The sticking point in the recent case of Matthew and Others v Africa Imaging (Pty) Ltd and Others (D6693/2024) [2026] ZAKZDHC 1 (13 January 2026) was the technical procedure to initiate the director removal. In this case, the composition of the board of directors of the company did not reflect the shareholder dynamics – with the minority (30%) shareholders having appointed the majority of the board members, leaving the majority (70%) shareholders attempting to effect a removal of a director with only minority representation on the board. The issue is that the procedure for the removal of a director under section 71(1) requires a shareholders’ meeting – which is, of course, ordinarily convened by the board.

In terms of section 61(3) of the Companies Act any shareholder holding 10% of the voting rights can demand a shareholders’ meeting (and the board is obliged to convene such meeting), but if the board is unresponsive (or commits to dragging its feet or running interference) there is no mechanism in the Companies Act for the requisitioning shareholder to convene a meeting directly itself. 

Under section 61(12), a requisitioning shareholder can go to court for an order to convene a shareholders’ meeting. This is arduous, and while the Companies Act in section 61(13) provides that the company itself must compensate such a shareholder for the costs of applying to court, this is cold comfort to such shareholder as their share value is proportionally affected when the company incurs such expenditure.

Finding

In Africa Imaging, the majority faction of shareholders issued a notice under section 61(3), and the board (under the control of the minority faction) did not formally resolve to convene a shareholders’ meeting for the removal of the director concerned. The minority of the board, however, called for a meeting, and at this purported shareholders’ meeting, the director was removed. The court in Africa Imaging found that although there was no board resolution convening the shareholders’ meeting, this was not fatal to the validity of the shareholder resolution removing the director passed at the meeting, because the board has no discretion in such circumstances anyway: when requisitioned by shareholders under section 61(3), the board acts as a functionary and must call a shareholders’ meeting.

The reasoning of the court in this regard is debatable, and in our view this case should not be seen as a licence for ignoring proper governance. Nowhere in the Companies Act does it state that governance and procedural matters are somehow relaxed merely because one is concerned with a section 61(3) demand by a shareholder. On the other hand, the argument may be that this is simply a case where non-compliance with a statute (the requirement to have the board convene a shareholders’ meeting by resolution) does not render the ensuing actions invalid if those have run to completion in the meantime. This is in line with general principles of common law in this regard, and perhaps also section 62(6) which deals with immaterial defects in the giving of a meeting notice.

The court also noted that, in terms of section 65(6), if a shareholders’ meeting is held, and the resolutions are passed at that meeting, a person cannot subsequently complain that there was insufficient or inadequate information in the notice. Such a challenge must be launched prior to the meeting – but once the meeting has been held it is too late.

Finally, when considering the decision to remove the director taken at the shareholders’ meeting, the court confirmed that the shareholders do not need to give reasons for removing a director – they can even act unreasonably and selfishly. 

Case law

However, as noted in our previous Alert there is the decision in the Western Cape High Court of Pretorius and Another v Timcke and Others (15479/14) [2015] ZAWCHC 215 (2 June 2015). In the Timcke case, the court held that shareholders must provide directors with reasons for their intended removal prior to the shareholders’ meeting at which the vote on their removal would be held.  

Notably, in Weir v Wiehahn Formwork Solutions (Pty) Ltd and Others [2025] (4) SA 637 (WCC), the Western Cape High Court found that the decision in Timcke was clearly wrong because (amongst other reasons) Timcke, did not consider the clear distinction between the section 71(1) requirements for removal by shareholders (without reasons) against the section 71(3) requirements for removal by fellow directors (with reasons).

The above being said, experience shows that the Companies and Intellectual Property Commission (CIPC) often cites Timcke, hence the continued need in practice for reasons to be given to the director, if only for the abundance of caution to ensure the administrative step of removal of their name as a director in the CIPC’s records.