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Ex parte P. Trimborn Agency CC (CT20OCT2015) [2015] ZANCT 43 (24 November 2015)

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IN THE COMPANIES TRIBUNAL OF THE REPUBLIC OF SOUTH AFRICA

(“The Tribunal”)

CASE NO: CT20OCT2015

In Re: In an Application in terms of Section 72

(5) of the Companies Act 71 of 2008 (“the Act”)

for an exemption to appoint a Social and Ethics

Committee (SEC) for the Applicant, in terms

of Regulation 43.

In an Ex parte Application  for exemption by:

P.TRIMBORN AGENCY CC

(1988/000111/23)                                                                                            THE APPLICANT



Coram K. Tootla

Decision delivered on 24 November 2015

DECISION

INTRODUCTION:

[1] The applicant  applies to the Companies Tribunal  presumably  in terms of sections 72 (5) and presumably 72 (6) of the Companies Act 71 of 2008 (“Act”) and presumably the regulations in terms of the Companies Act (GNR 351 of 265 April 2011) (“regulation/s”) for an exemption from appointing a Social and Ethics Committee (“SEC”) for a Close Corporation.

BACKGROUND:

[2] It is to be noted that no sections of the Companies  Act or the Close Corporations Act are mentioned  in terms of which this Application  is made.

[3] The Applicant states that it is required to appoint a SEC due to its public interest score being 1185 points. However, the Applicant has not indicated in terms of which section and regulation it has calculated its public  interest score (“PIS”)  nor why it is expected to appoint an SEC in terms of the Companies Act.

EVALUATION:

[4] Note firstly that Regulation 142 (3) (a) provides, as far as it is relevant, that “An application in terms of this regulation must indicate the basis of the application, stating the section of the Act or these regulations  in terms of which the Application is made.

[5] Secondly,  in accordance with the definition  of “Company”  in Section I of the Act, a close corporation is a juristic person which is recognized as a company, only if it has subsequently been converted to a company in terms of Schedule 2 as set out in terms of Section 1 (a)(ii) of the Act, which means that if that juristic person such as the Applicant is currently a Close Corporation, then the relevant Section 72 (5) in respect of an appointment  of a social and ethics committee  does not apply to a Close Corporation.

[6] Despite the fact that the Applicant has a public score exceeding 500 points, it is not recognized as a company in the Companies Act and hence it cannot be expected to appoint a Social and Ethics Committee  (SEC) as set out in Section 72(5).

APPLICABLE  LAW (relevant):

[7] The Companies Act 71 of 2008 provides as follows  in section 72:

(5)   A company that falls  within a category of companies  that are required in terms of this section and the regulations to appoint a social and ethics committee may apply to the Tribunal in the prescribed manner and form for an exemption from that requirement, and the Tribunal may grant such an exemption if it is satisfied that— …

[8] The regulations  in terms of the Companies Act provide in Reg 43(2) that a SEC must be appointed by:

•              State owned companies;

•              listed public companies;

•              Any other company with a Public  Interest  Score above 500 in any two of the previous five (financial)  years.

[9] If a company is required to appoint a SEC, it can apply for a ruling by the Tribunal for an exemption, under the provisions of section 72 (5) of the Companies Act. Applicatio n for a ruling must be made in form CTR 142; together with a supporting affidavit setting out the facts on which the application is based (Reg 142 (3)).

FINDING:

[10]  Since a the Applicant  as a Close Corporation is not a company in terms of Section 1 of the Act, nor does it fall within any of the categories above, it not subject to Section 72

(5) nor Reg 43 (5).

[11] This however does not mean that the CC is not obliged to comply  with all the laws which they are bound by in Law; but it means that they do not require a mechanis m such as a social and ethics committee  to monitor compliance  of these laws.

ORDER:

[12] The application  for an exemption  in respect of the appointment  of a SEC is hereby dismissed.

 

k.y. tootla (electronically signed)

 

_______________________

KHATIJA TOOTLA

Member of the Companies Tribunal

24 November 2015