The North Gauteng High Court’s recent dismissal of attempts by African Bank’s BEE shareholders to proceed with legal action against the bank’s former CEO, Leon Kirkinis, his fellow board members and Deloitte is grim news for any Steinhoff shareholders wanting to hold the retail group’s directors and auditors to account. The court has confirmed that in SA law shareholders cannot sue for what’s referred to as "reflective" losses. "A loss claimed by a shareholder as a result of a wrong done to the company is merely a reflection of the loss suffered by the company," says the court. In law the shares are merely a right of participation in the company on the terms set down by the memorandum of incorporation. As far as the court is concerned, while the value of the shares has been reduced significantly the shareholders still hold all the shares. This may seem like nitpicking legalese to shareholders whose retirement plans have suffered a hefty setback but, as the court pointed out, the ina...

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