Tag archives: Shareholders

D & O insurance and reflective loss claims

Photo of Donald DinnieBy Donald Dinnie on Posted in Insurance
At common law when a wrong is done to a company only the company can sue for the damage caused to it. That does not mean that the shareholders of the company may not consequentially suffer any loss (what is known as a reflective loss). Any negative impact the wrongdoing has on the company is … Continue reading

Director’s disclosure of personal financial interests – What happens when you don’t walk away from the table?

Photo of Raphael ChitambiraPhoto of Stephen Kennedy-GoodBy Raphael Chitambira and Stephen Kennedy-Good on Posted in General
A director of a company who has a personal financial interest, or knows that a related person has a personal financial interest, in a matter to be considered at a board meeting must disclose that interest and any other material information relating to the matter before it is discussed at the board meeting (section 75 … Continue reading

Claim by shareholders against directors under section 218(2) of Companies Act fails

Photo of Patrick Bracher (ZA)By Patrick Bracher (ZA) on Posted in Banking
Shareholders of African Bank Investments Limited failed in their claim for over R720 million against the directors and auditors of African Bank. The plaintiffs sued unsuccessfully under section 218(2) of the Companies Act 2008 alleging that the conduct of the defendants resulted in a loss to the shareholders because of the drop in the share price. The … Continue reading

Minority shareholder who dominated board held to control a company

Photo of Patrick Bracher (ZA)By Patrick Bracher (ZA) on Posted in Insurance
A court, asked to dismiss a claim against Tesla Motors, found it reasonably conceivable that Elon Musk, a 22.1% shareholder, was a controlling shareholder because of his ‘actual domination and control over the directors’ wielding more power than may be evidenced by the minority shareholding. Normally the courts of Delaware, where the case happened, would … Continue reading

Shareholder has no claim for company’s loss

Photo of Riccardo Petersen (ZA)By Riccardo Petersen (ZA) on Posted in Banking
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 … Continue reading
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