November 2011

From My Window - November 2011 From My Window November 2011

So Colonel Muamar Gadaffi, the eccentric and often way-ward leader of Libya, is dead, killed by members of a movement whose sole purpose was to overthrow him and his 42-year long regime. He was accused variously of being a dictator with a blood-thirsty appetite who killed his opponents without compassion, who sponsored worldwide terrorism and who carried a personal liability for the nearly 300 killed in the bombing of a Pan America jumbo jetliner over the Scottish town of Lockerbie in 1988. Ostensibly at least, those in rebellion against him stood for everything that was better – and then promptly fell into his category by executing him (and other members of his family) and dragging his body through the streets of the city of Misrata.

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Editor's Note - November 2011 Editor's Note November 2011

“We are the 99%" has become instantly recognisable as the slogan of Occupy Wall Street. The demonstrations in New York City (which have now spread to, it is claimed, at least 900 other cities) have been called “'The American Spring," and a “democratic awakening" by some while others, less enamoured of the event, have called it leaderless and a group of rabble-rousers.

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Protecting SA’s retirement savings Financial Law November 2011

Published in February this year, the most recent amendments to Regulation 28 of the Pension Funds Act (24 of 1956) for the first time amended asset allocation limits governing the retirement industry at both a product and a member level. As such, individual investors are now compelled to comply with investment restrictions previously imposed at only an overall product level and are allowed maximum exposures of 75% to equity, 25% to property and 25% to offshore investments.

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Direct agreements in project finance transactions Financial Law November 2011

Project finance is a form of limited recourse finance and involves financing (usually on a long-term basis) the development or exploitation of a right, natural resource or other asset based upon the project's projected cash flows rather than the balance sheet of the entities undertaking the project.

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On status symbols & cultural similarities . . . Financial Law November 2011

It is said that there are many similarities between South Africa and New Zealand. Obvious similarities such as an historical association as former British colonies, shared geographic location in the Southern hemisphere, comparable climates, cultural similarities (in particular an unparalleled love of rugby), come to mind. But can a similarity in "trust cultures" be added to this list? Especially when the New Zealand's trust culture has recently been described as "viral " and New Zealanders as "having a predilection for trusts beyond that experienced in similar countries." This description was recorded in the Issues Papers of the New Zealand Law Commission which, at the end of last year, embarked upon a systematic review of itsr law of trusts. Four Issues Papers have been released.

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Managing credit risk through suretyships Financial Law November 2011

Suppliers who grant credit to their customers ought to take steps to ensure that the prospects of recovery of these debts are as certain as they can be. A customer's continued profitability and financial security is never guaranteed, even where liability for the debt is admitted. This much is particularly apparent in times of economic downturn. Once flourishing and valued customers, who were granted credit facilities, might now find themselves unable to meet debts to longstanding suppliers, in contrast to years of excellent credit histories.

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Moving towards a low-carbon economy - Part 2 Financial Law November 2011

Part 2 of a three part series


The relationship between fiduciary duties and ESG considerations in investment policymaking and practice as expressed in SA case law is unclear at this stage but the consideration of ESG factors is arguably legally permissible...

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VAT in Europe Tax International Law November 2011

There were changes to the way in which value added tax is charged on supplies of services within and outside the European Union at the beginning of the year. In view of the current rates of VAT, these changes are worth understanding, particularly if you or entities connected to you use the services of professionals, such as administrators, lawyers and accountants.

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Prescribed officers Company Law November 2011

The significance of being a “prescribed officer" under new Companies Act, 2008 (Companies Act) has the following principal implications:

  • Prescribed officers are, for the most part, subject to the same duties, standards of conduct and potential personal liability as those applicable to directors;
  • The grounds of disqualification applicable to directors (for instance, being convicted of certain offences) apply equally to the holding of a prescribed office;
  • The remuneration of prescribed officers must be dis- closed in the annual financial statements of companies that are required to be audited;
  • Certain transactions between companies and their prescribed officers are regulated, for instance the issuance of shares to prescribed officers, the repurchase by a company of shares from prescribed officers, and financial assistance given by a company to its prescribe officers; and
  • Insurance and indemnification of prescribed officers is regulated.

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Judgements start to flow Company Law November 2011

In a judgement handed down in the Gauteng High Court on May 20 the Applicant, a director and share- holder in Beagles Run Investments 25 (Pty) Ltd, applied for

  • the company to be placed under supervision in terms of the provisions of s131(4)(a) of the new Companies Act; and
  • the commencement of business rescue proceedings and the appointment of an interim practitioner in terms of s131(5) of the same act.

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Directors' obligation to notify creditors of financial distress Company Law November 2011

The new Companies Act creates certain onerous obligations and duties on company directors. One of these is to ensure that a director does not trade the business of his or her company recklessly, negligently or conduct the company's business with the intention of defrauding a creditor.

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Duty to disclose interests Company Law November 2011

Fiduciary duties and duty to disclose interests

The fiduciary duties that directors owe their company basically entail that they act in good faith, for a proper purpose and in the best interests of the company. This is codified in s76(3)(a) and (b) of the Companies Act (71 of 2008), which should be read with the common law to establish the exact content of the fiduciary duties.

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Mandatory offers Company Law November 2011

Mandatory offers by persons who wish to acquire more than 35% of the shareholding in a regulated company are dealt with in s123 of the Companies Act, 2008. Takeover Regulations to the Act have been gazetted in terms of s120, and regulation 86 deals with mandatory offers. –

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Contemplating the leniency policy Competition Law November 2011

It is a general principle that in certain circumstances administrative acts and their consequences must be regarded as valid until set aside. As was said in Oudekraal Estates vs City of Cape Town 2004 (6) SA 222 (SCA) para 26.

"The proper functioning of a modern state would be considerably compromised if all administrative acts could be given effect to or ignored depending on the view the subject takes on the validity of the act in question. No doubt it is for this reason that our law has always recognized that even an unlawful administrative act is capable of producing legally valid consequences for so long as the unlawful act is not set aside."

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Stem cell research in South Africa Medical Law November 2011

Imagine a world where deadly diseases such as cancer and AIDS can be treated; where suffering caused by spinal cord injuries, birth defects, neurological disorders, strokes and diabetes can be eased by a simple transplantation of biological cells known as stem cells in the human body. This is considered possible through regenerative medicine in the form of cell-based therapy.

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