Ex parte Suiderland Development Corporation Ex Parte Kaap-Kunene Beleggings Bpk

• Jurisdiction: South Africa
• Judge: Van den Heever J
• Judgment Date: 26 June 1985
• Hearing Date: 29 May 1985
• Court: Cape Provincial Division

Van den Heever J:

In these linked matters I gave orders authorising the calling of meetings in terms of s 311 of the Companies Act 61 of 1973 when the applications were called on 29 May 1985, with an undertaking to provide reasons at a later stage. The orders were granted because it seemed unnecessary to D delay the calling of those meetings, for which the preparatory work had been done. The promise of reasons was made because the granting of the orders contradicts the stand taken by COETZEE J in the WLD in Ex parte Satbel (Edms) Bpk: In re Meyer en Andere v Satbel (Edms) Bpk 1984 (4) SA 347, in which he held that a scheme which amounted to an "expropriation" of shareholders' E rights against compensation could not be classified as "an arrangement between the company and its members or any class of them" as envisaged by s 311. That decision was followed by STEGMANN J in Ex parte Natal Coal Exploration Co Ltd in the same Division on 15 March 1985, J [*] leave however being granted to appeal to the Full Bench. That appeal has to the best of my F knowledge not yet been heard.

Suiderland Development Corporation ("Suiderland") holds 35% of the shares in Kaap-Kunene Beleggings Bpk ("Kaap-Kunene"). Midde-Westelike Visbedryf Bpk ("MWV") is an unlisted public company owned as to slightly less than 50% by Suiderland and as to the balance by members of the public. Its only material G asset is a holding of 4 657 077 of the 13 771 659 ordinary shares issued by Kaap-Kunene.

What is proposed to be achieved inter alia by meetings of the minority shareholders in Suiderland and Kaap-Kunene, is:

1.

The cancellation of the shares of the minority shareholders in Suiderland in consideration of payment H to them of 130 cents per share in cash, and the reduction in the nominal value of the shares of the majority shareholders.

2.

The ultimate winding-up of Kaap-Kunene, by buying out outside shareholders at 420 cents per share as a liquidation dividend and transferring the assets of I the company to Suiderland as a liquidation dividend in specie after conversion of its ordinary shares into A ordinary shares, the articles of association being amended for these purposes and Suiderland to provide the liquidator of Kaap-Kunene with sufficient funds to discharge all debts, meet the costs of winding-up and to pay the cash receivable by the holders of ordinary

Van den Heever J

A shares (ie 420 cents per share) and preference shares (ie capital paid up and preferential dividend calculated to date of winding-up).

3.

MWV will resolve to be wound up.

The effect of the two schemes will be that inside interests (Hanstep Beleggings (Edms) Bpk, Die D & C Kleinkinders Trust, B Andre Pierre du Preez and Pieter Gysbert Steyn Neethling ("the control group")) will effectively become the owners of the entire issued share capital of Suiderland, and that Suiderland will acquire all the assets of Kaap-Kunene save for cash amounts paid to the outside shareholders. The schemes are C interdependent and each is conditional upon the other becoming effective.

Section 311 of the Act provides:

"(1) Where any...