Headline after headline this month has been of disappointing economic data. What began in August 2007 and became known as the American sub-prime crisis, evolved into a global credit crisis by the beginning of the fourth quarter of 2008. In September 2008 Nouriel Roubini observed, “Whenever there is a systemic banking crisis there is a need to recapitalise the banking/financial system to avoid an excessive and destructive credit contraction.
A recent article in Business Day1 highlighted some of the difficulties and pointing of fingers that have been encountered in practice in the context of business rescue under the Companies Act (71 of 2008). A key issue highlighted in the article may be commented on from a legal perspective, namely the situation where a major creditor decides not to support business rescue proceedings in the particular circumstances (with the result that the business rescue plan will inevitably fail due to insufficient votes from creditors). The article in question refers to allegations that such non-support, from banks in particular, is very prevalent in practice.
It goes without saying that the primary goal of a profit company is to increase the wealth of its shareholders by paying dividends and causing the price of the company's shares to increase. The company's board is entrusted with managing the business and affairs of the company in the interests of the company's shareholders, as well as its wider stakeholders such as customers, suppliers, creditors, employees and the community. Therefore, to achieve the primary goal, the board must pay dividends to the company's shareholders without adversely impacting the price of the company's shares or the wider interests of the company's other stakeholders.
The recent Western Cape High Court decision in the case of Discovery Holdings v Sanlam is a curious one. Full of US and Canadian references rather than the usual comfortingly familiar UK and EU ones – and with some pretty muddled thinking at times – trade mark purists will hate it. But it does seem to get there in the end. And it contains some valuable lessons for financial services companies, in fact for companies of all stripes. Lessons that I suspect will be completely ignored.
The verb “extort" means “obtain (money, a promise, a concession, etc.) from a reluctant person by threat, force, importunity, etc." The noun form, “extortion", means “the act or an act of extorting money etc." (The New Shorter Oxford English Dictionary, Clarendon Press, 1993). Requiring someone to pay copyright royalties for a manner of use of a literary work, when none are due in law, amounts to literal extortion. It is not a salutary practice.
This note summarises the recent decision of the South African Competition Tribunal, which found Sasol Chemical Industries guilty of excessive pricing.
The recent SCI excessive pricing decision marks a significant development in the landscape of the jurisprudence in South Africa dealing with abuse of dominance. It is the only case involving excessive pricing in South Africa since Mittal, almost a decade ago. The decision is also important as the Competition Tribunal adopts a different methodology to determine an "excessive price" to that set out by the Competition Appeal Court in Mittal. Mittal Steel South Africa Limited and two Others v Harmony Gold Mining Company Ltd and Another Case No 70/CAC/Apr07). The shift in methodology is likely to be of interest to dominant firms in determining pricing.
Section 8(c) of the Competition Act (89 of 1998) provides a general prohibition against dominant firms abusing their position. Section 9 regulates the conduct of a dominant firm but focuses on when a dominant firm may charge different prices to its customers for equivalent transactions.
Once upon a time I was an in-house lawyer in the UK. During those years I was the senior in-house lawyer in two financial services organisations; Head of Legal Services at Cheltenham & Gloucester plc and Legal Director/Company Secretary at United Assurance PLC.
On February 9 1893, American lawyer, politician and statesman, William Jennings Bryan, proclaimed profoundly: “Next to the Ministry [preaching the word of God], I know of no more noble profession than the law. The object aimed at is justice, equal and exact, and if it does not reach that end at once it is because the stream is diverted by selfishness or checked by ignorance. Its principles ennoble [lend greater dignity or nobility of character] and its practice elevates." (http://madubesbrainpot.wordpress.com/tag/martinluther-king/,)
In the pilot episode of the first season of the popular legal TV series “Suits", the audience is introduced to pro bono work in the following exchange between the firm's managing partner, Jessica Pearson, and the lead character, Harvey Spector: “Jessica: I'll give you your promotion. But you have to do something for me. Harvey: Anything. Jessica: Ah. Pro bono. Harvey: Anything but that. Jessica: Harvey, Pro bono cases are how we, as a firm, show that we care about more than just ourselves. Harvey: I'm not saying we shouldn't do them. I'm saying I shouldn't do them." 1
For years it was the BRICs that were the talk of the town in investment circles. Brazil was the golden child for emerging market investment for a number of years, and other non-BRIC emerging markets such as Turkey also had their share of time in the spotlight. Now it seems that it is Africa's turn to shine in the world of private equity.
Mining and minerals tend to form the backbone of the economies of most African countries. Botswana is no different. The success of the Botswana economy over the years is largely due to the revenues realised from diamonds, which continue to be the mainstay of the economy, currently accounting for more than one-third of GDP, 70-80% of export earnings, and about one-third of the government's revenues.
During 2013, a treasury management company regime was introduced for exchange control purposes to encourage the establishment of group treasury management functions in South Africa and to further enhance South Africa's position as a “gateway into Africa".