The battle between shareholder activist Dave Woollam and the directors of Lewis Stores has escalated, with the lodging of papers at the Western Cape High Court that could result in the minority shareholder having the directors declared delinquent. A Business Day report says if successful, the court action will propel shareholder activism to new and more aggressive levels. Woollam’s application is in terms of section 165 of the Companies Act, described by a corporate lawyer as the most potent weapon available to minority shareholders. The Act enables a shareholder to ask a court to appoint a third party to investigate a company. Four directors of Lewis Stores are facing charges of delinquency that if confirmed could end their careers, notes the report. The four directors are chairperson David Nurek, CEO Johan Enslin, CFO Les Davies and Audit and Risk Committee chairperson Hilton Saven. Woollam’s delinquency allegations include lack of corporate governance, multiple breaches of the National Credit Act and the issuance of consolidated annual financial statements that do not conform with international financial reporting standards.

Full Business Day report  

An independent third party should investigate the affairs at Lewis, Lewis Stores and Monarch Insurance to determine whether certain directors should be declared delinquent. This, notes a Fin24 report, is what Woollam asks the High Court to do in his answering affidavit in an application brought by Lewis regarding the demand to have certain directors declared delinquent. In the affidavit Woollam provides what he deems to be proof of mismanagement by certain directors. In Woollam's view, if these directors are not declared delinquent, Lewis will continue what he regards to be a course to becoming a failed company. The court is expected to hear the matter in mid-August.

Full Fin24 report