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Murray and Others NNO v African Global Holdings (Pty) Ltd and Others (306/2019) [2019] ZASCA 152

22nd November 2019

Click here to read the full judgment on Saflii

[1]   The events unfolding daily on our television screens at the hearings of the Zondo Commission[1] have given rise to the questions of company law arising in this appeal. They concern a group of companies  (the Group) of which the first respondent, Global Africa Holdings (Pty) Ltd (Holdings), is the holding company. The group was formerly known as the Bosasa Group. Evidence of a sensational nature was given to the Commission concerning the relationship between senior political figures and the Group. This prompted its bankers, First National Bank Ltd (FNB) and ABSA Bank Ltd (ABSA), to indicate that continuing a business relationship with the Group involved them in unacceptable reputational risk. Accordingly both banks indicated that they would withdraw banking facilities from African Global Operations (Pty) Ltd (Operations), itself a wholly-owned subsidiary of Holdings and the company that performed the Group’s treasury functions in regard to receipt of payments and payment of debts incurred by the various operating companies in the Group. All of the latter were wholly-owned subsidiaries of Operations.

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[2]     The Group then attempted to find another bank that would provide it with banking facilities, but was unable to do so. This was catastrophic for its continued business operations. Its chairman, Mr Gumede, who deposed to the founding affidavit, explained that while the subsidiaries had a number of ongoing contracts with government departments and state owned enterprises from which it could expect a steady cash flow, in the absence of banking facilities the various companies ‘would be unable to pay their  employees  (the  Group’s  employees  number  in  excess  of 4 500) and suppliers or to receive payment of amounts due to them’. This led the Group to consult with a leading business rescue practitioner, but nothing came of that because the practitioner was unable to assure it that he would be able to secure the banking facilities needed to enable the Group to continue in existence. 

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