A recent court ruling has closed a door for disgruntled Steinhoff shareholders.
The court’s decision prevents a Steinhoff shareholder from launching a class action intended to get compensation for the losses suffered by thousands of individual investors as a result of the R185 billion collapse in value of the group’s shares in late 2017 and early 2018.
The court’s ruling is being hailed as a victory by the 42 respondents – including Steinhoff, its directors, auditors and financial advisors – but is likely to incur the wrath of parliamentarians who have been tracking Steinhoff-related developments since early 2018.
“A class action, however, would secure access to the courts and the prospect of redress for thousands of individual shareholders who lack the resources of institutional investors,” said Unterhalter on page six of his 100-page ruling. It is explained in Henochsberg on the Companies Act 71 of 2008 that the Foss v Harbottle rule is the consequence of the fact that the corporation is a separate legal entity; other consequences are limited liability and limited rights: “The company is liable for its contracts and torts, the shareholder has no such liability,” states Henochsberg.
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