The role of the independent expert in schemes of arrangement and share repurchase transactions under the Companies Act 71 of 2008

Abstract

This mini-dissertation constitutes a critical analysis of the requirements relating to independent experts in the context of schemes of arrangement and share repurchase transactions under the Companies Act 71 of 2008. In particular, the historical development of the expert requirement, its purpose and its intended beneficiaries, is explored. Furthermore, a selection of material issues and considerations relating to the expert requirement are critically analysed, including: (i) the meaning of s 114(3) of the Act and the overlap between the expert report required by ss 114(2) and (3) of the Act and the expert opinion required by the Companies Regulations, 2011; (ii) the meaning of ‘fairness and reasonableness’ under reg 90(6) of the Companies Regulations; (iii) the timing of the distribution of the expert report; (iv) the role of the expert report in facilitating other remedies under the Act; (v) the extent to which the expert may make recommendations in the report and the opinion; and (vi) the role of the board of directors in relation to the expert report and opinion. Finally, the extent to which compliance with the expert requirement may be validly avoided is considered. In this regard, the particular question of whether the expert requirement is capable of being validly waived is critically analysed.