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IN THE COMPANIES TRIBUNAL OF SOUTH AFRICA

 

Case No: CT00873ADJ2021

 

 

In the matter between:

 

Simiso Siboniso Mdletshe                                          APPLICANT

 

and

 

COMPANIES AND INTELLECTUAL PROPERTY

COMMISSION                                                               RESPONDENT

 

Presiding Member of the Companies Tribunal: ISHARA BODASING

 

Date of Decision: 26 January 2022

 

 

DECISION (Reasons and Order)

 

 

1.         INTRODUCTION

 

1.1.     Applicant is Simiso Siboniso Mdletshe, an adult male businessman and former director of Simisokuhle Trading, company duly incorporated in accordance with the company laws of South Africa, with registration number 2019/068019/07 (“the company”).

 

1.2.     Respondent is the Companies and Intellectual Property Commission (“CIPC”), a juristic person established in terms of section 185(1) of the Companies Act 71 of 2008 (“the Act”).

 

1.3.     On 24 November 2021, Applicant applied to the Companies Tribunal for an order modifying or cancelling the decision taken by CIPC on 8 October 2021 (“the decision”), not to investigate Applicant’s complaint that he was fraudulently removed as director of the company and replaced by another person.

 

1.4.     On 25 November 2021, the application was served electronically on CIPC. Respondent did not file opposing papers, so on 13 January 2022, Applicant applied for the matter to be considered on a default basis.

 

2.         BACKGROUND

 

2.1.       On 21 August 2021 Applicant lodged a complaint against the company with Respondent’s Corporate Governance, Surveillance and Enforcement Unit, alleging that he was unlawfully removed as director of the company and replaced by Ms Kwanele Fortunate Mthembu (“Ms Mthembu”).

 

2.2.     Applicant claimed that he was the sole director of the company, and that the appointment of Ms Mthembu occurred without his knowledge or consent, and that he never resigned as a director.

 

2.3          Respondent found that its records reflected otherwise, and that in light of Applicant’s failure to timely invoke the provisions of Regulation 168(6) of the Act, Respondent had effected the change of directorship in good faith.[1] Respondent decided not to investigate the matter further.

 

2.4          Respondent advised Applicant to open a criminal case with the South African Police Services, approach a court of law or this Tribunal for appropriate relief.

 

3.         Issues

 

The issue to be decided by this Tribunal is whether or not Respondent’s decision not to further investigate Applicant’s complaint ought to be modified or cancelled.

 

4.         Applicable law

 

 

4.1          Section 169 of the Act deals with an investigation by the CIPC, and its relevant provisions are:

 

(2)      At any time during an investigation, the Commission … may-

(a)      designate one or more persons to assist the inspector or investigator conducting the investigation; or

(b)      if a complaint concerns a dispute that is internal to a particular company, and does not appear to implicate a party other than the company, the holders of its securities, its directors, committees, prescribed officers, company secretary, or auditor-

(i) submit a proposal to the company seeking an agreement to jointly appoint an independent investigator-

(aa) at the expense of the company, or on a cost-shared basis; and (bb) to report to both the company, and to the Commission or Panel, as the case may be;

 

(3)      In conducting an investigation contemplated in this section an inspector or investigator may investigate any person-

(a)      named in the complaint, or related to a person named in the complaint; or

(b)      whom the inspector reasonably considers may have information relevant to the investigation of the complaint.

 

4.2          Section 185(2)(d) of the Act states that the Respondent:

 

(d)     must exercise the functions assigned to it in terms of this Act or any other law, or by the Minister, in-

(i)       the most cost-efficient and effective manner; and

(ii)      in accordance with the values and principles mentioned in section 195 of the Constitution.[2]

 

4.3          Section 186(1) of the Act describes Respondent’s objectives as:

 

(b)  the maintenance of accurate, up-to-date and relevant information concerning companies, …

 

(d) the promotion of compliance with this Act, and any other applicable legislation

 

4.4          Section 187 of the Act states that the Respondent’s functions include:

 

(c) receiving or initiating complaints concerning alleged contraventions of this Act, evaluating those complaints, and initiating investigations into complaints;

…

(e)  ensuring that contraventions of this Act are promptly and properly investigated;

…

(h)      referring alleged offences in terms of this Act to the National Prosecuting Authority;

(i)         referring matters to a court, and appearing before the court or the Companies Tribunal, as permitted or required by this Act.

 

4.5          Companies Regulation 168 deals with the filing of document, and requires:

 

(4) The recording officer of a regulatory agency––

(a) must take reasonable steps to––

(i)   confirm the identity of any person filing a document with that regulatory agency;

(ii) verify that the person filing a document on behalf of, or in relation to a juristic person, has the right to file that document in their own name, or is authorised to file the document on behalf of another person who has the right to file the document;

(iii) verify the authenticity of every document being filed; …

 

(6) A company may challenge any document filed with the Commission within 10 business days by filing a notice in Form CoR 168.

 

5.         Evaluation

 

5.1          It is clear from the CIPC records, that prior to 31 March 2021, Applicant was the sole director of the company. Applicant stated that he only became aware of the change in his status on 17 June 2021, when he was informed by First National Bank (FNB). Applicant supplemented his papers lodged with this Tribunal by including correspondence from his erstwhile attorney with FNB thereafter, which did not shed more light on the matter.

 

5.2          When Respondent was asked for copies of the supporting documents furnished to effect the CIPC records changes, the copies received by Applicant were barely legible. Applicant alleges that the signatures on the papers purporting to be his are forgeries.

 

5.3          Applicant then sought the assistance of Respondent. I have highlighted the relevant provision of the Act as they relate to CIPC when a complaint is lodged. The outcome of investigation report simply denies Applicant any further relief on the ground of the lapse of time, and that Respondent effected the change in good faith. In the face of the serious allegations made by Applicant, this response is flippant, to say the least.

 

5.4          The report does not indicate that the investigator:

 

i.      Contacted the current director,

ii.     Contacted Mr Mthembu, whom Applicant indicated was involved;[3]

iii.    Engaged directly with Applicant;[4]

iv.    Aimed to ensure respondent’s records were accurate;[5] or

v.     Referred the complaint to the National Prosecuting Authority.[6]

 

6.         Finding

 

Against the background of what is stated above I find that a more thorough investigation of Applicant’s complaint is required by the Respondent in terms of the Act.

 

7.         Order

 

7.1          The application for review of Respondent’s decision is upheld;

 

7.2          Respondent’s decision is reviewed and set aside or cancelled, thereby requiring Respondent to conduct a further investigation of Applicant’s complaint; and

 

7.3          The registrar of this Tribunal is requested to bring this order and the reasons therefor to the attention of Respondent.

 

 

ADV. ISHARA BODASING

 

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