and the public interest can go a long way to contributing to the reduction of the scourge of this disempowering conduct of multinational corporations. The extension of legal standing to accommodate non-shareholder corporate constituencies and the public interest should, however, be embarked upon within reasonable limitations if the new corporate legal enforcement framework is to be of any utility. The South African experience offers lessons as to how these reasonable limitations can be made a permanent feature of the new enforcement framework. The paper argues that the insistence on the conservative, and, largely, individualistic Anglo-American corporate legal enforcement framework at all costs will make it difficult, if not impossible, for modern corporate law to contribute to the limited arsenal that can be employed to stem the tide of illicit capital flight from Africa.