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

• Jurisdiction: South Africa
• Citation: 1986 (2) SA 442 (C)

Ex parte Suiderland Development Corporation
Ex Parte Kaap-Kunene Beleggings Bpk
1986 (2) SA 442 (C)

1986 (2) SA p442

Citation	1986 (2) SA 442 (C)
Court	Cape Provincial Division
Judge	Van den Heever J
Heard	May 29, 1985
Judgment	June 26, 1985

Flynote : Sleutelwoorde F

Company — Compromise — Scheme of arrangement in terms of G s 311 of Act 61 of 1973 — Scheme of arrangement whereby shares of minority shareholders would be cancelled in consideration of the payment of a cash amount per share — Such does qualify as a "scheme of arrangement" under s 311 — Permissible for the "compensating advantage" to shareholders whose shares are to be "expropriated" to be the payment of money — Does not have to take the form of retention of H rights as members of the company.

Headnote : Kopnota

The Court granted an order authorising the calling of meetings in terms of s 311 of the Companies Act 61 of 1973 for the purpose of considering schemes of arrangement whereby, inter I alia, the shares of the minority shareholders in Suiderland Development Corporation were to be cancelled in consideration of the payment to them of 130 cents per share in cash and the reduction in the nominal value of the shares of the majority shareholders. The Court held, disagreeing with two decisions of the Witwatersrand Local Division, that such a scheme was a "scheme of arrangement" within the meaning of s 311 and that the "compensating advantage" could indeed be the payment of money to the shareholder whose shares were to be "expropriated"; there was no reason why the "compensating J advantage" should have to take the form of retention of rights as members of the company.

1986 (2) SA p443

Ex parte Satbel (Edms) Bpk: In re Meyer en Andere v Satbel A (Edms) Bpk 1984 (4) SA 347 (W) and Ex parte Natal Coal Exploration Co Ltd 1985 (4) SA 279 (W) not approved and not followed.

Case Information

Applications for orders authorising the calling of meetings in terms of s 311 of the Companies Act 61 of 1973. The facts B appear from the reasons for judgment.

S Aaron SC (with him L S Kuschke) for the applicants.

[The Court granted the orders prayed on 29 May 1985 and filed the following reasons for judgment on 26 June 1985.] C

Judgment

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...