Cassim, RehanaCassim, Maleka Femida2016-05-062016-05-062007Cassim, R & Cassim, MF 2007, 'Gardner v Margo : a misapplication of section 38 of the Companies Act', South African Law Journal, 124, no. 1, pp. 37-47.0258-2503 (print)1996-2177 (online)http://hdl.handle.net/2263/52517This article was written by Maleka Femida Cassim before she joined the University of Pretoria.The notorious prohibition against the giving of financial assistance for the shares of a company contained in s 38 of the Companies Act 61 of 1973 arose yet again in the recent Supreme Court of Appeal case of Gardner & another v Margo 2006 (6) SA 33 (SCA), in a judgment handed down by Van Heerden JA. One of the issues before the court was whether a guarantee given by a company in respect of a sale of the shares of that company was a contravention of s 38. The court ruled that the guarantee given by the company had not constituted financial assistance. On a proper application of the principles laid down in Gradwell (Pty) Ltd v Rostra Printers Ltd 1959 (4) SA 419 (A) and Lipschitz NO v UDC Bank Ltd 1979 (1) SA 789 (A), it appears that the court may have misapplied the established legal principles. Had it not done so, it might well have reached a different conclusion as to whether the guarantee had constituted financial assistance.enJuta LawCompanies Act 61 of 1973Supreme Court of AppealJudgementFinancial assistanceArticle