Automated Summary
Key Facts
The applicant (Siyakha Fund (RF) Limited) sought exemption from appointing a social and ethics committee under section 72(5)(b) of the Companies Act. The company, part of Standard Bank Group Limited, has a score of 1806 (meeting the threshold for mandatory committee appointment). The court ruled the applicant failed to prove the absence of public interest necessity for a committee and provided no evidence that the applicant's Group Social and Ethics Committee could fulfill the required functions. The application was refused as the company is not a subsidiary of the applicant and lacks sufficient formal mechanisms to replace a social and ethics committee.
Issues
The primary legal issue was whether the company, which has a score of 1806, could be exempted from appointing a social and ethics committee under section 72(5)(b) of the Companies Act. The applicant argued that it is not reasonably necessary in the public interest due to the company's nature and activities, and also attempted to invoke regulation 43(2)(a) by referencing the parent company's committee, but failed to provide sufficient evidence. The court found that the applicant did not demonstrate the exemption criteria were met.
Holdings
- The court found the applicant failed to demonstrate that it is not reasonably necessary in the public interest for the company to have a social and ethics committee.
- The company's score of 1806 necessitates the appointment of a social and ethics committee. The applicant did not provide evidence that the company is a subsidiary of Standard Bank Group Limited with an existing committee to fulfill this requirement.
Remedies
The applicant's application is hereby refused.
Legal Principles
The court applied sections 72(5) and regulation 43(2)(a) of the Companies Act 71 of 2008. Section 72(5)(b) requires the Tribunal to assess whether it is not reasonably necessary in the public interest for the company to have a social and ethics committee. Regulation 43(2)(a) provides an exemption if the company is a subsidiary of another company with an existing social and ethics committee.
Cited Statute
Companies Act 71 of 2008
Judge Name
M.F. Kganyago
Passage Text
- [12] Therefore, under the circumstances, it is my findings that the applicant has failed to show that it is not reasonable necessary in the public interest to require the company to have a social and ethics committee.
- [10] In terms of regulation 43 (2) (a) of the Act, the Company would qualify for an exemption if it is a subsidiary of another company which has a social and ethics committee which will perform the functions required by this regulation. The applicant is not stating that the company is its subsidiary. The terms of reference of the applicant's social and ethics committee have not been attached. In my view there is no proof that the applicant is having a social and ethics committee.
- [11] The activities of the company does not prevent it from appointing a social and ethics committee. For it to qualify for exemption, it must be a subsidiary of the applicant, and there is no evidence presented which proves that the company is a subsidiary of the applicant.