African Bank’s BEE shareholders have applied for leave to appeal against the recent dismissal by the Gauteng High Court (Pretoria) of its legal action against former CEO Leon Kirkinis, his fellow board members and Deloitte. A Business Day report says the case could set legal history by enabling shareholders to sue directors and auditors.

Yesterday, Desmond Lockey – chair of Hlumisa Investment Holdings – confirmed that on Friday the High Court will hear an application for authority to appeal its earlier dismissal of its bid to hold the directors and auditors of African Bank liable for R2bn of damages.

The legal action – launched in 2015 following the collapse of the African Bank share price in August 2014 – has implications for Steinhoff shareholders who believe the directors of the global retail group should be held liable for the collapse of the share price in December 2017.

Hlumisa claims the directors contravened several sections of the Companies Act and this resulted in the business being carried out recklessly ‘or with gross negligence’. In a status report, business rescue practitioner Connie Myburgh warned the Hlumisa shareholders that the legal action against the directors and auditors ‘may still take a few years to be finalised’.

Myburgh said he could not give any view on the success or otherwise of the court case but said the legal team ‘would do its best to achieve the best possible result and the best possible recovery of monies’. A spokesperson for Deloitte said it was not opposing Hlumisa’s leave to appeal but has filed a conditional counter-appeal.

Full Business Day report