Riza Moosa

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Islamic finance update – new draft governance standards

The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) is an independent Islamic international non-profit body that prepares accounting, auditing, governance, ethics and Shariah standards for Islamic financial institutions and the industry. AAOIFI is respected in the industry and their governance standards are used by many firms globally. The AAOIFI central Shariah board has … Continue reading

Arbitrations hit by moratorium on legal proceedings in business rescue

Overturning a lower court judgment, the appeal court has found that arbitrations are included in the general moratorium on legal proceedings against companies under business rescue in section 133(1) of the Companies Act 2008. In Chetty v Hart, the Supreme Court of Appeal looked at the meaning of the phrase “legal proceedings” in section 133 in relation … Continue reading

Business rescue after liquidation

If prospects of success of business rescue exist a court will allow business rescue to commence even if the company is in final liquidation. In Richter v Absa Bank Limited, the Supreme Court of Appeal pointed out that business rescue protects interests of a wider group of people than liquidation and interpreted the Companies Act … Continue reading

Islamic finance transactions: Is default interest payable?

Islamic finance transactions are governed by Shariah law. These cater for Islam’s prohibition on charging interest. A court will however apply default interest to such a debt when the debtor has failed to perform a contractual payment obligation under such agreement. The Supreme Court of Appeal in Lodhi 5 Properties Investments v FirstRand Bank Limited … Continue reading

Moratorium in business rescue: what does it cover?

The moratorium on legal proceedings against a company in business rescue offers critical breathing space to the company from its creditors, allowing the business rescue practitioner the opportunity to investigate affairs of the company and develop the business rescue plan for its restructure. A recent case offers a useful interpretation of the extent and implications … Continue reading

Sureties may not be affected by business rescue plan

Without deciding the point, the Supreme Court of Appeal in New Port Finance Company (Pty) Ltd v Nedbank Limited held that the decision in Tuning Fork (Pty) Limited v Greeff may not be correct in saying that where the principal debts are diminished or expunged by a business rescue plan the sureties are released accordingly. … Continue reading

Withholding tax on interest pushed back again

Anticipating the widespread effect of the new withholding tax on interest, extensions to its application have been promulgated. The latest Taxation Laws Amendment Bill proposes a further extension of the implementation date to 1 March 2015. Payments of interest to or for the benefit of a foreign person by a South African borrower will be subject … Continue reading

Can you claim against a surety if the debtor is in business rescue?

Every suretyship securing a company’s debts should specifically preserve the creditor’s rights to recover from the surety despite discharge of the principal debt in a business rescue plan. And every business rescue plan should, if possible, contain a provision preserving rights against sureties. If a debtor company is in business rescue, its creditors may call on … Continue reading

Participation bonds

On 20 June 2014 the Financial Services Board issued amended rules for the administration of a collective investment scheme in participation bonds. This updates and amends the rules issued in 2003. Participation bonds are investment products in underlying commercial property development assets. They are regulated under the Collective Investments Schemes Control Act, 2002. The amended rules place … Continue reading

Possible business rescue orders

A court can issue an order placing a company in business rescue if it is shown that the company has reasonable prospects of being restored to a continued solvent existence or of achieving a better return for creditors and shareholders than would result from immediate liquidation. The supreme court of appeal made this finding in Oakdene … Continue reading

What must be proved in a business rescue application

The supreme court of appeal in Oakdene Square Properties v Farm Bothasfontein (Kyalami) gave some useful guidance about what should be in a business rescue application: A party seeking business rescue must show that there is a reasonable prospect of the company being restored to existence on a solvent basis or being restructured to give … Continue reading
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