Browsing by Author "Bradstreet, Richard"

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    The business case for corporate social responsibility (CSR) is good business: A comparative analysis of CSR practices in the South African and Australian banking sectors
    (2015) Machine, Abigail; Bradstreet, Richard
    A focus of the study will be on the South African banking sector, comparing it with the CSR practices of Australian banking sector. The reason for this comparative analysis stems from the similarities that are prevalent between the two countries, although they have different designations, with one country as a developing country and the other as a developed country respectively. Both countries were once colonies. Australia was ruled by British and South Africa was ruled by Dutch and British. Both countries' financial sectors are well regulated and developed. Similar rules regarding disclosing information are applied in both countries' listed companies. The listed companies in both countries are required to disclose their social and environmental information in addition to their financial information
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    Business rescue in South Africa and its practical application to SME's (small to medium enterprises)
    (2015) Maphiri, Mikovhe Comfort; Bradstreet, Richard
    South African small to medium sized entities are the bread and butter of our economy. Providing much-needed employment and developing skills both formally and informally to historically disadvantaged persons are some of the most significant benefits of small to medium sized entities in a developing country such as South Africa. Unfortunately, despite these highly celebrated significant contributions to the socio-economic development of the country, South African small to medium sized entities have the lowest survival rates in the world, resulting in high rates of business failure and job losses created by these entities. The Companies Act 71 of 2008 provides for a corporate rescue system in the form of business rescue and a compromise between a company and its creditors which replaces judicial management as a corporate rescue procedure for South African companies. Business rescue provides companies in financial distress with opportunities to reorganise, strategize and come up with useful corporate reorganisation measures which are useful and efficient in saving the financially distressed company and possibly yielding a better return for the creditors than would have been the case if the company was liquidated. This study analyses whether the overall South African corporate rescue systems, past and present, have developed in line with the needs and interests of South African Small to medium-sized entities, in a manner that is efficient and sensitive to the inherent weakness of our economy as well as the distinctive needs of small to medium sized entities. A comparative study with similar procedures in the United Kingdom and the United States of America is undertaken to determine whether the evolution of South African corporate rescue laws meets the needs and interests of small- to medium-sized entities in the modern South African economy. Several inherent weakness are identified in the new business rescue regime as well as in compromises between a company and its creditors and a number of recommendations are made to improve the current provisions in the Act, for the purpose of making access and use of these corporate rescue procedures less burdensome and accessible for small- to medium- sized entities. This is done with the purpose of assisting the South African legislature in developing a corporate rescue procedure tailor-made for South African companies and not a mere cut and paste corporate rescue system unfitting to the needs and interests of South African small- to medium-sized entities.
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    The development of a harmonised business model for South Africa and the SADC sub-region
    (2015) Sodeinde, Taiwo Oluseyi; Bradstreet, Richard
    Business rescue regime has led to dramatic improvement in ailing organizations across the globe in recent years. This work critically examines current South African business rescue option in the context of her role in the SADC sub-region. A robust model, taking into consideration, the legal, socio-cultural, political and economic diversity of SADC members is proposed. It is believed that the model can serve as a template for other regions in the continent.
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    Judicial management in Botswana : is it time for change?
    (2015) Mmopi, Peo Malaika; Bradstreet, Richard
    A company is an integral part of society whose existence impacts the country's economy and community as a whole, thus, the previous global financial crisis has highlighted the need for countries to have effective mechanisms to support and encourage corporate rescue. This is important because companies that encounter financial or economic collapse are able to benefit from corporate rescue mechanisms which may help preserve their on - going viability. In this regard, the turnaround of such companies will enable restoration of production capacity, employment, and the promotion of sustainability of capita l and investments. However, existing legal frameworks on corporate rescue in many countries have been found to be wanting, and this has in turn triggered a new wave of legislative reform proposals. Thus, the aim of this dissertation is to interrogate into the issue of whether there is a need for Botswana to reform its insolvency laws in order to accommodate a modernised corporate rescue regime. This dissertation probes on the shortcomings of judicial management as a corporate rescue regime which is currently operative in Botswana. Furthermore, the study reveals the performance of judicial management as a regime in other countries in order to illustrate its inherent weaknesses. This study makes a comparison of the main components that make up modern corporate rescue regimes in order to be able to identify critical issues to be considered in making recommendations for legislative reform. Overall the study recommends the reform of the judicial management laws in Botswana by integrating the positive aspects of corporate rescue as applied in other countries as illustrated by examples of Australia, the United Kingdom and South Africa, and avoiding the pitfalls so far proving a burden in these jurisdictions. The reform should also make adjustments accordingly as relevant to the existing business environment and the economy as well as develop new provisions to cover social conditions unique to Botswana.
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    Piercing of the corporate veil in terms of Gore: Section 20(9) of the new Companies Act 17 of 2008
    (2015) Zindoga, Washington Tawanda; Bradstreet, Richard
    The first part of this minor dissertation will examine the historical development of the common law doctrine of piercing the corporate veil, its status and the concerns raised against the rule. In light of the fact that veil piercing erodes the limited liability of a company, it is necessary to appreciate both the relevance and the significance of separate legal personality and the historical development of the doctrine that carves out exceptions to limited liability in this context. The concept of separate legal personality goes hand in hand with the doctrine of veil piercing. This part will further illustrate the various approaches that courts have taken in deciding whether or not to pierce the corporate veil. A criticism of the doctrine is that it comes with no clear guidelines directing courts to the appropriate circumstances for piercing the corporate veil. It will be argued that the courts have relied invariably on a number of discrete, unrelated categories of conduct upon which to base decisions to disregard the corporate personality of a company, but this approach in the end is unsatisfactory. The concept of corporate personality will be discussed in this part in order to achieve a better understanding of the concept itself and to shed some light on the legal nature of the corporate personality. Furthermore, this part will examine recent trends in foreign law in regard to the doctrine of piercing the corporate veil that may serve as guidelines to the interpretation and the application of the doctrine in South African law. Particularly, the English judicial approach to piercing the corporate veil will be discussed. This in turn will lead to a consideration of the question whether further development is necessary, and if so, which direction is best suited for South African company law. The second part of this dissertation will discuss the rules of interpretation, the basic approaches to statutory interpretation followed by our courts and which approach has enjoyed preference in recent judgments. These approaches will assist in the discussion on the interpretation of section 20 (9) of the Companies Act. Section 20(9) will be examined, and the concerns that writers have raised will be discussed. This part will further examine the judgment delivered in Gore with specific reference to the theories of statutory interpretation used, and the final interpretation applied by the court and what effect this has on the existing rules of piercing the corporate veil. It will be contended that courts must interpret and apply section 20(9) in a way that gives effect to the purport and spirit of the Constitution and results in clarity and simplicity in the statutory doctrine of piercing the corporate veil. The fourth and final part of this research will summarize the discussion, where the research will be considered and recommendations made as to how section 20 (9) should be best interpreted. Given the lack of a unified approach to the scope and conditions of application of the doctrine of veil piercing, which allegedly leads to confusion and frequent misuse, this study aims at clarifying the scope of the doctrine and conditions under which it can be applied. It will attempt to clear up some of the mist enveloping the concept of corporate veil piercing.
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    A private equity structure to facilitate the effective post-commencement financing of business rescue
    (2015) Reineck, Juan-Pierre; Yeats, Jacqueline; Bradstreet, Richard
    Business rescue is a process through which a financially distressed company can be rehabilitated by providing for the temporary supervision of the company, the management of its affairs, business and property. Focused research indicates that one of the main reasons that business rescues in South Africa have failed is due to the lack of post-commencement rescue finance. This dissertation puts forward a researched and suggested financial structure solution that combines two comparatively new concepts in South African corporate law, being business rescue from the Companies Act 71 of 2008 and the financing of venture capital companies in the Income Tax Act 58 of 1962. The outcome of the suggested post-commencement finance structure is that the investors investing in this structured solution would receive an immediate benefit in the form of a tax deduction and a reduction in the financial risk exposure of the investment. In turn, the company in business rescue receiving the investment funds from this finance structure would also benefit from fewer cost burdens associated with traditional debt financing (i.e. servicing of the debt) and thereby increase the probability of a successful business rescue, concomitantly resulting in the improvement in economic activity and importantly, the retention of jobs in South Africa that it so desperately needs.
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    Regulation of executive directors remuneration in South Africa : the road to achieving good corporate governance
    (2015) Asafo-Adjei, Marang Akua; Bradstreet, Richard
    The purpose of this dissertation is thus to evaluate the extent to which the existing legal and regulatory instruments in South Africa have effectively regulated director’s remuneration as a means of ensuring that those in control are accountable to the owners and do not remunerate themselves excessively with the owners’ money. The research will embark on a comparative analysis with international jurisdictions being Australia and the United Kingdom with the objective of determining how these countries have regulated executive director remuneration and the lessons that South Africa can learn from them. Lastly, the research will provide recommendations on how the existing framework s can be improved to ensure adequate and effective regulation of executive director remuneration.
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    Should tax claims be granted some priority in a business rescue: an analysis through the framework of the values and policy underpinning corporate re-organisation
    (2019) Radford, Olivia Jordan; Bradstreet, Richard
    Insolvency systems are fundamental to the functioning of commercial activity. They are essential for the development of credit markets and entrepreneurship, and raise the efficiency level of economies. South Africa’s business rescue regime is an innovative component of its insolvency system because it encompasses more than creditors’ commercial interests; it aims to ensure the equitable treatment of multiple stakeholders such that social, economic and political interests are recognised and optimised as appropriate. However, equitable treatment does not equate to equal treatment. Business rescue organises the claims of stakeholders into a hierarchy. The ranking of tax claims within this hierarchy is controversial because various, divergent social, economic and political interests are implicated by a tax claim against an ailing corporation. This dissertation will assess whether tax claims should be granted some priority in South Africa’s business rescue claims hierarchy. The assessment of the different policy arguments for and against this priority will take place through the lens of corporate reorganisation’s values and policy. This is crucial so that the conclusion is consistent with corporate reorganisation’s objectives rather than being influenced by bias in favour of social or commercial interests.
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    Suggested reasons for the failure of judicial management as a business rescue mechanism in South African law
    (2014) Ofwono, Frederick Ian; Bradstreet, Richard
    In 1926, the South African Parliament introduced a procedure known as judicial management. It was housed in the Companies Act 46 of 1926 (hereafter Companies Act 1926). The purpose of judicial management was to enable a failing company to restructure thus providing an alternative to liquidation. Companies play an important role in an economy and their demise affects not only creditors but also different groups of people that have a working relationship with the company. These include employees, suppliers, shareholders and other stakeholders. The legislature recognised the need to save this relationship in as far as was possible. They attempted to do so by amongst other things, providing for judicial management. Judicial management provided breathing space to companies on the brink of collapse in order to allow them to re-organise their affairs. It tried to achieve this by providing for a moratorium against creditors, divesting the control of the company from previous management who assumedly had run it aground, and by providing for the appointment of a judicial manager who attempted to turn the company around. Due to several factors, judicial management was not much of a success as will be discussed in this paper. Some of the reasons are related to weaknesses in the legislation, the attitude of the courts and in my view, the lack of local precedents initially, for the courts to follow (seeing that judicial management was the first of its kind in South African law) as well as companies themselves, who might have lacked an idea of how the procedure was to be utilised. In order to address the shortfalls in the legislation, a number of amendments were made through the years. One such shortfall was the fact that many companies that applied for judicial management had no real chance of rehabilitation and only did so to avoid a liquidation that was subject to the winding-up provisions of the 1926 Act. Some notable amendments that were made include those in 1932 under s 196(1) that provided for a moratorium to be placed on all actions against the company while it was undergoing judicial management. Section 197(A) introduced the concept of voidable dispositions as it applied in insolvency law. This provision aimed to ensure that companies did not apply for judicial management because they did not want the company to be wound up subject to the rules of insolvency law.
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    The doctrine of piercing the corporate veil in South Africa: an analysis of the South African approach with lessons from the Canadian jurisprudence
    (2020) Bailey, Michael; Bradstreet, Richard
    The first principle of a corporation is the right to have separate legal personality independent from the directors and shareholders. The entity becomes distinct from those who incorporate it and those who participate in the active management of the corporation's business. The corporation is owned by shareholders. The shareholders, as the natural persons with ownership rights in the artificial entity, retain obligations distinct from those of the corporation. The shareholders thus cannot be held liable for obligations that the corporations may be required to fulfil, be it primary or collateral, in its business dealings. There is a separation between the company, as a separate juristic person, and its shareholder. The distinction between the company and its shareholders and directors is described as the infamous ‘veil' to separate the corporation from the owners themselves. The benefit of separate legal personality is the second principle afforded to a corporation - limited liability of shareholders. As a general principle shareholders are not liable for the debts of the company. As a separate legal person the company exists in perpetuity despite changes in ownership structure. This makes commercial sense, because ‘the primary purpose for the doctrine of separate legal personality is to encourage entrepreneurship, by shifting the risks of business failure away from entrepreneurs to creditors and other risk bearers'. Managers of the business can take necessary commercial risks without the consequence of individual liability.