SOUTH AFRICA Law and Practice Contributed by: Professor Michael Katz, Matthew Morrison, Madison Liebmann and Sinovuyo Damane, ENS
4.3 Shareholder Meetings Position Under the Companies Act
two shareholders can require particular proposed resolutions on the agenda. 4.4 Shareholder Claims A shareholder may seek judicial relief if subjected to oppressive or prejudicial conduct due to any act or omission of a company, or the exercise of a direc - tor’s powers. A court may make any order it deems appropriate, including restraining the conduct or set - ting aside an agreement or transaction. Shareholders may also approach the court to safeguard their rights or remedy harm caused by: • the company violating the Companies Act or • the MOI; or • a director breaching their legal duties. In limited instances, a shareholder may apply to pre - vent the company or directors from breaching the Companies Act or MOI. A claim for damages may also be brought where shareholders have suffered loss due to a breach of the Companies Act. Statutory Derivative Action The Companies Act empowers shareholders to demand that a company institute legal proceedings to protect its legal interests. The company may apply within 15 business days to set aside such demand only on grounds that it is frivolous, vexatious or devoid of merit. 4.5 Shareholders in Publicly Traded Companies Disclosures by Shareholders in Publicly Traded Companies The amendments to the Companies Act introduced by the GLAA (see below) have inserted the definition of an “affected company”, which essentially means a regulated company and a private company that is controlled by or is a subsidiary of a regulated com - pany. In terms of Section 122, a person must notify an affected company in the prescribed manner and form within three business days after that person: • acquires a beneficial interest in sufficient securities of a class issued by that company such that, as a
A public company must convene an AGM no more than 18 months after incorporation, and annually thereafter (within 15 months after the preceding AGM). AGMs are not required for private companies, though they are commonly included in the MOI. At minimum, the following must be covered at an AGM: • presentation of the directors’ report, audited AFS, audit committee report, SEC report and remunera - tion report; • election of directors as required; • appointment of auditors, audit committee and SEC; and • any other issue raised by shareholders. Shareholders’ meetings may also be convened for specific matters when requisitioned by the board, a person indicated in the MOI, or shareholders hold - ing at least 10% of the relevant voting rights (except where a court determines the matter is frivolous, vexa - tious or already decided). Meetings may be conducted entirely or partially by electronic communication. Default Positions The following default positions may be altered by the MOI: • notice period – 15 business days for public and non-profit companies, ten business days for oth - ers; • quorum – shareholders representing at least 25% of total votes exercisable, with a minimum of three shareholders present (if the company has three or more); • if no quorum, the meeting is postponed by a week and those present at the postponed meeting com - prise a quorum; and • for JSE-listed companies, round robin resolutions are permitted for very limited shareholder decisions only. The Board or any person specified in the MOI may call a shareholders’ meeting at any time. The Board must call a meeting if demanded by share - holders with at least 10% of voting rights. Any
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