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REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA,

GAUTENG LOCAL DIVISION,

JOHANNESBURG

                          CASE NO: 30537/2019

In the matter between:

AFRIC OIL (Pty) Ltd                                                                                               Applicant

and

TSEKE BENY NKADIMENG                                                                      First Respondent

COMPANIES AND INTELLECTUAL

PROPERTY COMMISSION                                                                   Second Respondent

JUDGMENT

Mdalana-Mayisela J

1. This is an application to declare the first respondent a delinquent director under section 162(5) of the Companies Act 71 of 2008[1] (“the Act”). In the alternative, the order sought is that the first respondent be placed under probation in terms of section 162(7) of the Act for a period of 5 years and may not be or act as a director of any company during that period. The application is unopposed. During argument, I was satisfied upon my enquiring from applicant’s counsel that a proper service in compliance with the rules has been made on the first respondent.

2. The applicant is a petroleum wholesaler. At the relevant time the applicant consisted of six non-executive directors which are Marious Damain Matroos; Dr Thabo Clifford Kgogo; Kgolofelo Kgongwedi Dorcus Masoga; Rubeena Solomon; Keith Errol Ashen and Maurizio Mariano.

3. In addition to the aforesaid non-executive directors, the Board of the applicant also consisted of two executive directors which are: the Chief Executive Officer and the Chief Financial Officer. At the relevant time, the first respondent was the Chief Executive Officer of the applicant and Isaiah Mutandiwa was the Chief Financial Officer. The first respondent was appointed the CEO in terms of the contract of employment. His contract was for a fixed term of 5 years. As Chief Executive Officer together with the CFO they were responsible for the day-to-day running and operation of the applicant.

4. The shareholding in the applicant was as follows: 71,13% held by Afric Oil Holdings (Pty) Ltd; Efora Energy Limited holding 100% shares in Afric Oil Holdings (Pty) Ltd and the Government Employees Pension Fund (managed by the Public Investment Corporation – is the majority shareholder in Efora Energy Ltd); 28.87% held by the Compensation Fund (managed by the Public Investment Corporation) and the first respondent holds an interest in Moopong Investments Holdings (Pty) Ltd and Gentacure (Pty) Ltd.

5. The employment contract concluded with the first respondent as CEO expired on 31 August 2017. The Board resolved on 31 August 2017 not to extend or renew his employment contract. The first respondent resigned from the Board as Director with effect from 1 September 2017. The circumstances which give rise to the application to declare the first respondent a delinquent director arise from the auditor’s report from Ernst and Young (“EY”) report in which a number of matters amounting to misconduct were levelled against the CEO and the CFO. They related to matters such as staff loans to the first respondent personally without the Board’s approval; as well as unauthorised cash collections by first respondent. The Ernst and Young’s report was provided to the Board during or about 13 and 14 July 2017 in respect of the year ending 31 December 2016. Pursuant to the findings in the Ernst and Young’s report, the Board resolved that the conduct of the first respondent necessitate an application to the Court for him to be declared a delinquent director. A fraud case was also opened with the Sandton police station by the applicant against the first respondent. A cash amount which was handed over to the first respondent by former Boland Diesel Depot Manager, Andre Bronkhorst was also recorded. The various amounts received by the first respondent are detailed in paragraphs 8.6.1 to 8.6.7 of the founding affidavit totalling R599,000.00.

6. The question that remains is whether the conduct of the first respondent amounts to conduct which falls within section 162(2) of the Act. The first respondent has not opposed the application and the facts as stated in the founding affidavit are not disputed. There is no reason for the Court to reject the facts as unfounded or false. I accept the facts as correct and that indeed the first respondent committed the misconduct that is alleged in the Ernst and Young report. I am also satisfied that the conduct aforesaid falls within section 162(2) of the Act[2] which entitles the applicant to bring this application on the strength of these facts to declare the first respondent a delinquent director. I am satisfied that a proper case has been made out by the applicant for the first respondent to be declared a delinquent director. Section 162(5) requires that the declaration of a delinquency subsists for a period of not less than seven years or any other period prescribed by the Court. I am satisfied that the first respondent’s declaration of delinquency should subsists for a period of seven years.

7. Accordingly, I make the following order:

7.1 The first respondent is declared a delinquent director under section 162(5)(c) of the Companies Act 71 of 2008 for a period of seven years;

 

 

______________________

M M P Mdalana-Mayisela

Judge of the High Court,

Gauteng division

 

 

On behalf of the Applicant

Advocate: F Van Wyk

Instructed by

Kern Armstrong &Association

Office 104, Sherwood House

Greenacres Office PARK

Cnr Rustenburh &Victory Road

Hyde Pak

Tel: 010 109 1055

Fax:  086 613 1709

Email: Zelmamri@kernattorneys.co.za

Ref: Z KERN/EN/A057

 

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