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IN THE COMPANIES TRIBUNAL OF THE REPUBLIC OF SOUTH AFRICA

CASE NO: CT015DEC2017

In ex parte application of:                                                           

Grupo Antolin South Africa (Pty) Limited                                           Applicant

(Registration Number: 1996/014003/07)

Issue for consideration: Ex-parte application for an exemption from the requirement to appoint a social and ethics committee in terms of section 72(5)(a) and (b) of the Companies Act, 2008 (Act No. 71 of 2008).

Coram: Lindelani Daniel Sikhitha

Decision handed down on 06 April 2016 to January 2017 compared to April 2017 to January 2018  February 2018

DECISION (Reasons and Order)

INTRODUCTION

[1] The Applicant is Grupo Antolin South Africa (Pty) Ltd, which is a private company duly formed and incorporated in terms of the company laws of the Republic of South Africa and with its registered office situated at First Floor, Central Hub Building, Nelson Mandela Bay Logistics Park, Algoa Road, Jagvlakte, Uitenhage Industries, 2196.  The aforementioned company will, going further herein, be referred to as the Applicant.

[2] It is alleged that the Supporting Affidavit accompanying the current application that the Applicant has scored above 500 points in two of the past five years in its Public Interest Score.  Consequently, the Applicant is required to appoint a Social and Ethics Committee (“an SEC”) in terms of section 72(4) of the Companies Act, 2008 (Act No. 71 of 2008) (“the Act”) unless if the Applicant is exempted from doing so in terms of either of the grounds provided for in Regulation 43 of the Companies Regulations, 2011 (“the Regulations”).[1]

[3] This is an ex parte application in terms of section 72(5) read with section 72(6) of the Act for an exemption from the requirement to appoint an SEC.  On the face of the papers placed before me, the current Application was filed with the Companies Tribunal on the 19^th day of December 2017 at about 11h00.

APPLICABLE LAW

[4] Section 72(4) empowers the Minister of Trade and Industry (“the Minister”) to prescribe, by way of Regulations, those companies which shall be required to appoint an SEC.  The Minister did indeed make the Regulations in terms of 223 of the Act.

[5] Regulation 43 of the Regulations states that it applies to every state owned company, every listed public company, and any other company that has, in any two of the previous five years, scored above 500 points in terms of Regulation 26(2) of the Regulations, or would have so scored if the Act had been in effect at that time.

[6] Regulations 43(2) of the Regulations provides that a company to which Regulation 43 applies must appoint an SEC unless if the company in question:

6.1         is a subsidiary of another company that already has an SEC, and an SEC of that other company will perform the functions required by Regulation 43 of the Regulations on behalf of that subsidiary company; or

6.2         has been exempted by the Companies Tribunal in accordance with section 72 (5) and (6) of the Act. [Own emphasis added.]

[7] In terms of section 72(5) a company that falls within a category of companies that are required in terms of section 72(4) and Regulation 43 to appoint an SEC may apply to the Companies Tribunal in the prescribed manner and form for an exemption from that requirement, and the Companies Tribunal may grant such an exemption if it is satisfied that:

7.1         the company in question is required in terms of other legislation to have, and does have, some form of formal mechanism within its structures that substantially performs the function that would otherwise be performed by an SEC in terms of section 72 and Regulation 43 of the Regulations[2]; or

7.2         it is not reasonably necessary in the public interest to require the company to have an SEC, having regard to the nature and extent of the activities of the company[3]. [Own emphasis added.]

[8] In terms of Paragraph 5 of the Supporting Affidavit (“the Supporting Affidavit”) deposed to by one Robert van den Ordel (“Ordel”), the current Application for exemption from the requirement to appoint an SEC is being made in terms of section 72(5)(a) and 72(5)(b) of the Act.

[9] As already indicated in 7.1 above, section 72(5)(a) of the Act provides that an exemption from the requirement to appoint a SEC may be granted by the Companies Tribunal on the basis that the company (the applicant) in question is required in terms of other legislation to have, and does have, some form of formal mechanism within its structures that substantially performs the function that would otherwise be performed by an SEC in terms of section 72 and Regulation 43 of the Regulations.

[10] As already indicated in 7.2 above, section 72(5)(b) of the Act provides that an exemption from the requirement to appoint a SEC may be granted by the Companies Tribunal on the basis that it is not reasonably necessary in the public interest for a company to appoint a SEC having regard to the nature and extent of the activities within the Applicant company.

[11] In terms of Regulation 142(1) of the Regulations, a person may apply to the Companies Tribunal for an order in respect of any matter contemplated by the Act, or the Regulations by completing and filing with the Companies Tribunal’s recording officer:

11.1      an Application in Form CTR 142; and

11.2      a supporting affidavit setting out the facts on which the application is based.

[12] The current Application was submitted by the Applicant to the Companies Tribunal in Form CTR 142 on 19 December 2017.  In the current application, the Applicant is seeking an exemption on the following two bases:

12.1      Firstly, that the company has a form of internal structures which substantially performs the functions of a SEC, as contemplated in section 72(5)(a) of the Act; or

12.2      Secondly, that it is not reasonably necessary in the public interest as contemplated in section 72(5)(b) of the Act for the Applicant to appoint a SEC, having regard to the nature and extent of its activities, particularly in relation to the functions of a SEC as set out in Regulation 43(5);

[13] Form CTR 142 was duly signed on behalf of the Applicant by Ordel, who is the General Manager of the Applicant.  In addition, the Application is supported by an affidavit deposed to by Ordel.  It is clear for the documents placed before me that Ordel had been duly authorized to depose the supporting affidavit and to launch the current Application for and on behalf of the Applicant in terms of the resolution of the board of directors which is annexed to the Supporting Affidavit.

[14] I am therefore satisfied that the current Application complies with the requirements set out in Regulation 142(1) of the Regulations and it is therefore properly brought before the Companies Tribunal.  

EVALUATION AND FINDINGS

[15] The Applicant is a South African registered company which is alleged to be a subsidiary of Grupo Antolin Irausa SA (“Grupo Antolin”).  I gathered from the papers placed before me that Grupo Antolin is a non-resident of South Africa.[4]

[16] In terms of section 1 of the Act, the term “subsidiary” is defined to have a meaning determined in accordance with section 3 of the Act.  Section 3(1) of the Act is most relevant for current purpose and the relevant parts thereof read as follows:

“(1)   A company is-

(a)      a subsidiary of another juristic person if that juristic person, one or more other subsidiaries of that juristic person, or one or more nominees of that juristic person or any of its subsidiaries, alone or in any combination-

(i)           is or are directly or indirectly able to exercise, or control the exercise of, a majority of the general voting rights associated with issued securities of that company, whether pursuant to a shareholder agreement or otherwise; or

(ii)          has or have the right to appoint or elect, or control the appointment or election of, directors of that company who control a majority of the votes at a meeting of the board; or

(b)      a wholly-owned subsidiary of another juristic person if all of the general voting rights associated with issued securities of the company are held or controlled, alone or in any combination, by persons contemplated in paragraph (a).”  [Own emphasis added].

[17] The term “juristic person” is defined in section 1 of the Act and it means the following:

“juristic person” includes-

(a)      a foreign company; and

(b)      a trust, irrespective of whether or not it was established within or outside the Republic...” [Own emphasis added].

[18] The term “foreign company” is also defined in section 1 of the Act and it means the following:

“foreign company” means an entity incorporated outside the Republic, irrespective of whether it is-

(a)      a profit, or non-profit, entity; or

(b)      carrying on business or non-profit activities, as the case may be, within the Republic….”

[19] Based on what I have gathered from the papers placed before me and more specifically the allegations made by Ordel in the Supporting Affidavit, I am therefore satisfied that the Applicant is a subsidiary of Grupo Antolin which is considered to be a foreign company in terms of the Act.  Grupo Antolin is a foreign company that is currently registered in Burgos in Spain and it has its principal place of business in Ctra, Madrid-Irun, KM, 244.8 09007, Burgos, Spain.

[20] Regulation 43(2)(a) of  the  Regulations  provides  that  a  company which is a subsidiary of another company that has a SEC and the SEC of that other company (“the Holding Company”) will perform the functions required to performed by the SEC in terms Regulation 43 on behalf of the subsidiary company.

[21] The Companies Tribunal had already dealt with the interpretation of Regulation 43(2)(a) of the Regulations and found that Regulation 43(2)(a) provides an exclusion rather than an exemption, to qualifying companies who need not apply to the Companies Tribunal for an exemption.

[22] In my view, Regulation 43(2)(a) does not per se deal with the granting of exemptions by the Companies Tribunal, but rather indicate which companies are excluded from the requirement to apply for an exemption to appoint an SEC. Therefore, where a company relies on the provisions of Regulation 43(2)(a) of the Regulations, it need not make any application for exemption to the Companies Tribunal.[5]  Even if the Companies Tribunal were to receive such an application, it would lack the necessary jurisdiction to entertain such an application.

[23] However, the Applicant’s holding company, namely Grupo Antolin is not registered as a company in South Africa as contemplated in the Act. It is for that reason therefore not considered a company in terms of the Act.  Grupo Antolin is however considered a foreign company in terms of the Act. Therefore, the exclusion is not available to the Applicant.  The Applicant therefore permitted to bring the current application for exemption.  I therefore find that the current application is therefore properly brought before the Companies Tribunal.

[24] I gathered from the papers placed before me that the bases of the current application are twofold.  The Applicant bases its application for exemption:

24.1      firstly, on the premise that the Applicant is adequately regulated within the industry within which it operates and that it has formal mechanism within its structures that substantially performs the function that would otherwise be performed by a SEC[6];

24.2      secondly, on the premise that it is not reasonably necessary in the public interest to require the Applicant to have a SEC having regard to the nature and extent of the activities of the Applicant.[7]

[25] In paragraph 6.1 of the Supporting Affidavit, Ordel states that the Applicant subscribes to the 10 principles set out in the UN Global Compact.

[26] In terms of Regulation 43(5) of the Regulations, an SEC of a company should be appointed for purposes of serving functions which can be grouped into three categories:

26.1         To monitor the company’s activities, having regard to any relevant legislation, other legal requirements or prevailing codes of best practice with regard to matters relating to:-

26.1.1    Social and economic development, including the company’s standing in terms of the goals and purposes of: -

26.1.1.1      The 10 principles set out in the United Nations Global Company Principles;

26.1.1.2      The OECD recommendations regarding corruption (refer to the Organisation for Economic Co-operation and Development (OECD) website for further details (www.oecd. org));

26.1.1.3      The Employment Equity Act, No 55 of 1998; and

26.1.1.4      The Broad-Based Black Economic Empowerment Act, No 53 of 2003;

26.1.2    Good corporate citizenship, including the company’s:-

26.1.2.1      Promotion of equality, prevention of unfair discrimination and measures to address corruption;

26.1.2.2      Contribution to development of the communities in which its activities are predominantly conducted or within which its products or services are predominantly marketed; and

26.1.2.3      Record of sponsorship, donations and charitable giving;

26.1.3    The environment, health and public safety, including the impact of the company’s activities and of its products or services;

26.1.4    Consumer relationships, including the company’s policies and record relating to advertising, public relations and compliance with consumer protection laws; and

26.1.5    Labour and employment, including:-

26.1.5.1      The company’s standing in terms of the International Labour Organization Protocol on decent work and working conditions; and

26.1.5.2      The company’s employment relationships, and its contribution toward the educational development of its employees;

26.2         To draw matters within its mandate to the attention of the Board as occasion requires; and

26.3         To report, through one of its members, to the shareholders at the company’s annual general meeting on the matters within its mandate.

[27] As outlined in Regulation 43(5) of the Regulations, the role of the SEC is therefore in the main to look into compliance on social and ethics issues including triple bottom reporting, economic, social and environmental sustainability as provided for in the United Nations Global Reporting Initiatives, decent work, procurement, transformational goals, human rights, labour standards, anticorruption and all issues falling within its mandate. The SEC is therefore there for the main purpose of bringing these issues to the attention of the board and also report in the shareholders meeting if required.

[28] In my view, SECs are important not only to protect the communities and the environment where companies operate but for the protection of shareholders’ interests as well.  Any negative news relating to social and ethics have a serious economic impact for the company and the country in general.

[29] As we may all know, companies that are required to have SECs are public companies, state owned companies, companies that have in any two or previous five years scored above 500 points in terms of the Regulations.  I am therefore enjoined to consider the functions of the SEC as provided for in Regulation 43(5) of the Regulations when dealing with this current Application.

Exemption based on section 72(5)(a) of the Act (based on some form of formal mechanism within its structures that substantially performs the functions that would otherwise be performed by a Social and Ethics Committee)

[30] The Applicant is, as its main ground of bringing the current Application, applying for exemption from the requirement to appoint a SEC in terms of section 72(5)(a) of the Act.  Section 72(5)(a) provides that the Companies Tribunal may grant an exemption on the basis that the company is required in terms of other legislation to have, and does have, some form of formal mechanism within its structures that substantially performs the function that would otherwise be performed by a SEC in terms of section 72 of the Act read with Regulation 43 of the Regulations.

[31] The Applicant alleges that it does subscribe to the 10 Principles set out in the United Nations Global Compact.  The 10 Principles set out in the United Nations Global Compact as they apply to the Applicant can be summarized in the following manner:

31.1      In relation to the Principle of Human Rights, the Applicant’s business supports and respects the protection of internationally proclaimed human rights.  In this regard, the Applicant has a Committee known as Group Antolin Ethical Committee which deals with, amongst other things, Human Rights related matters in line with Grupo Antolin Code of Ethics and Conduct attached to the current application.

31.2      In relation to the Principle of Labour, the Applicant’s business upholds the freedom of association and the effective recognition of the right to collective bargaining in line with the Union Agreement attached to the current application.

In addition, the business eliminates all forms of forced and compulsory labour in line with MIBCO Main Agreement which is attached to the current application.

In addition, the business established and implements an effective abolition of child labour in line with anti-child labour policy which is attached to the current application.

In addition, the business established and implements a policy with regard elimination of discrimination in respect of employment and occupation. 

31.3      In relation to the principle of environment, the Applicant’s business supports a precautionary approach to environment challenges in line with its NOSA certificate, machinery, H&S Audits and monthly inspections.  Copies of the certificate and audits have been attached to the current application.

31.4      In relation to the principle of anti-corruption, the Applicant’s business works against corruption in all its forms, including extortion and bribery in line with its Anti-bribery policy which is attached to the current application.

[32] In addition the Applicant makes the following allegations which are relevant for purposes of the assessment of the current application:

32.1      The Applicant subscribes to good corporate citizenship and through its Employment Equity Committee monitors those goals set out in its Employment Equity Plan, including the promotion of equality, prevention of unfair discrimination and reduction of corruption.  A copy of the Employment Equity Plan of the Applicant has been attached to the current Application.  The Applicant currently has a total of 238 employees in its workforce.

32.2      The Applicant complies with the Broad-Based Black Economic Empowerment Act and through this contributes to development of its local community.  The Applicant strives to improve its rating in terms of the Broad-Based Black Economic Empowerment Act.

32.3      Regular donations are made by the Applicant locally and nationally to selected charitable organisations involved in the development of communities.

32.4      Departmental managers are afforded time during the Applicant’s weekly management meetings to raise any matters of concern regarding any ethical and social aspect concerning their specific department for discussion and resolution.  Contentious matters that are unresolved are referred to the Holding Company who operates a SEC in their own country.[8]

[33] The Holding Company of the Applicant is Grupo Antolin and it has established a SEC.  There is also a Code of Ethics and Conduct (“the Code of Ethics”) which is approved by the Ethics Committee and endorsed by the Board of Directors of Grupo Antolin.  A copy of the Code of Ethics is annexed to the current application.  

[34] In terms of the Code of Ethics, Grupo Antolin is making public its commitment to the guidelines in the Universal Declaration of Human Rights, the Guiding Principles on Business and Human Rights, Children’s Rights and Business Principles, as well as with the principles of the United Nations Global Compact and the guidelines and principles of the International Labor Organziation (ILO) and the Organization for Economic Co-operation and Development (OECD).  It is alleged that Grupo Antolin had been a founding partner of United Nations Global Compact in Spain since 2004.

[35] The Code of Ethics applies to all employees connected to Grupo Antolin, regardless of the employment contract that determines their relationship with the company, the position they occupy in the organization and the country in which they work.  Grupo Antolin extends its commitment to all subsidiary companies in which it is the majority shareholder or has management control, as well as to its supply chain.

[36] Those who violate the Code of Ethics or the policies and procedures of Group Antolin will be subject to disciplinary measures proportionate to the offense they committed and will be punished to the full extent allowed by the current regulations.  Disciplinary action will also be taken against anyone who orders or approves infringements or is aware of them and does not immediately act to remedy them.

[37] Members of Grupo Antolin are committed to universal values that govern the behaviour of the Group in all its activities throughout the world.  Based on the papers placed before me, the following are the universal values that Grupo Antolin subscribes to in terms of its Code of Ethics:

37.1      Human Rights:–

37.1.1   Grupo Antolin supports Fundamental Human Rights, avoiding and reporting any commercial, economic and industrial activities that abuse those rights.

37.1.2   Grupo Antolin acts with due diligence to identify, prevent, mitigate and remedy possible negative impact and consequences that its activities may have on human rights either directly or through its supply chain.

37.1.3   Grupo Antolin respects and promotes children’s rights within its sphere of influence.

37.2         Legislation:-

37.2.1   Grupo Antolin recognizes, respects and complies with the international, regional and national standards for behaviour, including the legislation on tax and town planning issues in the countries and territories where it operates; as well as their culture, customs and history.

37.2.2   Grupo Antolin is committed to preventing, detecting and eradicating any illegal actions carried out within the scope of its responsibilities, in its name or on its behalf and for its benefit, by any of its legal representatives, de facto or de jure administrators and employees.

37.3      Labour Standards:-

37.3.1   Grupo Antolin defends the freedom of association and the effective recognition of the right to collective bargaining on the part of its employees.

37.3.2   Grupo Antolin supports the elimination of all forms of forced and compulsory labour.

37.3.3   Grupo Antolin respects the current legislation on working hours in each country where it operates.

37.3.4   Grupo Antolin applies wage policies that are consistent with the local legislation, including respecting minimum wage conditions.

37.3.5   Grupo Antolin is in favour of the abolition of discriminatory practices in employment and occupation.

37.3.6   Grupo Antolin implements an occupational health safety management system.

37.4      The Environment:-

37.4.1   Grupo Antolin aspires to act in a way that minimizes the harmful impact on the environment of its industrial, commercial and economic operations.

37.4.2   Grupo Antolin encourages initiatives that promote greater environment responsibility.

37.4.3   Grupo Antolin promotes the development and dissemination of environmentally-friendly processes and technologies.

37.5      Diversity and equality:-

37.5.1   Grupo Antolin establishes and develops policies that include equality of treatment and opportunities between men and women without directly or indirectly discriminating on the basis of sex, race, colour, language, religion, opinion, origin, or any other personal and/or social condition or circumstance.

37.5.2   Grupo Antolin considers diversity in all policies regarding people management, treating it as a cross-cutting factor that is used as the foundation for all decisions taken in this area.

37.6      Data protection:-

Grupo Antolin bases its relationships with employees and ex-employees and their family members, as well as with candidates, customers, suppliers and other groups of people directly or indirectly related to the company, on the protection of confidential, secret and personal data.

37.7      Safety in operations:-

Grupo Antolin provides mechanisms that act across the entire organization and govern the environment of control and the information and communication systems, effectively eliminating the risks of errors with a material impact in the area of financial information.

37.8      Economic sustainability:-

Grupo Antolin is committed to protecting and maximizing the value of the investments made by shareholders, promoting the reasonableness of the return on these.

37.9      Anti-corruption:-

37.9.1   Grupo Antolin is committed to supporting international and local efforts to eliminate corruption and financial crime, always complying with the anti-money laundering laws that apply in any competent jurisdiction.

37.9.2   Grupo Antolin will not tolerate any type of corruption (that is accepting or offering money to obtain improper commercial gain), preparing organizational models to assess and ensure compliance with the Ethical Code where convenient or when the laws requires this.

37.9.3   Grupo Antolin operates its business without breaching the national or international laws relating to international trade, economic embraces and export controls that apply in the countries in which it operates.

37.9.4   Grupo Antolin defines a fiscal strategy and a policy for the control and management of risks, as well as the approval of investments and operations with special risk, based on compliance.

37.9.5   Grupo Antolin will facilitate the work of auditing or supervisory individuals, organizations and inspection bodies.

37.10    Sustainable contribution:-

Grupo Antolin contributes directly and indirectly, as a result of its business, products, technology and services, to the global and local development of the economy, society and the environment of the communities where it operates.

37.11    Information transparency:-

Grupo Antolin ensures, through its appropriate management and control bodies, that it provides a true representation through its information, paying special attention to the financial and economic information that reflects the company’s economic, financial and equity position in accordance with the generally accepted accounting principles.

37.12    Innovation:-

Grupo Antolin incorporates innovation into its daily activities throughout the entire value chain, promoting technological progress and positively contributing to the sustainable future of the car.

37.13    External relations:-

37.13.1 Grupo Antolin is committed to competing in the market vigorously to competing in the market vigorously and fairly, and will do so in full compliance with all the anti-trust laws in the different countries in which its commercial practice is carried out.

37.13.2 Grupo Antolin is committed to collaborating with people, groups of people, entities, associations and public and private organizations on research and development into innovation solutions for intelligent mobility that contributes to the ongoing development of society.

37.14    Non-funding of the political, governmental and terrorism spheres:-

37.14.1 Grupo Antolin strictly limits the use of the company’s resources with regards to supporting political causes or campaigns. 

37.14.2 Grupo Antolin respects the right of everyone providing their services in any of the businesses forming part of the company to be involved in political religious activities or in private non-profit initiatives, provided that they are carried out outside working hours and do not interfere with the professional development of their activity and that they are not carried out using the name, conditions or resources of the organization.

[38] I also had the benefit of perusing through the Main Agreement entered into between National Union of Metal Workers’ of South Africa and the Applicant which deals with Organisational Rights Granted to Trade Union Representatives within the Applicant’s workforce.

[39] I also had the benefit of perusing through the Motor Industry Bargaining Council – MIBCO Main Collective Agreement which deals with amongst other issues, the following, amongst its members:

39.1    Basic conditions of employment which are in line with the Basic Conditions of Employment Act, 1997 (Act No. 75 of 1997);

39.2    Safety standards and employment tools;

39.3    Dispute resolution mechanisms;

39.4    Retrenchment; and

39.5    Other general terms and conditions applicable to MIBCO members.

[40] In terms of Regulation 43(5)(b) of the Regulations, another function of the SEC of a company is to draw matters within its mandate to the attention of the Board as occasion requires it to do so.

[41] Based on the papers placed before me in support of the current application, Grupo Antolin has created an Ethics Committee that is entrusted with the task of ensuring the creation, updating and fulfilment of the Code of Ethics with the power to resolve ethics-related conflicts that arise in the Grupo Antolin group of companies.

[42] Grupo Antolin Ethics Committee is a collegiate deliberation body, of a consultative and interdisciplinary nature, created to analyse and provide advice on questions of an ethical nature which may arise in the working environment, with the ultimate aim of contributing to increasing respect for and compliance with the content of the Grupo Antolin Code of Ethics.

[43] The Grupo Antolin Ethics Committee is a body with autonomous initiative and control powers and the responsibility to develop, monitor and apply the Grupo Antolin model for organizing and managing criminal risks.

[44] The Grupo Antolin Ethics Committee is formed by a minimum of 3 and a maximum of 7 professionals who are internal or external to the company, experts in Corporate Responsibility and, labour, judicial and legal issues.  The appointment and dismissal of members of Grupo Ethics Committee is the responsibility of the Appointments and Remuneration Committee.

[45] Based on the information contained on the documents placed before me and which I perused during the assessment of this application, I do not have any reason to doubt that the Grupo Antolin Ethics Committee will, when required to do so, draw matters within its mandate to the attention of the Applicant’s Board as occasion requires it to do so.

[46] In terms of Regulation 43(5)(c) of the Regulations, it is another function of an SEC to report, through one of its members, to the shareholders at the company’s annual general meeting on the matters within its mandate.  Based on the information contained on the documents placed before me and which I perused during the assessment of the current application, I do not have any reason to doubt that the Grupo Antolin Ethics Committee will report to the shareholders at the company’s annual general meeting on the matter within its mandate as and when required to do so.

[47] As outlined above, Grupo Antolin has an Ethics Committee which is mandated to deal with the issues performed by the SEC in terms of section 72 of the Act and the Regulations.  Grupo Antolin is the Holding Company of the Applicant.  Based on the papers that were placed before me in support of the current application I am therefore of the firm view that the Applicant has some formal mechanism within its structures (the Grupo Antolin structures) that substantially performs the function that would otherwise be performed by the SEC in terms of section 72 of the Act and the Regulations.

[48] In my view, the Grupo Antolin and its subsidiaries will have to establish appropriate mechanisms which must deal with the manner which the Grupo Antolin Ethics Committee should perform its mandated functions in relation to its subsidiaries.  In particular, it must establish appropriate mechanism in relation to the manner in which the Grupo Antolin Ethics Committee will deal with the Applicant with regard to the functions which must be performed by an SEC as provided for in the Act and the Regulations.  The Applicant, the Applicant’s board of directors and Grupo Antolin Ethics Committee are best placed to deal with this issue.  I will therefore not express any further comments in relation to this issue.

[49] Be that as it may, after having considered what have been submitted on behalf of the Applicant as fully outlined above and having perused the papers placed before me in support of the current application, I am therefore satisfied that the Applicant had made out a good case qualifying it for an exemption from appointing a SEC in terms of section 72(5)(a) of the Act.  I therefore find that an exemption should be granted to the Applicant exempting it from appointing a SEC in terms of section 72(5)(a) of the Act.

Exemption based on section 72(5)(b) of the Act (based on public interest considerations)

[50] The current Application for exemption from the requirement to appoint a SEC is also brought in terms of section 72(5)(b) of the Act.  This section provides that an exemption may be granted on the basis that it is not reasonably necessary in the public interest for a company to appoint a SEC having regard to the nature and extent of the activities within the Applicant.

[51] I did peruse the Supporting Affidavit and could not find any allegation advanced and document placed before me in support of this base of the application.  This shortcoming will in any event not take matters any further considering my finding to grant an exemption to the Applicant from appointing a SEC in terms of section 72(5)(a) of the Act.

[52] I therefore make no finding with regard to the part of the current application for exemption by the Applicant on the basis that it is not reasonably in the public interest for the Applicant to appoint a SEC having regard to the nature and extent of the activities within the Applicant in the manner that is contemplated in section 72(5)(b) of the Act.

ORDER

[53] Based on the aforesaid, I am therefore making the following order:

53.1    the Application for an exemption from the requirement to appoint a Social and Ethics Committee is hereby granted in terms of section 72(5)(a) of the Act; and

53.2    the exemption granted in terms of 49.1 above is valid for a period of five (5) years from the date of this order.

_____________________________

LINDELANI DANIEL SIKHITHA

Member of the Companies Tribunal

06 February 2018

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