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Companies Act, 1973 (Act No. 61 of 1973)

Chapter VIII: Directors

Disqualifications of Directors

219. Disqualification of directors, officers and others by the Court

 

 

1) The Court may make an order directing that, for such period as may be specified in the order, a person, director or officer shall not without the leave of the Court be a director of or in any way, whether directly or indirectly, be concerned or take part in the management of any company when-
a) such person, director or officer, has been convicted of an offence in connection with the promotion, formation or management of a company; or
b) the Court has made an order for the winding-up of a company and the Master has made a report under this Act stating that in his opinion a fraud has been committed--
i) by such person in connection with the promotion or formation of the company; or
ii) by any director or officer of the company in relation to the company since its formation; or
c) in the course of the winding-up or judicial management of a company it appears that any such person-
i) has been guilty of an offence referred to in section 424, whether or not he has been convicted of that offence; or
ii) has otherwise been guilty while an officer of the company of any fraud in relation to the company or of any breach of his duty to the company; or
d) a declaration has been made in respect of any person under section 424(1).

 

2)
a) An order under subsection (1) may be made-
i) by the Court having jurisdiction to wind up the company affected by the act or omission in respect of which the order is sought, on application by the Master or, in the case of a company being wound up or under judicial management, by the Director of Public Prosecutions in terms of section 401, or by the liquidator or the judicial manager or by any person who is a creditor or is or has been a member of such company; or
ii) in the case of an order in the circumstances set out in paragraph (a) of that subsection, also summarily by the Court convicting the person concerned, and any leave required under that subsection may be granted by the Court having jurisdiction to wind up the company in relation to which such leave is sought.
b) The applicant for any such order shall give not less than ten days' notice of his intention to apply for the order, to the person against whom the order is sought and such person may attend the hearing of the application and give evidence and call witnesses to give evidence on his behalf.

 

3) Where an order under subsection (1) has been made, the person to whom the order relates shall give not less than ten days' notice to the Master, the Director of Public Prosecutions, the liquidator or the person who was the judicial manager of the company concerned, of any application he intends making for leave of the Court referred to in subsection (1), who shall draw the attention of the Court to any matter which may appear to them to be relevant, may give evidence and call witnesses.

 

4)
a) For the purposes of subsection (1) (b) (ii) the reference therein to an officer of a company shall be construed as including a reference to any person in accordance with whose directions or instructions the directors of the company have been accustomed to act.
b) An order may be made under the said subsection (1) (b) (ii) whether or not criminal proceedings have been instituted in respect of any matter on which the order is based.

 

4A)

a) The Registrar of the Court which made an order under subsection (1) shall, within seven days after the making of the order, transmit a copy of the order to the Registrar, who must notify each company which has as a director the person to whom the order relates, of the order.
b) A company notified in terms of paragraph (a ) shall, within a period of 60 days from notification, inform its shareholders in writing of such notification.
c) The Registrar shall establish and maintain a register of the orders made under paragraph (a) and the names of the persons to whom the orders relate, and such register shall be open to inspection mutatis mutandis as if it were a register contemplated in section 113.
d) The Registrar shall remove a person’s name from the register-
i) if an appeal against an order contemplated in subsection (1) is successful; or
ii) where a court has granted leave as contemplated in subsection (1).

 

5) Any person who contravenes any order made under subsection (1), or any director or officer of the company in question who knew or who could reasonably be expected to know of the contravention-
a) shall be guilty of an offence;
b) shall be liable, jointly and severally, for all debts incurred by the company for the period during which such person knew or could reasonably be expected to know of the contravention.