A plaintiff who was a shareholder in a liquidated company sued the company’s bank for a R50 million loss in value of his indirectly held shareholding allegedly caused by intentional conduct of the bank for lending money beyond the means of the company and then liquidating the company. The delictual claim for pure economic loss failed because no wrongfulness was proved.
The plaintiff was a shareholder thrice removed from the company. The notion that a company is a distinct legal personality is not a technicality. The company is an entity separate and distinct from its members. Property (including claims) vested in a company cannot be regarded as vested in any of its members. The shareholders general right to participate in the assets of the company is deferred until winding-up subject to the claims of creditors.
A personal claim by a shareholder against the wrongdoer of a company based on diminution in the market value of his or her shares is misconceived. The shareholder suffers no personal loss that can be recovered from the wrongdoer. It does not matter whether the wrongdoer’s conduct is allegedly intentional or negligent.
For these reasons, the plaintiff’s claim was dismissed in Itzikowitz v Absa Bank Ltd.