SCA hears case on directors’ rights during business rescue
The SCA is set to decide on the role of directors during voting on business rescue plans.
Volksblad reports that Piet Louw SC, acting on behalf of the Gupta-linked Tegeta Exploration & Resources directors Ronica Ragavan, Ravindra Nath and Ashu Chawla, argued that directors should be allowed to vote.
Tegeta owns 100% of the shares in the Optimum mine.
The Gauteng High Court (Johannesburg) earlier ruled that only creditors may vote during such proceedings. Louw argued that while business rescue practitioners take control over the management of the company, directors cannot be sidelined completely.
They ought to be assisted by the business rescue practitioner to ensure the survival of the entity.
On the other side, Greg Wickins SC, acting on behalf of the BRPs Juanito Martin Damons and Kurt Robert Knoop, argued that the Companies Act gives full control for the practitioners and directors do not retain any control over the entity’s assets.
Judgment was reserved.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
