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South Africa: Corporate Law Update for January 2024 published

1 February 2024
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Our South African bi-annual Corporate Law Update for January 2024 has been published (here). It covers general trends, regulatory developments and material case law since our last publication.

Mirroring global deal making, M&A in South Africa is down, private equity remains active, equity capital markets are hopeful amid signs of shifting times, and formal restructurings and insolvencies remain a reality. From a deal making perspective, parties are scrutinising deals more closely, are not as willing to take on risk, and are generally more restrained in closing. Robust early-stage M&A activity is however indicating an uptick in deal volume. Examples of active sectors include energy, logistics, construction, healthcare, mining, financial services, consumer goods, TMT and education.

Shareholder activism, ESG, energy and major incident considerations remain front of mind as do public interest and competition/ antitrust developments, employment equity and retirement legislation and the South African Revenue Services’ compliance and collection drive.

It is anticipated that the proposed amendments to the Companies Act will be enacted early this year. To this end:

  • Public and state-owned companies should be preparing for the structuring of binding remuneration policies, alignment of remuneration reporting and pay gap disclosures and new social and ethics committee requirements;
  • Private companies with 10 or more direct or indirect shareholders that are contemplating an affected transaction should be readying themselves for the potential of additional regulatory scrutiny by the Takeover Regulation Panel;
  • All companies should be giving thought to the alternative dispute resolution mechanisms that they have agreed to in their corporate documents and whether or not these are still appropriate considering proposed amendments; and
  • Corporates should be mindful of the fact that their annual financial statements and any disclosures included in their financials, director and officer remuneration or otherwise, will soon become public information.

For listed companies, there have been an unprecedented number of changes to the listing requirements as the Johannesburg Stock Exchange undertakes various initiatives to simplify and cut red-tape.