Section 26(2) of the Companies Act 71 of 2008 provides an unqualified right of access to a company’s securities register

Supreme Court of Appeal of South Africa: Deciding an appeal wherein the issue concerned the proper interpretation of s 26(2) of the Companies Act 71 of 2008 and, in particular, whether it confers an unqualified right of access to the securities register of a company contemplated in the section., the Court by a majority observed that Section 26(2) of the Act provides an unqualified right of access to securities registers and if Parliament is of the view that the right should be qualified in some way, because of concerns relating to abuse of the right of access, it can legislate accordingly but it has chosen not to do so.

In the instant case the appeal arose from the attempts of respondents to exercise their statutory right in terms of Section 26 of the Act to access the securities registers of the appellants i.e., the Companies. Respondent 1 was a financial journalist who specialises in the investigation of illegal investment schemes while respondent 2 was a publisher of business, financial and investment news. As part of its on-going investigation into, and coverage of a Group of Companies’ (appellants) controversial property syndication investment scheme, respondent 2 commissioned respondent 1 to investigate the shareholding structures of the appellant Companies, which were purportedly linked (directly or indirectly) to the scheme, and to write articles on his findings for publication by respondent 2.

While interpreting Section 26(2) of the Act, the Court noted that approach of Parliament, regarding interaction between Section 26(2) and the Promotion of Access to Information Act, 2000 (PAIA) was eminently sensible as PAIA is a general statute. It regulates access to innumerable types of information held by a wide range of bodies, with various different types of interests at stake. Parliament, therefore, had to lay down general rules to balance the competing interests at stake by means of threshold requirements, grounds of refusal and public interest overrides. By contrast, Section 26(2) confers a specific right in respect of one type of information only which is the securities registers and directors’ registers. The Court further reasoned that the Parliament justifiably took the view that, in respect of this narrow category of information, it was unnecessary to build in the PAIA balances and counter balances with all the complexity and delay that might entail. Instead, it conferred an unqualified right that is capable of prompt vindication.

With regard to the contention of the appellants that the right of access in Section 26(2) must be qualified by and subject to the provisions of PAIA, and that the person requesting the information must demonstrate that the information is required for the purpose of exercising or protecting a right, the Court held that the appellants reliance on PAIA is unsustainable as it certainly did not render the documents sought in the Rule 35(14) interlocutory application relevant to the main application. [Nova Property Group Holdings v. Cobbett, [2016] ZASCA 63, decided on 12 May 2016]

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