Shadow Directors

www.afristratpumpanddump.co.za

Charges Against Company History The Companies Act Due Dilligence
Shadow Directors Directors Duty Eune Engelbrecht Keith Rayner Terence Patrick Gregory Dirk Petrus Van Der Merwe Henk van der Merwe Bryan Shanahan George Manyere Anton Haye Tertius Johannes De Kock Floris Johannes Slabbert Brandon Rodney Topham
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Cases
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Ownership

The lack of morals feeds the seed of dishonesty....

There should be some standard that guards against creating the impression that there are two streams of justice; one for the rich and one for the poor, the company having deep pockets with investors having lost hard-earned life savings

Directors’ Duties in terms of the Common Law

The Companies Act, 2008 defines a director as:

“A member of the board of a company ...., or an alternate director of a company and includes any person occupying the position of director or alternate director, by whatever name designated”. The Companies Act, 2008 (the Act) contains a number of provisions that will directly impact all directors and the prescribed officers.

South African courts are of the view that callous criminals who act together to commit a crime ought to have foreseen the consequences in achieving their goal

“SHADOW DIRECTORS”

George Manyere is classified as a “Shadow Director” insofar as he does not hold office as a “Director” yet as a “Non-Executive Director”, therefor he is prescribed officer with majority shareholding with significant influence over the company “.

In holding all shadow directors severely and liable for the same duties as ordinary directors. George Manyere should have to account for the losses suffered by the company as he was directly instrumental with his significant influence over invested funds by investor’s to the company :- The invested funds of investors were used to benefit various companies and financial institutions associated directly to George Manyere and his direct family interests

“The Directors who committed the fraud will try to put the spotlight on the investors who invested within the company and their own conduct, knowledge, and motives. They will say that these “Offended Investors” had access to material information, and itself sought to score a huge profit despite known or knowable risks. The Directors may argue, the investors are seeking to blame someone else for the consequences of their own decisions.“

Non- Executive, the chief executive officer and chief financial officer are prescribed officers who have the responsibility to control and manage the whole or a significant part of the business, therefore they too have to comply with the same fiduciary duties as directors, duties to act in good faith, for a proper purpose and in the company’s best interests as defined by the act. However: -

Due to conflicting authorities and no clear court ruling on this issue, it’s unclear whether shadow directors are governed by the Companies Act. Shadow directors pose their own set of challenges as the South Africa’s Companies Act does not have a definition of a shadow director, and what the accountability structures are around them should be. They aren’t properly identified as directors, which means that they are able to escape legal responsibility for their influence and control.

Ironically, George Manyere chose the company because it ‘appealed to his sense of history and it appealed to what he wanted to achieve’. George Manyere attempts to describe his business methods as similar to that of Warren Buffet, one the world’s wealthiest individuals:

The exact same structure where he uses other people’s funds to acquire a private equity as in fact he did, without protecting the interest of investors.

Where fraud is committed by the company, a crime that cannot be rectified under the Companies Act, South African law should unambiguously recognise shadow directors, ensuring that the actions of persons having significant control over the company are also open to scrutiny, a criminal action should be brought against all those responsible, including those lurking in the shadows.