What rights of access does a member of the public have to the securities register in terms of the Companies Act, 2008 (Companies Act)? The Supreme Court of Appeal (SCA) in its recent judgment in Nova Property Group Holdings v Cobbett (20815/2014) [2016] ZASCA 63 (12 May 2016) has provided welcome clarity on how far this access extends.
Section 8 of the Act states that a person who holds no beneficial interest has a right to inspect or copy the securities register of a profit company, or the members register of a non-profit company that has members, or the register of directors of a company, on paying a specified and limited fee.
The right requires the cooperation of the company itself. Section 26(5) gives a company 14 business days to comply with any request submitted in accordance with the Act. If a company to fails to accommodate a reasonable request for access, it is considered an offence. It is also an offence (s26(9)) to interfere with any attempt at the reasonable exercise of these rights.
Whether s26 of the Act confers an unqualified right of access to the securities register of a company has been a matter for debate. The Nova case, in which Mr Cobbett, an independent investigative journalist for Moneyweb, requested access to the security registers of Nova Property Group Holdings Limited, Frontier Asset Management & Investments Proprietary Limited, and Centro Property Group Proprietary Limited (Companies), has resolved the matter.
These companies resisted an application by Cobbett, a journalist, and Moneyweb to compel them to provide access to their securities registers, on the basis that such access may be refused on the grounds set out in the Promotion of Access to Information Act, 2000 (PAIA) and on the grounds of the “motive” of Moneyweb. The companies stated that they believed that Moneyweb was acting in the interests of furthering a “sinister agenda” and wished to undermine the companies’ integrity.
The court’s judgment was in favour of Moneyweb and Mr Cobbett. It held that section 26 makes it clear that the right of access conferred by section 26(2) is in addition to the rights conferred by PAIA and does not need to be exercised in accordance with PAIA. In addition to this, there is no requirement in section 26(2) that the request for access must be reasonable. The only mention of “reasonableness” is in section 26(9), which makes it an offence for a company to “fail to accommodate any reasonable request for access, or to unreasonably refuse access”.
It was concluded that section 26(2) clearly grants members of the public and the media the right to obtain access to a company’s securities register. Accordingly, the motive with which a person seeks such access is irrelevant. The court went on to state that this unqualified right is “essential for effective journalism and informed citizenry”.
In the light of four past conflicting judgments on the proper interpretation of section 26(2), this is a landmark decision in the public’s access to company information.