Abstract:
The abuse of shareholding power in the interplay of company governance becomes a topic for academic discourse, especially where this research reveals that some of the statutory remedies apply ex post facto. It becomes questionable whether these remedies are sufficient to assist minority shareholders, or salvage certain losses which they may suffer in the circumstances.
Basically, a company’s governance is anchored by its separate juristic personality. A company is governed by its constituent members, which are the board of directors and shareholders. Hence, shareholding is key in company governance.
In practice, the shareholding capacity acts as a major tool of governance and control in a company. Besides, contemporary realities have shown that it is possible for majority shareholders to hold a dual position of power in a company, both as directors and controlling shareholders, which may give rise to abuse if not properly managed.
In the interplay of shareholder governance, the interest of minority shareholders may be susceptible to prejudice and abuse. Such abuse may manifest in circumstances where controlling shareholders tyrannically use their shareholding power to influence decisions of the company. Thus, the abuse of shareholding power becomes inevitable where there are no proper checks and balances defining rights, duties and limitations of powers amongst the different players in company governance.
This research looks at the remedies in sections 163, 164 and 165 of the Companies Act 71 of 2008. The study evaluates whether these sections provide adequate minority protection against the abuse of shareholding power by majority shareholders in the interplay of company governance.
It becomes problematic if the provisions of sections 163 to 165 of the Companies Act 71 of 2008 are insufficient to protect minority shareholders’ interest in the interplay of company governance. Therefore, these remedies are evaluated with an aim to establish whether they are preventive mechanisms, or they provide sufficient cure in their approach. This dissertation recommends alternative ways to curb the abuse of shareholding power in the interplay of company governance.
