March 2012


From My Window - March 2012 From My Window March 2012

This issue of without prejudice is published to coincide with the DealMakers' Annual Banquet at which the rankings of service providers to the corporate finance industry for calendar 2011 are announced. The rankings occupy a significant place because they serve as a guide to companies seeking to engage in either Mergers& Acquisition or general corporate finance activity such as rights issues or new listings. In very large part the rankings are entirely objective; they are based on the arithmetic of the value of deals and their number. While they can – and often are – arguments about the imputed values of deals, nevertheless, it is possible to reach a modus vivendi in most cases. Where this proves impossible, reference is made to the president of the Johannesburg Stock Exchange, for the life so far of DealMakers Russell Loubser.

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Editor's Note - March 2012 Editor's Note March 2012

February is always an excessively busy month in the Gleason Publication office. Figures are checked, sent back for verification, checked again and, sometimes, again and again. The end result makes all the effort worthwhile and it is little wonder that without prejudice's sister publication, DealMakers is held in such high esteem; there is no other M&A and General Corporate Finance publication like it in South Africa and international outfits do not follow the same criteria. DealMakers' results only reflect the work done by South African offices of tombstone parties on deals undertaken by firms listed on the JSE. The highlight of the finalisation of rankings is the DealMakers Gala Awards evening and, included in the acknowledgements are of course, the law firms.

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Is the age of global mega-law firms approaching? Management March 2012

Will we see the emergence of mega-law firms akin to the accounting 'Big 4'? Some of the largest global firms seem poised for further growth. The 'Swiss verein' model pioneered by the 'Big 4' global accounting firms has been a catalyst, allowing flexibility to balance different profitability levels and other tensions between local and global priorities1. But how much more are these global giants likely to grow and what will be the likely impact on local independent firms?

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A little lesson about a bag... Management March 2012

...sometimes I just sit; sometimes I just sit and watch.

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Too little too late? Company Law March 2012

The Companies Act 2008 introduces a “business rescue" culture into South African law (see also p12). The general moratorium afforded to the company, whereby all legal proceedings against the company are stayed pending the outcome of the business rescue procedure, is particularly attractive to companies faced with the prospect of an actual, or imminent, winding up application.

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Sink or swim? Business rescue ... the art of treading water Company Law March 2012

The new Companies Act ( 71 of 2008), as amended, provides an opportunity for companies trading under financially distressed circumstances, to apply for the temporary supervision of the company by a trained Business Rescue Practitioner. He (or she) would take over the management of the company's affairs, business and property for an interim period.

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Conflicts of interest lessons from the UK Company Law March 2012

There has been extensive commentary on the duties of directors following the implementation of the new Companies Act, (71 of 2008).

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The consequences of unintended law Company Law March 2012

Since the new Companies Act (2008) came into effect some teething problems have emerged. This may be due to the fact that the Act is an amalgamation of a number of company law traditions which do not necessarily sit well with each other.

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Non-disclosure is a breach of fiduciary duty Company Law March 2012

Where a company director renders undisclosed and unauthorised consultancy services to entities disposed of by the director's company, that director has a duty to avoid obtaining for himself, secretly or without the approval of the company, any benefit arising out of or connected to his employment.

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Investing responsibly Environmental - Company Law March 2012

The Code for Responsible Investing in South Africa (CRISA), launched for the first time in South Africa last year, became effective on February 1 2012. Thus institutional investors, such as pension funds and insurance companies, as well as their service providers (asset and fund managers and consultants) should now disclose in their reporting to stakeholders the extent to which CRISA's principles have been implemented.

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Unresolved fund management issue Tax March 2012

Investment management is generally defined as the discretionary management of investors' assets, as opposed to investment advisory services where there is no discretion on the part of the manager to take investment decisions on behalf of the fund. Investment advisory services tend to be less labour-intensive given that the adviser merely gives recommendations to someone else who actually takes and implements the investment decisions.

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DTAs – the noose closes Tax March 2012

Recently, the Western Cape High Court had to determine whether the South African Revenue Service would utilise the powers contained in s74A and s74B of the Income Tax Act, (58 of 1962), as amended, to obtain information from a person in South Africa to ensure compliance with the provisions contained in a double taxation agreement (DTA) concluded by South Africa and Australia enabling the exchange of information.

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Relief for Foreign Financial Services Providers...? Financial Law March 2012

The (new) fit and proper requirements applicable to financial services providers (FSPs) in terms of the Financial Advisory and Intermediary Services Act (FAIS) have been a source of much consternation for some time, particularly for FAIS-authorised foreign FSPs, many of whom carry on business in a multitude of highprofile global jurisdictions.

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SA opt-out, eu opt-in Consumer Law March 2012

On October 10 2011, the European Union (EU) tightened its policies protecting consumer rights.

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Is the Consumer Commission a success story? Consumer Law March 2012

The National Consumer Commission (NCC) which has been established in terms of s85 of the Consumer Protection Act (68 of 2008 (CPA)) is, in terms of s99, responsible to enforce the CPA by –

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