Personal liability
ALLAN GREENBLO: Here's how the Companies Act can bring SOE directors to book
Nail one set of directors for personal liability to see how quickly other directors of mismanaged state-owned enterprises will fall into line
The 2008 Companies Act is a fine piece of legislation. Importantly among its numerous objectives, it seeks to protect shareholders and creditors from abuse by directors. More than this, it gives legal force to key aspects of the voluntary King code on corporate governance. The act has much to say about fiduciary responsibilities and reckless trading. It also provides for circumstances where a director can be declared delinquent. And it prescribes penalties, inclusive of personal liability. Nail one set of directors for personal liability to see how quickly other directors of mismanaged state-owned enterprises (SOEs) will fall into line. Circumstances at Eskom, recently exposed, make it an ideal vehicle to begin the test for SAA and Transnet also to heed. Because Eskom is a company, the act applies to it. As Eskom’s sole shareholder, the state on behalf of Eskom’s funders — being the public at large as electricity consumers vulnerable to tariff hikes and through financial institution...
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