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[2015] ZACT 61
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Ex parte: Unigrain (Pty) Ltd (CT006June2015) [2015] ZACT 61 (20 July 2015)
IN THE
COMPANIES
TRIBUNAL
OF
SOUTH AFRICA,
PRETORIA
CASE
NO:
CT006JUNE2015
In
the ex-parte application of
Unigrain
(Pty)
Ltd
Applicant
Coram:
Kganyago
M
.
F
And
Decision
handed down
on
the
20th
July
2015
DECISION
[1]
The
applicant
has
authorized
Gert
Der
Walt its
Managing Director
to
bring
an
application
in terms
of
section
72(5)
of
the
Companied Act
71
of 2008
("
the
Act"). The
applicant is
seeking
an
order
that
it
be
exempted
from
appointing
a
social
and ethics
committee
("SEC"
)
.
[2]
The
applicant
has stated the following
as the
basis of their
application:
2.1.
The
company
is a
privately
owned
entity with
only
2
(two)
shareholders,
one with
a
93%
interest
,
and one with
a
7%
int
erest;
2.2.
One shareholder
controls the
majority
interest of the company
by a
very
wide margin;
2.3.
The
company
has only
2
(two)
directors
(both being executive
directors).
2.4.
The
company
has
no
non-executive
directors
to
comply
with
the
minimum
of
3
(three)
directors
and
one being a non
executive
director.
2.5.
The
high
Pl-Score
of
the
entity
is
achieved
due to
the
high value
turnover
of
the
company.
The
company's
business
is
that of high turnover,
low
margin busi
n
I
ess.
The true
nature of the company
·
s
revenue
·
1s
gross
realized
.
However,
IFRS
accounting recognition
criteria requires
the
full
value
of
the
transaction
to be
included
when
recognizing
revenue.
2.6.
.
The
company
is
not
in a financial
position
to
appoint
and
remunerate
an non executive
director
purely for
purpose
of compliance
with
a
social and ethics committee.
2.7.
The
company
has a very
flat
management
structure
,
and the
responsibilities
of a
social
and
ethics
committee
are already
treated
at
board
l
evel
and
it
includes the
following:-
••
Social
and
economic
development
;
•• Good corporate
citizenship
;
••
The
environment
,
health and
public safet
y
;
••
Consumer relationship, and
••
Labour
and
development.
[3] In terms of section 72(5)(b) of the Act,
the Tribunal is required to grant an
exemption from appointing
an SEC if it is not reasonably necessary in
the public interest to require the company to have a social and
ethics committee, having
regard to the nature and extent of the
activities of the company.
[4]
Companies that are required
to
appoint
an
SEC
are state owned companies,
companies listed
on
the
JSE
and
any
company
which has
for
the
two
previous five years
scored
above
500
points in
terms
of
Regulation
26(2)
.
Regulation
26(2)
gives
a guideline
of
how
the
public
interest
score
should
be
calculated.
[5]
Regulation
43(2)
compels
a company which
is
covered by
this
regulation
,
to
appoint
an
SEC
unless
that
company is
a
subsid
i
ary
of
another
company that
has
an
SEC
that
will
perform
the
function
required
by
this
regulation
on
behalf
of
that
subsidiary
.
[6] The
applicant
has failed
to
show
that
they
have
met
these
requirements
or
falls
within the
category
of the
abovementioned
list of companies. In my view there are
deficiencies
in
the applicant's
application.
[7] In the
result
I
make
the following
order
:-
7.1
.
The applicant's
application
is refused.
_______________________________
M.F
MEMBER OF
THE
COMPANIES
TRIBUNAL