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IN THE COMPANIES TRIBUNAL
OF SOUTH AFRICA
Case Number: CT02581ADJ2026
In the matter between:
Gcobisa Silwana Applicant
and
Buyisiwe Khayalethu Ngqabavu Respondent
Presiding Tribunal Member: D Terblanche
Date of Decision: 24 April 2026
RULING – DE CISION AND REASONS
PARTIES
[1
] The Applicant is Gcobisa Silwana.
[2] The Respondent is Buyisiwe Khayalethu Ngqabavu.
[3] The parties are the only directors of Flow State Innovations (Pty) Ltd (“the Company”),
registered under registration number 2025/615631/07.
THE APPLICATION
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[4] The Applicant seeks an order removing the Respondent as a director of the Company
under section 71(8) of the Companies Act, 2008 (Act No. 71 of 2008) (“the Act”), read with
section 71(3)(b) of the Act. Relying on the allegations that the Respondent has neglected, or
been derelict in the performance of, the functions of a director, the Applicant submits that the
Respondent’s removal is necessary to resolve a governance deadlock and to enable the
Company to operate in a lawful and effective manner.
PROCEDURAL BACKGROUND
[5] On 30 January 2026, the Applicant submitted an application to the Companies Tribunal
(“the Tribunal”) on Form CTR142, seeking the removal of the Respondent as director. The
Tribunal date-stamped the application on 4 February 2026.
[6] The Applicant alleged that she served the application documents on the Respondent
electronically to the Respondent’s email address recorded in the Company’s MOI on 4
February 2026. The Applicant attached proof of service to her default order application.
[7] According to the Applicant, the Respondent has not filed any answering affidavit, nor has
any response been received from the Respondent in relation to the application. The Tribunal’s
records contain no notice of opposition or answering affidavit from the Respondent.
THE APPLICANT’S FACTUAL SUBMISSIONS
[8] The Applicant’s submissions are set out in the Applicant’s founding affidavit filed in
support of the application, together with:
(a) THE COMPANY’S MEMORANDUM OF INCORPORATION (FORM COR
15.1A), issued by the CIPC;
(b) THE REGISTRATION CERTIFICATE OF THE COMPANY (FORM COR
14.3) issued by the CIPC which reflect the details of the two directors ( i.e., the
Applicant and the Respondent) of the company, including the parties addresses;
(c) NOTICE OF INTENTION TO REMOVE A DIRECTOR (Issued I n terms of
section 71(3) Of The Companies Act 71 Of 2008). Date: 18 January 2026;
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(d) MINUTES OF A DIRECTORS’ MEETING HELD FOR THE PURPOSE OF
CONSIDERING THE REMOVAL OF A DIRECTOR. Date: 26 January 2026;
(e) RESOLUTION TO REMOVE A DIRECTOR (Adopted in terms of section 71 of
the Companies Act 71 of 2008);
(f) SHAREHOLDER RESOLUTION / STATEMENT OF SHARE ALLOCATION
STATUS; and
(g) PROVISIONAL SHARE REGISTER / STATEMENT.
[9] In July 2025, the Applicant and the Respondent agreed to register the Company for the
purpose of applying for funding under the SEDFA Township and Rural Entrepreneurs
Programme (TREP) to establish a laundromat under the Eazi Laundromat Franchise at
Eyabantu Mall, Zwelitsha. The Company was registered on 5 August 2025.
[10] From the inception of the Company, the Applicant assumed primary responsibility for
conceptualising, developing and advancing the business project. The Applicant independently
sourced funding requirements, prepared the business plan, compiled all supporting
documentation, and managed all communications with SEDFA, the franchisor and other
relevant stakeholders.
[11] Despite repeated invitations to contribute meaningfully, the Respondent limited his
involvement to signing documents where required. The Respondent provided no substantive
intellectual input, strategic direction or operational support. The Respondent’s participation
was sporadic and did not reflect the responsibilities ordinarily expected of a director.
[12] The pattern of non- participation continued during engagement with external
stakeholders. Although the Respondent attended three meetings with Novate Property
Investments and a virtual meeting with SEDFA on 21 November 2025, the Respondent did
not make substantive contributions. At a further meeting with SEDFA and the franchisor on
26 November 2025, the Respondent’s participation was intermittent and limited.
[13] On 17 December 2025, Novate Property Investments informed the Company that the
proposed premises were no longer available. The Applicant informed the Respondent and
proposed premises were no longer available. The Applicant informed the Respondent and
requested the Respondent’s input on identifying alternative premises or proposing alternative
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strategies. No proposals or meaningful assistance were forthcoming. The Applicant
independently approached the Eastern Cape Development Corporation (ECDC) to explore
alternative premises, and when none were available, the Applicant informed the Respondent
accordingly.
[14] On 11 January 2026, the Applicant requested a meeting to discuss the future of the
Company. A telephonic meeting scheduled for 12 January 2026 was postponed at the
Respondent’s request. On 13 January 2026, a virtual meeting with SEDFA was held, but the
Respondent did not attend. When the Applicant subsequently invited the Respondent to
propose alternative business initiatives, the Respondent indicated that he had none.
[15] In light of the Respondent’s continued non- participation, the Applicant requested that
the Respondent consider resigning as director to avoid ongoing operational paralysis. The
Respondent initially agreed, and the Applicant initiated the CIPC resignation process.
However, on 17 January 2026, the Respondent informed the Applicant that he had changed
his mind and would not resign.
[16] The Respondent refused to cooperate with efforts to regularise the Company’s
governance and advised that the Applicant should instead register a new company.
[17] On 18 January 2026, the Applicant issued a formal notice of intention to remove the
Respondent as director and invited him to make representations at a meeting scheduled for 26
January 2026. The Respondent declined to attend the meeting and refused to step down.
[18] As a result of the Respondent’s refusal to resign and his persistent lack of participation
in the affairs of the Company, a governance deadlock has arisen. The Company is unable to
function effectively, pursue funding opportunities or conduct business in an orderly manner.
The Respondent’s conduct has effectively constrained the Company’s ability to move
forward with viable projects and has placed the Company at a standstill.
forward with viable projects and has placed the Company at a standstill.
[19] The Applicant further notes that no formal share allocation has ever been concluded, no
share certificates have ever been issued, and no shareholders’ agreement exists, which has
further complicated efforts to resolve the current dispute.
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[20] The Applicant submits that the Respondent’s conduct demonstrates an inability or
unwillingness to fulfil the duties of a director. The Applicant accordingly requests the
Tribunal to grant appropriate relief to resolve the deadlock and enable the Company to
operate in a lawful and effective manner.
ANALYSIS AND ASSESSMENT
Jurisdiction
[21] The application is properly brought under section 71(8) of the Act, which provides that a
director or shareholder of a company with fewer than three directors may apply directly to the
Companies Tribunal for an order to remove a director. The Company has only two directors,
as is evident from the CIPC records, namely the Applicant and the Respondent. The Tribunal
accordingly has jurisdiction to hear this matter.
Default Application
[22] Companies Regulation 153 of 2011 provides for default orders:
“(1) If a person served with an initiating document has not filed a response within the
prescribed period, the initiating party may apply to have the order, as applied for, issued
against that person by the Tribunal.
(2) On an application in terms of subregulation (1), the Tribunal may make an
appropriate order – (a) … (b) if it is satisfied that the notice or application was
adequately served.”
[23] Table CR3 in the Companies Regulations provides that insofar as delivery of documents
by electronic mail is concerned, sending the notice or copy of the document by electronic
mail is a valid method of delivery if the person has an address for receiving electronic mail.
[24] The Applicant attached proof of service of the main application and accompanying
documents. According to the Applicant, the Respondent has not filed any opposing papers.
There is no record of a notice of opposition or answering affidavit on file with the Tribunal.
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The Tribunal has considered the proof of service and is satisfied that the application and
accompanying documents were served on the Respondent.
Assessment of Service
[25] Having regard to the uncontroverted proof of service done electronically, in accordance
with the Companies Regulations 2011, to the Respondent’s email address recorded in the
Company’s MOI, the Tribunal finds that the application was adequately served on the
Respondent. The Respondent has not filed any response within the prescribed period. The
Applicant is therefore entitled to apply for a default order in terms of Regulation 153.
Substantive Grounds for Removal
[26] Once jurisdiction is established and the procedural requirements are met, the Applicant
must prove the substantive grounds for removal. The Tribunal must therefore examine the
Applicant’s founding affidavit to determine whether a proper case for removal has been made
out. The applicable provision is section 71(3)(b) of the Act, which provides that a director
may be removed if that director “ has neglected, or been derelict in the performance of, the
functions of director.”
[27] The Act does not provide an exhaustive list of what constitutes neglect or dereliction,
leaving it to the Tribunal to determine on a case-by-case basis.
[28] The Tribunal has defined the terms ‘neglect’ and ‘dereliction’ in earlier decisions.
In Spineco Medical International (Pty) Ltd & Another v Webb (Companies Tribunal, Case
Number: CT021NOV2014, 11 August 2015) (Spineco), the Tribunal defined ‘dereliction’ as:
“desertion or abandonment and, consequently, the involved conduct has a connotation
of being deliberate, purposeful or even intentional about it, and … dereliction … would
require something more than negligence, at least as recklessness or even intent.”
[29] The decision of Spineco (or some of the dicta therein) appears relevant and persuasive
for the issues to be determined in this matter, including the following passage:
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“…[in] the context of section 71(3)(b) a director would be neglecting to perform his or
her functions as a director of a company if he or she had given insufficient attention to
his or her actions. Therefore, when regard is had to the standards of directors’ duties
and fiduciary duties of directors, the particular director would have failed to adhere to
the standards legally required of him, when a reasonable person under the same
circumstances would have acted to the contrary.” (See Spineco at para [57].)
[30] That a director, the Respondent in this instance, has failed the requirements of section
71(3)(b) of the Act, has to be proved on a balance of probabilities, even when an application
is considered by default.
[31] I n Mtshali v Lefutso (CT00482ADJ2020) [2020] COMPTRI 9 (17 December 2020)
(Mtshali) the Tribunal held that an application alleging neglect or dereliction:
“ought to establish (on the basis of specific acts or omissions in the respondent’s
conduct relating to the business or affairs of the company) that the impugned director
has neglected or has been in derelict of his or her functions as a director, as envisaged
by section 71(3)(b) of the Companies Act, for example, by the director’s
non-performance or defective performance of tasks or functions allocated or expected
from him or her.”
[32] Where in Mtshali the removal of the director was based on two sentences, “[I] request to
remove Tshepo Lefutso as director as I am unable to get hold of him” and “I [have] last seen
him on the 16 March 2020 [after] I tried looking for him to no avail” (See para 4) , the
Tribunal held that “ mere allegations of physical absence from the company … or
inaccessibility … without more, does not suffice.”
[33] The Applicant’s grounds for seeking the Respondent’s removal are that the Respondent:
(a) has neglected and is derelict in his director’s duties under section 71(3)(b);
(a) has neglected and is derelict in his director’s duties under section 71(3)(b);
(b) has persistently failed to participate meaningfully in the Company’s affairs; and
(c) has refused to resign, causing a governance deadlock that paralyzes the Company.
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[34] The Applicant’s founding affidavit alleges specific conduct on the part of the
Respondent:
(a) The Respondent missed two key meetings on 12 and 13 January 2026, including a
virtual meeting with SEDFA.
(b) When he did attend meetings, he made no substantive contribution.
(c) He provided no strategic, business or operational input.
(d) He limited his involvement to signing documents only.
(e) After initially agreeing to resign, he reversed his decision and refused to step
down.
(f) He declined to attend the formal removal meeting on 26 January 2026 and failed
to make any representations.
[35] These are not vague allegations of inaccessibility or mere conclusions. They are specific
acts or omissions of the kind the Tribunal in Mtshali requires. The Applicant’s sworn
affidavit serves as evidence unless contradicted. Since the Respondent has not filed any
opposing papers, there is no evidence before the Tribunal contradicting the Applicant’s
version of events.
[36] The Tribunal has already held that similar conduct constitutes neglect or dereliction
within the meaning of section 71(3)(b). In Bishop v Bishop (CT01037/ADJ/2022) [2022]
COMPTRI 61 (25 August 2022) (Bishop), the Tribunal determined that the Respondent had
failed to perform his directorial responsibilities, including relocating to Dubai without notice
and ceasing to participate in company operations, thereby posing a financial risk.
[37] In Shirinda v Shirinda (CT00654ADJ2021) [2021] COMPTRI 32 (31 May 2021)
(Shirinda), the Tribunal granted an unopposed application for removal where the respondent
was alleged to have neglected to fulfil his role and perform his duties as a director, thus
hindering the conduct of the business of the company.
[38] The Respondent’s conduct in the present matter closely mirrors the factual matrices of
both Bishop and Shirinda. Like the respondent in Bishop, the Respondent here has not
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partaken in the substantive operations of the Company, leaving the Applicant to carry all
strategic and operational burdens alone. Like the respondent in Shirinda, his failure to
perform his duties has hindered the conduct of the Company’s business.
[39] The deliberate nature of the Respondent’s conduct is demonstrated by his initial
agreement to resign, followed by his decision to reverse that agreement and refuse to step
down. This conduct constitutes the “deliberate, purposeful or even intentional” conduct
required for dereliction, as defined in Spineco. His refusal to attend the formal removal
meeting or make any representations confirms his abandonment of director duties.
Prejudice to the Company
[40] The Applicant has established that the Respondent’s conduct has resulted in actual
prejudice to the Company. The Company is unable to function effectively, pursue funding
opportunities or conduct business in an orderly manner. The Respondent’s continued
presence as an inactive director has placed the Company at a standstill, preventing it from
progressing with viable projects.
Shareholding Position
[41] The Applicant notes that no formal share allocation has ever been concluded, no share
certificates have ever been issued, and no shareholders’ agreement exists. While this is not
itself a ground for removal, it reinforces why Tribunal intervention is necessary: there is no
alternative mechanism within the Company’s governance structures to resolve the deadlock.
FINDINGS
[42] The Applicant’s founding affidavit contains specific, dated and detailed allegations of
the Respondent’s conduct. These allegations go well beyond the “ mere allegations” found
insufficient in Mtshali.
[43] The Respondent has missed two key meetings – on 12 and 13 January 2026 – and has
attended other meetings without making substantive contribution. He has provided no
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strategic, business or operational input, limiting his involvement to signing documents only.
After initially agreeing to resign, he reversed his decision and refused to step down. He
declined to attend the formal removal meeting scheduled for 26 January 2026 and failed to
make any representations.
[44] This pattern of conduct demonstrates:
(a) Non-performance of director functions, as evidenced by the Respondent’s failure
to attend scheduled meetings without justification (falling within the definition of
neglect);
(b) Defective performance of director functions, as evidenced by his attendance at
meetings without substantive contribution; and
(c) Dereliction (desertion or abandonment of director responsibilities), as evidenced
by his deliberate reversal of his agreement to resign, his refusal to attend the
removal meeting, and his failure to make any representations.
[45] The Respondent’s conduct has caused a governance deadlock that has paralysed the
Company’s operations. The Company is unable to pursue funding opportunities or conduct
business in an orderly manner.
[46] The Tribunal accordingly finds that the Applicant has made out a proper case for the
removal of the Respondent as a director of the Company under section 71(8), read with
section 71(3)(b), of the Companies Act, 2008.
ORDER
[47] The Tribunal issues this order:
(a) Buyisiwe Khayalethu Ngqabavu is removed as a director of Flow State
Innovations (Pty) Ltd (Registration Number: 2025/615631/07), effective
immediately; and
(b) No costs order is made.
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DATED ON 24th OF APRIL 2026.
D Terblanche
TRIBUNAL MEMBER