YOU might have missed it, but last week the supreme court of appeal (SCA) handed down one of the most crucial decisions regarding the public’s right to transparency from big companies in recent years. For years, Moneyweb journalist Julius Cobbett had been investigating the Sharemax groups and their controversial property syndication scheme.
Along the way, Cobbett launched what should have been a routine bid to get access to the share registers of three companies linked to Sharemax — Nova Property Group, Frontier Asset Management and Centro Property Group — using section 26(2) of the 2008 Companies Act. Naturally, Cobbett expected a prompt response.
After all, that section of the Companies Act says any person “has a right to inspect or copy” share registers of companies. Section 26(4) says companies that get such a request must respond within 14 business days. And section 26(9) makes it a criminal offence for companies to unreasonably refuse access.
Yet, the three Sharemax-linked companies refused. So Moneyweb went to court.
The companies then demanded certain documents from Moneyweb, claiming this would show that Moneyweb’s motives weren’t “journalistic”, but rather “sinister”. And this, they argued, would then mean they needn’t provide the share register.
Initially, the lower court had tentatively agreed in principle, ruling that the Companies Act doesn’t give an “unqualified right of access”, and the court itself retained that discretion.
This became the legal sticking point. After all, if the public has an unqualified right to access share registers, Moneyweb automatically wins because its motive becomes irrelevant.
For journalism, there was plenty at stake, which is why the amaBhungane Centre for Investigative Journalism successfully applied to be admitted as amicus curiae in the appeal. The SCA even allowed it to introduce evidence in the appeal, breaking new ground.
AmaBhungane recounted its first-hand experience, explaining to the court exactly why getting access to the share register is vital for a truly transparent democracy, where the media is able to hold people to account.
Finally last week, the SCA handed down a unanimous ruling which was great news for journalism, and a body blow for companies that don’t much fancy transparency.
The judgment, written by acting judge Fayeeza Kathree-Setiloane, held that section 26 of the Companies Act recognised that the establishment of a company is “not purely a private matter and may impact the public in several ways”.
This section of the Companies Act “conferred an unqualified right that is capable of prompt vindication”, the judges ruled. This takes it far further than even the Promotion of Access to Information Act (PAIA), where there are certain checks and balances built in when information is sought.
It was a sensible decision, given that “PAIA will not provide journalists prompt access to [share] registers — for whom timely access is essential”.
The judges ruled that the legislative history of section 26 revealed “a clear intention on the part of the legislature” to create an unqualified right, which was “essential for effective journalism and an informed citizenry”.
Any confusion around whether a company can ever refuse a request for its share register falls away. At least in this one narrow area of access to information, the media and the public’s right to know has triumphed over corporate secrecy.
And the bad news for companies that continue to defy these requests is that the impact of this judgment now makes it clear they must disclose this information or risk facing criminal sanction. It’s about time.
• Milo is a disputes partner at Webber Wentzel attorneys and a visiting associate professor at the University of the Witwatersrand. He acted for amaBhungane in the case.