Corporate Scandals Of South Africa

2261 Words Mar 22nd, 2016 10 Pages
Chapter 1
1.1 Introduction
Previously common law was used to describe, set standards and lay down the requirements for director conduct and concomitant liability that could be incurred in event of a breach of duty. Over the years, various statutes or Acts of Parliament had been promulgated, which supplemented and added requirements to the common law, particularly to the responsibilities of directors.
Any director who acted outside the ambit of the law and the company’s constitution was accordingly answerable to the company for his conduct. These laws as they stood, judging by recent corporate scandals in South Africa, have proved to be ineffective since it is the companies themselves, and thus the stakeholder’s, who are fined and the directors carry minimal, if any liability. Some of these corporate scandals include several price fixing scandals of large corporations in South Africa such as the case of S v Brown (CC 50/2010) [2013] ZAWCHC 211 where the defendant was fined with a mere R150 000 after costing countless pensioners their life savings.
In response to these scandals and in an attempt to hold directors more accountable there has been a number of pieces of legislation intended to place more onerous duties, obligations and restrictions on directors. Many of these Acts such as the National Environmental Management: Air Quality Act 34 of 2004 , National Water Act 36 of 1998 and National Environmental Management Act 107 of 1998 have placed a personal liability on…
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