Recent Developments In Shareholder Protection

In any commercial enterprise with multiple shareholders, disputes are bound to arise. Such disputes may result in the interests of some shareholders being unfairly prejudiced. Section 163 of the Companies Act 71 of 2008 (the "Act") plays a critical role in safeguarding the interests of shareholders against such prejudice.

Section 163(1), otherwise known as the 'oppression remedy', states that:

'A shareholder or a director of a company may apply to a court for relief if-

1. any act or omission of the company, or a related person, has had a result that is oppressive or unfairly prejudicial to, or that unfairly disregards the interests of, the applicant;
2. any act or omission of the company, or a related person, has had a result that is oppressive or unfairly prejudicial to, or that unfairly disregards the interests of, the applicant;