Section 8 of the Act reads 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, upon payment of an amount not exceeding the prescribed maximum fee for any such inspection. Section 26(5) gives a company 14 business days to comply with any request submitted in accordance with the Act. In addition s26(9) also makes it an offence for a company to fail to accommodate a reasonable request for access, or to unreasonably refuse access, to any record to which a person has a right to inspect. It is also an offence (s26(9)) to impede or interfere with any attempt at the reasonable exercise of these rights.
Until now it has also been disputed whether s26 of the Act confers an unqualified right of access to the securities register of a company. This has been put to bed in the Nova case in which a certain 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).
The crux of the matter revolves around the correct interpretation of s26 of the Act in light of the Companies’ argument that the right of access to the securities register is a qualified or limited right. The Companies argued for a discretion as to whether or not to permit access to its securities register, submitting that such access would constitute a breach of the listed members’ constitutional rights to privacy and dignity.
The court noted the significance of the disjunctive ‘or’, rather than the conjunctive ‘and’ used between s26(4)(b) which provides for the mechanism to gain access to a securities register in terms of the Act, and s24(4)(c) which permits access to a company’s register in terms of the provision of the Promotion of Access to Information Act, No 2 of 2000 (PAIA). The use of ‘and’ between the provisions would indicate that the methods can both be used, which further implies that one of the methods may not be sufficient on its own. While the use of ‘or’ clearly shows that it is one or the other, which patently implies that each method, in and of itself is sufficient to achieve the aim of accessing a company’s register.
The court also applied the trite legal axiom that the legislature is deemed to know the law, and in light of this must be accepted to have expressly altered the wording of the provision to indicate the unqualified right of access to the securities register. If the legislature intended for the right to be qualified, it would have drafted such accordingly.
The court dismissed the Companies’ constitutional argument that the right to privacy and dignity of the shareholders would be violated by an unqualified right to access of their securities register. An interference with the ability to access such information impedes the freedom of the press and the concomitant freedom of expression which is not limited to the right to speak but includes the right to receive information and ideas. The court held that the unqualified right of access to a company’s register is an essential component of effective journalism and an informed citizenry.
The court further stated that access to accurate information is crucial for the right to freedom of expression, and that the courts will not make an order which would amount to prior restraint on expression unless a very stringent list of criteria is met.
The meaning now ascribed and confirmed to s26(2) of the Act is that any member of the public may access the securities register and records listed in s26(2) of any company on application and payment of a fee, following which the company has 14 days to comply or else face the repercussions of contravening the provisions of the Companies Act.
Written by Andrew MacPherson and Corne Lewis