It's been an intriguing period with so much happening that choosing what to write about is an exercise in itself. First off, though, and certainly high on my list, is the matter of the successor to Dominique Strauss-Kahn to head the International Monetary Fund. I am uncertain about Christine Lagarde, France's current Economics and Finance Minister – and I cannot think why a Frenchman should necessarily be followed a French woman. In addition, it shouldn't pass notice that Strauss-Kahn fell from grace over a personal foible or that, whatever the rights and wrongs of the matter, the French public prosecutor has recommended that Lagarde should be the subject of a full judicial inquiry into her role in the Bernard Tapie affair.
Will they, won't they – the Wal-Mart/Massmart merger obstacles (challenges) kept everyone guessing, including the parties themselves. What was debated in many circles was how far Wal-Mart was prepared to be pushed before it told SA to take a hike which would have, undoubtedly, damaged the country's ongoing efforts to encourage foreign investment. In February without prejudice's sister publication, DealMakers, announced the 51% acquisition by Wal-Mart of Massmart as Deal of the Year; at the time, despite some rumblings, it appeared a done deal. In January, 95% of Massmart shareholders entitled to vote, approved the Walmart offer and when in early February the Competition Commission gave its unconditional go-ahead it was anticipated that the Tribunal would follow suit. But the Competition Tribunal heard an increasingly aggressive government/trade union argument and took into account the "public interest grounds" put forward.
The South Gauteng High Court recently ruled that the interest rate of up to 1.5% per month applicable to mezzanine funding is not usurious and does not constitute an unlawful penalty in terms of the Conventional Penalties Act (51 of 1962).
Over the past few years, there has been considerable interest from international investors in investing in Africa. Many of the prominent investment houses and companies see the continent as having huge economic growth potential and seek to participate in the growth of emerging markets.
The death of a person is a sad natural phenomenon. It is also sad for the creditors of the deceased. What happens to the contractual obligations and debts of the deceased upon death, especially mora interest? Scoin Trading v Bernstein NO 2011 (2) SA 118 (SCA) recently considered this question.
In February of this year, the JSE introduced a new facility on its main board, the BEE Segment. This facility enables companies which already have listings on the JSE to list a new class of shares with identical rights to the shares already listed, but which may only be traded by BEE certified individuals or entities. These shares are referred to as BEE securities, and can be traded on the JSE in the same manner as ordinary listed shares, except that only BEE compliant persons may acquire them.
An opportunity for the Constitutional Court to provide much needed clarity on the interpretation of s89(5)(c) (the provision) of the National Credit Act (34 of 2005) appears to have been squarely missed in its recent judgement of Cherangani Trade and Invest 107 (Pty) Ltd v Mason and Others (CCT 116/2009)  ZACC 12. By far the Act's most punitive provision, s89(5)(c) obliges courts to order that credit providers, who have entered into credit agreements that are deemed unlawful, forfeit all their rights in terms of such agreements to the state.
In terms of the Companies Act, 1973 (Old Act), the powers of the directors of a company were limited only to those specially conferred on them in terms of the articles of association. Accordingly, under the Old Act, directors were unable to exercise any powers not specifically conferred on them in terms of the articles. In many instances, even where certain powers where allocated to the directors under the articles, the exercise of those powers were still subject to the approval of the members, whether by ordinary or special resolution.
In a judgement delivered on November 30 2004, the SCA upheld the defence of iustus error at the expense of the caveat subscriptor rule. The case concerned Brink v Humphries & Jewell (Pty) Ltd 1 in which the contract denier, a director of a company, had completed an application for future credit on behalf of the company. The application form also imposed a suretyship obligation on the person signing it in respect of the company's indebtedness to the contract assertor. By his own admission, the contract denier had signed the document without reading it. When he was sued on the suretyship, he raised the defence of iustus error.
The personal liability of directors is becoming an emotive and important issue for company directors in South Africa. The topic gained momentum with the introduction of the new Companies Act (71of2008)and general concerns on the part of directors in respect of personal liability.
The new Companies Act (71 of 2008), as amended by Companies Amendment Act (3 of 2011) which became effective on May 1 2011, introduced a new formal, modern, method to rehabilitate companies that are financially distressed. Business rescue is an alternative to liquidation and replaces the rarely used and mostly unsuccessful process of judicial management.