An analysis of the oppression remedy under the South African companies legislation

Abstract

It is trite law that minority shareholders are subordinate to the will of the majority in the company structure. However, the majority may not exercise this power in a manner which is oppressive or unfairly prejudicial to the minority. The statutory oppression remedy was first inserted into the Companies Act 46 of 1926 in an attempt to provide minority shareholders who wanted to exit a company an alternative to making an application for winding up of that company. With the repeal and replacement with the Companies Act 61 of 1973, this provision was widened so as to apply to any fact pattern so long as the minority shareholder had suffered unfair prejudice. Finally, with the implementation of the Companies Act 71 of 2008, the remedy was further widened as to the class of applicants, the alleged conduct suffered, and perhaps with regard to the relief available to reflect the changing attitude toward the oppression remedy in South Africa and in other jurisdictions. This research firstly maps the important development changes between the three different South African acts and discusses whether such development, based on judicial interpretation and academic analysis, is being done in a manner to make this valuable remedy easier for the affected applicants to access. Secondly, the South African remedy has been compared with that in Australia, Canada and England to determine how the remedy follows international consensus and in what way the remedy may be improved with foreign jurisdictions as a goalpost.