Browsing by Author "Yeats, Jacqueline"
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- ItemOpen AccessA comparative analysis of shareholders' appraisal rights in Nigeria and South Africa(2019) Eniola, Abimbola; Yeats, JacquelineFirst, this study stems from the urge to bring clarity as to whether, in Nigeria, there is a statutory framework based on which shareholders can seek appraisal in relation to their shares at any point in time. This is significant in that the corporate statutes in both South Africa and Nigeria provide for similar mechanisms for the protection of minority shareholders in almost every respect including the prejudicial and oppression remedy, derivative actions, squeeze-outs and so on, excepting the appraisal rights. Whilst there is clarity as to the existence of the appraisal remedy provision in South Africa’s corporate statute, the same cannot be said of Nigeria’s corporate statute. Consequently, the primary goal of this study is to identify if there is a framework for the exercise of appraisal remedy in Nigeria’s corporate statute. In carrying out this study, this dissertation examines the various components of the appraisal right provision in South Africa in detail. This helps to provide an understanding around the structure and the rationale behind a standard appraisal right provision. It is based on this understanding that certain pre-identified provisions in Nigeria’s corporate statutes will be investigated with a view to identifying potential statutory framework bearing semblance to South Africa’s appraisal right provision.
- ItemOpen AccessThe acquisition of a business - is a statutory merger in terms of section 113 of the Companies Act 71 of 2008 preferable to a common law sale?(2015) Weyers, Marius; Yeats, JacquelineTwo or more companies may decide that their businesses should be combined for a number of reasons. This may, for example, be done in order for the companies to have access to new markets, to increase their market share, to increase their profitability by reducing the inefficiencies involved in the running of two or more companies in the same business area or to acquire technology, infrastructure, expertise and/or skill in new practice areas. Before the advent of the Companies Act 71 of 2008 South African law did not make provision for 'mergers' as that term is understood in many other jurisdictions. South African law did not recognise any mechanism by which one entity could be combined with another in terms of a statutory process, also referred to as a 'consolidation' in certain jurisdictions. One of the most significant changes proposed for the Companies Act was to make provision for a legal process by which companies could be combined. The concept of the amalgamation or merger of companies was accordingly introduced into our law, so as to enhance the efficiency of business combinations and to promote flexibility in this regard. It is significant that the statutory process of amalgamating or merging companies was adopted in addition to the existing forms of business combinations and/or acquisitions, such as the sale of a business as a going concern, the common law scheme of arrangement and offers to acquire the shares and/or other securities in a company. Companies therefore now have at their disposal an additional mechanism by which to engage in business combinations and/or acquisitions, and are required to consider in each proposed transaction the relevant circumstances to determine which mechanism will be most effective in giving effect to that transaction. This is in line with the move in the Companies Act towards self-regulation and the object of the Companies Act to encourage entrepreneurship. The main purpose of this work is to compare the requirements for, manner of implementation and consequences of an amalgamation or merger as contemplated in the Companies Act, referred to herein as a 'statutory merger', with that of the common law sale of a business.
- ItemOpen AccessAffected persons in business rescue proceedings : has a balance been struck?(2015) Zwane, Muziwakhe Simphiwe; Yeats, JacquelineThe Companies Act of 2008 (the Act) has revolutionised the corporate law landscape in South Africa. The Act has been drafted with the specific intention of promoting access to the economy and of ensuring that cumbersome and costly procedures are (to a large extent) a thing of the past. These objects are a necessity when striving to ensure that South Africa's alarming inequality is abated. One of the central features of the 2008 Act is the introduction of business rescue, a procedure which represents a blatant attempt at striving to preserve ailing companies. The Act states that one of the main objects with regards to business rescue is ensuring that the procedure balances the competing interests involved. The purpose of this thesis therefore is to consider to what extent the 2008 Act has been able to achieve this. This will be done by analysing the rights given to employees, shareholders and creditors. This thesis will argue that though the procedure is a step in the right direction, it has failed to strike a proper balance by overly empowering employees and conversely leaving shareholders somewhat impotent. This thesis will also argue that some of the mechanisms employed, though they may be admirable in what they strive to achieve, leave far too much doubt as to their practicality. The overall conclusion reached is that a major overhaul is not required in order to rid this much needed procedure of its flaws.
- ItemOpen AccessCodification of the Business Judgment Rule in Section 76 (4) Companies Act 2008: comparing the South African with the German approach(2017) Eisele, Stefan; Yeats, JacquelineThe Business Judgement Rule stems from the US common law and relates to the directors duty of care and skill. Currently, the Business Judgment Rule is in operation in many countries all over the world. It is a judicial device used to limit the scope of personal liability for directors and officers. The rule consists of a rebuttable presumption that a director or officer, when making a business decision, has acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company. It should thus form a safe harbour for rational and informed managerial actions. Courts applied the Business Judgment Rule in numerous courts decisions and established certain standards of a proper decision making process. From the experiences of the massive corruption scandals of ENRON and Worldcom and in the light of the experiences of the global financial crisis, there is a rising public interest in good corporate governance and diligent and reasonable management. Therefore, the rule has been codified in numerous countries all over the world. Among these countries are South Africa and Germany. In South Africa, the rule has been incorporated with the Companies Act, 71 of 2008. Germany has adopted the Business Judgment Rule specifically in the German Stock Corporation Act 1965 (Aktiengesetz). These codifications in modern company law are problematic and the scope of their respective application and the meaning of their prerequisites are somewhat unclear. Therefore, opinions about the rule, its application and its concrete effect diverge and the idea of a codified rule in modern corporation acts in contrast to the historical application by courts has been massively criticized. Despite all differences it is generally acknowledged that the rule and its application are intricate and a deep insight in its complex application is required to avoid a misunderstanding and a misapplication of the rule by the competent courts. The author intended to identify potential problems pertaining to the application of the rule and its prerequisites. By comparing the German and the South African approach, several similarities and differences were found. Based on these findings, five potential problems for the application of the rule in South Africa and its interpretation by the competent courts were presented in more detail. These problems relate to the scope of application in general, the blurred lines between the terms of rationality and reasonableness, the determination of the concrete judicial review, the avoidance of hindsight biases and the unjustified extension of judicial review by over interpreting the term proper purpose. Although it is hardly possible to present practical solutions for all these problems in a minor thesis, reviewing the rule, its prerequisites, and its rationale by considering additional experiences from other countries enhances the awareness of potential problems and risks. The primary guideline for the application of the rule has to be - in any case - the avoidance of the hindsight bias.
- ItemOpen AccessCompany law and the protection of creditors' interests: from capital maintenance to solvency and liquidity and beyond - a South African perspective(2010) Arnot, Michael James; Yeats, JacquelineCompany law in South Africa has recently been subject to an extensive review which culminated in the passing of a new act, being the Companies Act No. 71 of 2008 (hereinafter 'the new companies Act or 'new Act'). The new Act has not yet come into effect but officials at the Companies and Intellectual Property Office remain optimistic that the new legislation will become effective before the end of the year. The new Act takes South African company law away from its English law roots and brings it into line with international trends. Indeed the South Africanisation of company law was one of the stated objectives of the review process; it being held to be important that the unique characteristics of the South African context and especially the promotion of equity as envisaged under the Constitution be taken into account in the drafting our laws. This research paper is primarily concerned with the legislature's efforts to protect company creditors' interests via mechanisms designed to maintain the economic or capital base of a company. Historically this found expression in the capital maintenance rule but problems with this rule resulted in it being shelved in favour of a regime based on solvency and liquidity. The concept of imposing solvency and liquidity requirements on companies in certain instances was introduced into South African company law in amendments to the existing Companies Acts promulgated in 1999. This resulted in the fragmented approach to the maintenance of an economic or capital base of a company that we currently face: certain areas being subject to the newly imposed solvency and liquidity requirements while at the same time other provisions built around capital maintenance remaining in force.
- ItemOpen AccessCompulsory acquisition of minority shareholding : a critical analysis(2015) Smit, Albertus Ebenhaezer; Yeats, JacquelineThe compulsory acquisition refers to situations where the minority shareholders are compelled to dispose of their shares. In certain instances the minority shareholders can compel the majority to acquire their shares by an enforced acquisition. The compulsory aspect is thus the unilateral and coercive aspect of the transaction that can arise subject to the fulfilment of certain statutory and regulatory requirements. These transactions are commonly known as squeeze-outs or freeze-outs, whereas sell outs is where minority shareholders have the right to have their shares acquired by the company on a compulsory basis. In this dissertation the argument will be made that the objective of these forms of transactions is to relieve the majority or controlling shareholder from undue oppression by the minority shareholders not only in instances of control transferred squeeze outs but also in respect to control maintained transactions. The dissertation will focus on the three main forms of squeeze-out transactions being the tender offer squeeze-out, the squeeze-out by means of a fundamental transaction and the supermajority squeeze-out transaction. The emphasis will be on how the first two forms of transactions are implemented in the South African context and a case will be made to include the final form in t out legal framework. A specific emphasis will be given to the regulation of these transactions in ensuing the fairness to the affected minority shareholders.
- ItemOpen AccessCorporate Governance and Ubuntu: a South African and Namibian perspective(2021) Harris, Aisha-Deva; Yeats, JacquelineOver the past two decades the emphasis on corporate governance practice has increased globally. The corporate governance models which guide corporate ethics, currently employed in African countries, are extensively driven by Western elements. Corporate governance practice in relation to the African philosophy of Ubuntu is under analysed. While Ubuntu has been studied comprehensively in a number of legal disciplines, it has not enjoyed comparable attention in its application, relevance, and potential to enhance corporate governance practices in Africa. Limited academic research exists on the integration of the Ubuntu philosophy into corporate governance and the ethical perspectives introduced. Therefore, this dissertation aims to bridge this gap by exploring the current guiding frameworks of selected corporate governance practice in relation to the principle of the African philosophy of Ubuntu. Here, corporate governance practice is examined in South Africa and Namibia. Business ethics, ethical perspectives, corporate social responsibility, and the African notion of Ubuntu, in relation to the role that it plays in ethical leaderships, is evaluated. Links between Ubuntu and established Western ethical perspectives and theories support its use and significance for enhancing current corporate governance frameworks in these countries. The findings of this dissertation strengthen the need to analyse Ubuntu, particularly in relation to its link with social responsibility and ethical perspectives, in order to augment current corporate governance practices in Africa. It is submitted that corporate governance practices in Africa should reflect the notions of Ubuntu more clearly and coherently which will serve as a progressive model to enhance effective corporate governance.
- ItemOpen AccessCorporate governance deficiencies in the regulation and disclosure of director remuneration in the South African context of mergers and acquisitions(2014) Smith, James William; Yeats, JacquelineOne of the first times the controversy of director remuneration reared its head was during the financial crisis of 2008 which was described as the biggest financial crisis since the Great Depression of the 1930’s. The Organisation for Economic Co-operation and Development (OECD) and the United Nations body United Nations Conference on Trade and Development (UNCTAD) both cited failures in corporate governance, the practices of director remuneration and inadequate regulation and control thereof, as specific causes of the financial crises of 2008. The reason for this is that remuneration systems employed by companies failed to sufficiently align remuneration packages of directors with the strategy, risk appetite and long-terms interests of the company and shareholders4 The controversy arose when even though many companies failed or showed great losses, directors were still paid out excessive bonuses and were considered to be rewarded for failure. This controversy was caused by the failure of corporate governance systems to effectively regulate and enforce company remuneration practices, the adequate disclosure of information regarding director remuneration, and the lack of shareholder input in the determination of director remuneration and bonuses. In addition is the fact that most corporate governance systems are based on a ‘comply or explain’ or ‘apply or explain’ approach which, despite its advantages, renders the application of corporate governance structures voluntary, or at a minimum, non-compliance could be explained away. This dissertation examines a weakness in the corporate governance structures of South Africa regarding the disclosure director remuneration in the context of mergers and acquisitions. The submission is that directors act in their own interests; that they benefit more from mergers and acquisitions than the company and its shareholders vis-à-vis short and long term incentives, contrary to the fiduciary duty owed to the latter; and posits that the current corporate governance system in South Africa, its disclosure requirements, and its application are insufficient.
- ItemOpen AccessCorporate governance in South Africa progress and challenges(2013) Chakanika, Andrew; Yeats, JacquelineSouth Africa is one of the fastest emerging economies of the world and this rapid economic growth has been largely attributed to the adoption of the King codes and the various corporate governance structures. Against this background, this dissertation will begin by discussing the major changes that have been made from the King II report to the King III report. The driving forces behind this dissertation are contained in chapters three and four as these chapters will seek to ascertain some of the major progresses and challenges that have been scored in the area of corporate governance.
- ItemOpen Access“Deadlock Provisions in Equity Joint Venture Agreements”(2018) Scherer, John-Patrick; Yeats, JacquelineThe dissertation “Deadlock Provisions in Equity Joint Venture Agreements” gives a comprehensive overview and a detailed analysis of the existing contracting possibilities addressing conflicts between the partners of an equity joint venture which cannot dissolved by them. To understand the variety of such deadlock provisions and their effects on the relationship between the joint venture partners, reaching from provisions which preserve the joint cooperation (preservation mechanisms) to provisions which force the exit of, at least, one partner from the joint company (exit mechanisms), are the key points of the dissertation. Given such variety of deadlock provisions and their possible combinations, a comprehensive overview and a detailed analysis including a comparison of such clauses will support future joint venture partners to decide whether and, if yes, what types of deadlock provisions are suitable for their joint venture and should, therefore, be included in the joint venture agreement. Previous work has failed to give such a comprehensive overview and analysis of deadlock provisions consisting of a description of the different types of provisions, an explanation of their effects, and the provision of the respective example clauses. After a short description of the various types of joint ventures and the structure of an equity joint venture, the dissertation examines on the basis of example clauses preservation mechanisms and exit mechanisms typically included in equity joint venture agreements. The complexity of the different deadlock provisions, in particular the combination of preservation mechanisms and exit mechanisms, but also the question what types of disputes between the joint venture partners should be defined as “deadlocks” triggering such procedures require that joint venture partners understand the effects of drafting the joint venture agreement, in particular the inclusion of deadlock provisions, when they are entering into a joint venture. The dissertation provides the joint venture partners with a guide to cut through such complexity and to understand how the joint venture agreement should be drafted for their joint cooperation.
- ItemOpen AccessThe effective and proper exercise of appraisal rights under the South African Companies Act, 2008 : developing a strategic approach through a study of comparable foreign law(2016) Yeats, Jacqueline; Jooste, RichardThis thesis seeks to identify how the appraisal rights remedy, which was introduced into South African company law for the first time by section 164 of the Companies Act 71 of 2008 ('the South African Act'), should be interpreted and applied in order to facilitate its effective and proper exercise. When the draft version of the South African Act was initially published for public comment, critics raised concerns that the inclusion of the appraisal remedy was undesirable and unnecessary. These concerns were largely motivated by the fact that at the time appraisal rights were a novel concept and thus a completely unknown quantity in South African law. As a result there was much uncertainty in the legal and commercial sector as to how these rights would be interpreted, how they would function and how frequently they would be used. However, since the commencement date of the South African Act (being 1 May 2011) to date no appraisal rights matter has come before our courts and it could therefore be argued that the initial concerns of the critics regarding the impact that the inclusion of appraisal rights would have on South African company law were unfounded. This 'lack of use' phenomenon is in line with the general trend experienced in foreign jurisdictions where the appraisal remedy has been on the statute books for decades, such as the United States of America ('USA' or 'US'), Canada and New Zealand. Due to the fact that appraisal rights are notoriously underutilised they have often been dismissed as an ineffective remedy for minority shareholders. Clearly it could not have been the intention of the drafters of the South African Act to include an ineffective or useless remedy. My research indicates that the lack of use of the appraisal remedy in comparable jurisdictions is due to a number of factors but can be broadly attributed to the complexity, uncertainty and expense associated with the exercise of appraisal rights. The thesis therefore seeks to identify the various causes of the lack of effectiveness apparent in the USA, Canada and New Zealand, to examine the relevance of these in the South African context and to consider possible ways of addressing these challenges. The ultimate objective of the thesis is to devise measures which may be taken so that the appraisal remedy can function more effectively, or at least as effectively as possible, in South Africa.
- ItemOpen AccessThe effectiveness of the appraisal right as a form of shareholder protection(2013) Nicol, Byron Lloyd; Yeats, JacquelineWith the objects of facilitating the creation of business combinations, promoting flexibility and enhancing efficiency in the South African economy the legislature liberalised fundamental transaction policy under the Companies Act 71 of 2008 ('the Act'). Two of the leading reforms were: limiting the court's involvement in the approval of fundamental transactions to specified circumstances, and the introduction of the innovative American concept of amalgamations and mergers ('M&A').
- ItemOpen AccessEnforceable accountability: a corporate governance mirage for South African state-owned companies(2021) Stevens, Angela Gail; Yeats, JacquelineThis research examines the operational and financial shortcomings of South African State-Owned Companies (‘SOCs') which is shown to primarily stem from a lack of enforceable accountability. The resolution of this accountability issue begins with the identification of SOCs. An analysis is undertaken of the predominant statutes with which SOCs are required to comply: the Public Finance Management Act and the Companies Act. An examination of these statutes, together with relevant case law and secondary sources, reveals contradictory, convoluted and confusing provisions relating to the definition and categorization of various State-Owned Enterprises (‘SOEs') and SOCs. A complete overhaul of these statutory definitions and categorisations is required through the enactment of an overarching legislation to govern all aspects relating to all SOEs, under which SOCs will be subsumed, as was previously proposed by the Presidential Review Committee on State-Owned Entities in 2012. The various accountability mechanisms, which should currently be implemented by SOCs, are analysed in terms of primary and secondary sources of law. This analysis divides the mechanisms into two distinct categories: internal and external mechanisms. Internal accountability mechanisms include: the directors, the board and its committees, the role of the company secretary and internal audit and the state, as the sole shareholder of the SOC. The external accountability mechanisms include: the external audit, the role of the Auditor-General and Public Protector, the legislature, the judiciary and the public, as the ultimate stakeholder of the SOC. Notwithstanding the availability of these accountability mechanisms, SOCs still fail to actually account for their continued underperformance. Research conducted through a direct analysis and interpretation of the annual, integrated reports of South African Airways SOC Limited (‘SAA'), from 2012 to 2017, will illustrate the inability of an SOC to effectively account for its performance. It is shown that one of the significant challenges which contributes to the accountability issue facing an SOC stems from the fact that the state is its sole shareholder. Evidence from this case study, together with that garnered from the investigation of the Zondo Commission of Inquiry into State Capture, will conclusively unveil the significant accountability issues experienced by many SOCs in South Africa. There is limited case law on the corporate governance and accountability of SOCs, however, an examination of secondary sources of law illustrates the growing trend for the board of an SOC to implement 3 corporate governance structures to achieve accountability. However, it is submitted that corporate governance, whilst popular, may not be the best method for achieving the accountability of SOCs. A structured framework entailing the enforceable accountability of SOCs is proposed as a solution to the accountability issue through the implementation of a reward-based system which incentivizes the board of an SOC, and the state, to achieve real and significant accountability. This system requires the establishment of an independent rating agency which will rate the accountability of an SOC. The rating of the SOC will be linked to the provision of state funding, with maximum thresholds based on specific rating levels. The board of an SOC will retain the discretion of deciding which mechanism is to be instigated to attain actual accountability, of which corporate governance is just one method. The board of an SOC, and the state, will be incentivized to achieve a high rating level in order to secure preferential state funding. This reward-based enforcement mechanism for the accountability of SOCs will require legislative reform through the enactment of overarching SOE legislation to govern all aspects relating to SOEs. In addition, legislation will be enacted to establish an independent rating agency, akin to the state institutions established under chapter nine of the Constitution. The implementation of an effective enforcement mechanism will result in the achievement of actual and significant accountability for SOCs which will ultimately improve their performance and reduce their reliance on the state's scarce resources.
- ItemOpen AccessEnsuring adequate funding for the takeovers watchdog(2009) Chokuda, Carias Tererai; Yeats, JacquelineThe Securities Regulation Panel (the Panel) is a regulatory body establishedin terms of s 440B of the Companies Act 61 of 1973 (the Act). Its function is,among other things, to regulate corporate mergers and takeovers. It ismandated to make rules relating to the effective monitoring of compliancewith, and enforcement of, the Securities Regulation Code on CompanyTakeovers and Mergers (the Code: see ss 440C (1)(a) and (4) (e) of the Act). The Panel was formed pursuant to a report made to the Standing Advisory Committee on Company Law by the Hon Mr Justice Cecil Margo and Professor Stefan Naude in 1983 (the Margo Report: see The Securities Regulation Code: Its Background, Implementation and the Role as Pertaining to Take-overs and Mergers, available at http://www.srpanel.co.za/Background.pdf accessed on 2 June 2008). In the report Margo J and Professor Naude did not consider it necessary to discuss the administrative and financial details of the Panel's organization because they did not foresee any insurmountable problems (see C Margo and S Naude 'Take-overs and Mergers: the City Panel and the Position in South Africa' in Report to the Standing Advisory Committee on Company Law (1983) 35). With the benefit of hindsight, one could say that they ought to have discussed the issue, for the Panel established as a result of their recommendation has faced, and continues to face, financial problems which threaten its continued financial viability. This in turn affects its ability both to monitor compliance with, and to enforce, the Code. In the course of events, details of the Panel's financing scheme were left to be determined by the legislature and the Panel itself.
- ItemOpen AccessAn evaluation of corporate governance legal frameworks in Nigeria: lessons from international organisations and other jurisdictions(2016) Iguodala, Egbe; Yeats, JacquelineThere is a global trend in the international community, within countries, and within corporate organizations for the promotion of good corporate governance practices. The aim is to foster sustainable development in countries and particularly within corporations at local, national, regional and international levels. This is because emerging reports and research seem to suggest that the effective implementation and practice of good corporate governance principles in a country promotes sustainable development and foreign direct investment, thus boosting the economy of that country. By implication it is only corporations which adopt good corporate governance practices that will achieve sustainable growth and development domestically and internationally in the competitive business environment. In Nigeria, given the fact that the practice of good governance by most corporate organizations is still a challenge, there is therefore a need for a corporate governance regulation that will serve as a baseline standard applicable to all companies registered, whether public or private. Accordingly, this thesis will be examining the existing corporate governance regulations and the newly released draft national corporate governance code in Nigeria to ascertain whether or not they address current corporate governance challenges and their compliance with international best practices.
- ItemOpen AccessFinancial Assistance - A new approach(2009) Yeats, Jacqueline; Jooste, RichardThe Companies Act 71 of 2008 introduces a new s 44 which deals with financial assistance by a company for the acquisition of its shares and which will replace s 38 of the current Companies Act 61 of 1973 when the new Act comes into operation. The focus of the legislation has shifted from the prohibition to the regulation of financial assistance in this context, and the article subjects the new section to comparative and contextual analysis, seeks to interpret the specific provisions and highlights possible areas which may prove to be problematic or confusing.
- ItemOpen AccessFormation of a company : what Uganda could learn from South Africa’s modified system(2014) Nambasa, Sharon; Yeats, JacquelineFormation of a company is an important aspect of the economy as well as socio-economic development whose process must be made accessible to all entrepreneurs because of its far-reaching consequences. This study examines the position of the process of company formation in Uganda as enshrined in the Companies Act 1 of 2012 as well as the requirements of other requisite legislation. The study further, discusses the obstacles of company formation as well as the resultant impact of a widespread informal sector in Uganda. The study concludes by using South Africa as a case study on how Uganda could improve on its process of company formation. Consequently, making it simpler and more adoptable to the entrepreneurial population to enhance and foster economic development.
- ItemOpen AccessFrom the capital maintenance rule to the solvency test: some thoughts on the new approach to creditor protection in Malawian company law(2017) Kumwenda, Zumbe Andrew; Yeats, JacquelineIn July, 2013 Malawi enacted a new Companies Act [Act No. 15 of 2013] replacing the old Companies Act 19 of 1984. The Companies Act, 1984 was basically an adoption of the English Companies Act, 1948 and in line with the English law, it regulated distributions through the classical capital maintenance rule. In contrast, the new Companies Act, 2013 which came into force in May, 2016 has jettisoned the capital maintenance rule. As an alternative to that rule, the Act has introduced for the first time in Malawian company law edifice, the concept of the solvency test. Jurisdictions that have adopted the solvency test in their company law essentially have done so on the basis that company law should focus on the core risk at stake – company insolvency, and that it is meaningless to state that creditors look to the company's capital as a trust fund out which their debts would be settled. Despite having the same theoretical basis for adopting the solvency test, the manner in which the solvency test is defined and applied in a particular statute has significant effects on whether in its operation, the test affords adequate protection to the interests of creditors. This research examines the definition and application of the solvency test under the Companies Act, 2013 so as to determine whether in its operation as a financial restriction for distributions and other company transactions, it will afford adequate protection to creditors. It follows the approach used by Professor Kathleen Van der Linde in her analysis of the solvency and liquidity approach in the Companies Act, 2008. Thus, it analyses the Malawian law by focusing on the two separate elements of the test (equity solvency and balance sheet solvency) as well as other aspects of the test which are likely to raise legal interpretation issues. The twin solvency test adopted in different jurisdictions ordinarily varies in its balance sheet solvency element. Some jurisdictions such as South Africa and New Zealand utilise the net assets approach in their balance sheet test. Others such as New York and Delaware still emphasise on the trust fund doctrine and thus utilise stated capital in their balance sheet test. Malawi is a stated capital/surplus jurisdiction. Its new solvency based regime still focuses on the meaningless trust fund doctrine. The new solvency test approach in Malawi is incomplete and inadequate to fully protect creditors against opportunistic shareholder behaviour. A number of recommendations are made for an effective solvency test approach that will afford adequate protection to creditors against opportunistic shareholder behaviour.
- ItemOpen AccessGlobalisation and the rise of multinationals - the divergence of responsibility and accountability(2014) Leupi, Benjamin; Yeats, JacquelineThis minor dissertation particularily aims at - inspired by and considering the King Report and after analysing the situation and examining the various possible approaches - providing a contribution to the current social and political debates in Switzerland by issuing five recommendations on how to reform and adapt the (legal) framework in order to curtail and remediate the negative impacts globally active companies potentially have in terms of social, economical and environmental issues (in home and host countries alike) without curtailing the positive effects companies inarguably have and without immoderatly jeopardising the country’s vital competitivness.
- ItemOpen AccessImplementing the UN Global Compact: role of the law of contract in promoting sustainability in international supply chains(2018) Mboya, Meshack Kathama; Yeats, JacquelineThis paper analyses the need for multinationals to adopt and fully implement the UN Global Compact principles in their operations by influencing sustainability down their international supply chains. This analysis is premised on the various theories supporting the adoption of sustainable business practices by businesses in terms of labour, human rights, environmental responsibility and anti-corruption. The objective of the analysis is to propose the applicable law of contract tools that the multinationals can use to implement their sustainability commitments down international supply chains. Since the supply chain partners of these multinationals are distinct entities operating independently and only dealing with the multinationals through contracts, the paper proposes that sustainability can be influenced through the use of such contracts. In this, the paper appraises conditions precedent and express contractual terms as the law of contract tools that can best be utilized by multinationals in influencing supply chain sustainability. The paper shows that these tools can be utilized to guarantee that supply chain partners operate sustainably and in a manner that implements the sustainability commitments of the focal firm - the multinational. Against the background of the already existing systems, this study illustrates that the proposed tools can be used to strengthen the existing systems and especially the use of supplier codes of conduct. It also demonstrates that the effective use of these tools guarantees the adoption of sustainable practices and systems that eventually make the entire supply chain sustainable. The paper concludes that the use of these tools will guarantee the implementation of sustainability commitments, as based on the UN Global Compact, in international supply chains.