The potency of co-ordination of enforcement functions by the new and revamped regulatory authorities under the new Companies Act

• Jurisdiction: South Africa
• Published date: 15 August 2019
• Author: Dorothy Farisani
• Date: 15 August 2019
• Pages: 433-445

The potency of co-ordination of enforcement

functions by the new and revamped

regulatory authorities under the new

Companies Act

DOROTHY FARISANI*

One of the main aims of the Companies Act 71 of 2008 is regulation. This is

clearly visible from the move by the legislator, in this piece of legislation,

towards the decriminalisation of company law. Under the Companies Act 61

of 1973 enforcement was mainly by means of criminal sanctions. In the 2008

Companies Act, several regulatory authorities have been introduced and some

of the ones that were already in existence have been revamped, as a way of

ensuring that the provisions of the Act are enforced. These regulatory

authorities are the Companies and Intellectual Property Commission (s 185),

which is the regulatory authority that bears the bulk of ensuring that there is

enforcement of the 2008 Act, the Takeover Regulation Panel (s 196), the

Companies Tribunal (s 193), and the Financial Reporting Standards Council

(s 203). These are all administrative bodies with their own individual func-

tions. It is thus important to ensure that the functions of these regulatory

authorities are co-ordinated. In this article, each regulatory authority is

discussed with the main emphasis being on the actual function of the

regulatory authority. From this discussion it will be clear that there are areas

where there are apparent overlaps. Abrief discussion of how the enforcement

function of the High Court will be affected by the regulatory authorities

follows. This is followed by a discussion of how the enforcement functions

may be carried out to allow for co-ordination of the functions.

I INTRODUCTION

‘In so far as administration and enforcement are concerned, one issue for

the review will be the balance between civil, administrative and criminal

sanctions. This is important considering the existing Companies Act too

readily invokes criminal penalties, when civil or administrative remedies

could be more appropriate.’

1

This quotation explains the paradigm shift found in the Companies Act

71 of 2008, from criminal prosecutions, as was the case under the

Companies Act 61 of 1973, to the statutory enforcement of compliance

* BProc, LLB, LLM (UNISA); Associate Professor in Corporate Law,University of South

Africa, Pretoria.

1

‘South African Company Law for the 21st Century: Guidelines for Corporate Law

Reform, May 2004, 11’(hereafter referred to as ‘Guidelines for Corporate Law Reform’).

433

2010 Acta Juridica 433

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