SOUTH AFRICA Law and Practice Contributed by: Professor Michael Katz, Matthew Morrison and Madison Liebmann, ENS
• the quorum prerequisite for shareholders’ meetings for any company is shareholders representing at least 25% of the total votes exercisable at the meeting, whether the shareholders are physically present or repre - sented by proxy; • at minimum, three shareholders must be present in person or by proxy, if the company has three or more shareholders; • in the event that a quorum is not attained at the first assembly, the meeting will be post - poned by a week and those present at the postponed meeting will be considered to comprise a quorum; and • for JSE-listed companies, the Listings Requirements permit round robin resolutions for very limited shareholder decisions only, and the balance of shareholder decisions must be approved at general meetings. The board of a company, or any other person specified in the company’s MOI or rules, may call a shareholders’ meeting at any time. The board of directors must call a shareholders’ meeting if a shareholder with a holding of at least 10% of the voting rights, or a group of shareholders with a combined such holding, demands the board to convene a shareholders’ meeting to discuss a specific issue, or if demands are made for sub - stantially the same purpose. If the board fails, the shareholders may pursue an order of the court. Moreover, any two shareholders can require that the company includes particular proposed reso - lutions on the agenda of a meeting demanded as aforesaid or at the next shareholders’ meeting or by round robin. 5.4 Shareholder Claims Position Under the Companies Act In terms of the Companies Act, a shareholder may seek judicial relief if they have been sub - jected to oppressive or prejudicial conduct due
to, inter alia, any act or omission of a company, or due to the exercise of a director’s powers, and a court may make any order it deems appropri - ate, including an order restraining the conduct complained of or setting aside an agreement or transaction. Furthermore, shareholders may approach the court for any order sufficient to safeguard any of their rights or to remedy any harm done to them by: • the company due to a violation of, inter alia, the Companies Act or the MOI; or • a director insofar as that director may be liable for a breach of their legal duties. Moreover, in limited instances, a shareholder may launch an application with the court to impede: • the company from breaching any provision of the Companies Act; or • the company or the directors from violating any constraint included in the MOI regard - ing the company’s capacity or the directors’ authority. A claim for damages may also be brought by shareholders who have endured a loss due to a breach of the Companies Act by directors. Statutory Derivative Action The Companies Act empowers shareholders to mandate a company to institute legal proceed - ings, or take related steps, to protect the legal interests of the company. However, within 15 business days a company may launch an appli - cation to set aside the shareholders’ demand only on the grounds that it is frivolous, vexatious or devoid of merit.
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