| (1) |
This regulation does not apply in respect of a pre-existing company contemplated in Item 6 (1) of Schedule 5. |
| (2) |
A pre-existing company may not authorise any new par value shares, or shares having a nominal value, on or after the effective date. |
| (3) |
If, immediately before the effective date, a pre-existing company has any authorised class of par value or nominal value shares from which it has not issued any shares before the effective date, or from which it has issued shares, all of which had been reacquired by the company before the effective date— |
| (a) |
the company must not issue any shares of that class on or after the effective date, until it has converted that class of shares in accordance with paragraph (b); and |
| (b) |
the board of the company may convert that class, or those classes, of authorised shares to shares having no nominal or par value, by adopting a board resolution to do so, and filing a notice of that resolution in Form CoR 31, without charge, at any time after the effective date. |
| (4) |
Sub-regulations (5) to (11) do not apply to a conversion contemplated in subregulation (3)(b). |
| (5) |
If, immediately before the effective date, a pre-existing company has any outstanding issued shares of one or more classes of par value or nominal value shares, the company— |
| (a) |
may not increase the number of those authorised shares; |
| (b) |
may issue further authorised shares of that class at any time on or after the effective date, until it has published a proposal in terms of sub-regulation (6) to convert that class of shares; and |
| (c) |
may file without charge an amendment to its Memorandum of Incorporation to effect a conversion of that class, or those classes, of shares, after adopting that amendment in accordance with sub-regulations (6) to (11). |
| (6) |
An amendment to a pre-existing company's Memorandum of Incorporation to effect a conversion of one or more classes of shares in terms of sub-regulation (5) may be proposed at any time by the company's board, and— |
| (a) |
must not be designed substantially or predominantly to evade the requirements of any applicable tax legislation; and |
| (b) |
will have been adopted only if it is approved by— |
| (i) |
a special resolution adopted by the holders of shares of each such class of shares; and |
| (ii) |
a further special resolution adopted by a meeting of the company's shareholders called for that purpose. |
| (7) |
The board must cause a report to be prepared in respect of a proposed resolution to convert any nominal or par value shares in terms of sub-regulation (6), which must at a minimum — |
| (a) |
state all information that may affect the value of the securities affected by the proposed conversion; |
| (b) |
identify the class of holders of the company's securities affected by the proposed conversion; |
| (c) |
describe the material effects that the proposed conversion will have on the rights of the holders of the company's securities affected by the proposed conversion, and |
| (d) |
any material adverse effects of the proposed arrangement against the compensation that any of those persons will receive in terms of the arrangement. |
(8) The company must—
| (a) |
publish a resolution contemplated in sub-regulation (6), together with the report required by sub-regulation (7), to the shareholders before the meeting at which the resolution will be considered, with at least as much notice as is required for a special resolution of that company's shareholders; and |
| (b) |
file a copy of the proposed resolution and report with the Commission and with the South African Revenue Service, at the same time that the proposal is published to the shareholders. |
| (9) |
At any time before a meeting called to consider a company's proposal contemplated in sub-regulation (6)— |
| (a) |
the company may, at the option of the company, apply to a court for a declaratory order that the proposal satisfies the requirements of the Act; |
| (b) |
a shareholder affected by the proposal, who believes that the proposal does not adequately protect their rights, or otherwise fails to satisfy the requirements of the Act, may apply to the court for an order; or |
| (c) |
the commission, or the South African Revenue Service, may apply to the court for a declaratory order contemplated in section 6 (1), on the grounds that the proposal contravenes sub-regulation (6) (a); |
and the court may make any order that is just and reasonable in the circumstances.
| (10) |
If an application is made to a court in terms of sub-regulation (9), the company may not put the proposed resolution to a vote until the court proceedings are completed and the time for any appeal or review of any court order has expired. |
| (11) |
If, after considering an application in terms of sub-regulation (9), the court declares that the proposed resolution— |
| (a) |
satisfies tile requirements of the Act— |
| (i) |
the company may put the proposal to a vote; and |
| (ii) |
the decision of the court does not restrict, limit or negate the right of any shareholder to vote against that resolution; or |
| (b) |
does not satisfy the requirements of the Act, the company must not proceed with a vote on the proposal, except to the extent that the court order provides otherwise. |
Special Investigating Units and Special Tribunals Act, 1996
