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Bosasa’s request to overturn liquidation granted

The directors of African Global Holdings, formerly know as Bosasa, argued that they were ill-advised and did not properly read the documentation before signing off on it.

A general view of the African Global Group offices in Krugersdorp. Picture: Kgomotso Modise/EWN

JOHANNESBURG - The High Court in Johannesburg has ordered that Bosasa’s decision to voluntarily liquidate the company is reviewed and set aside.

The directors of African Global Holdings, formerly know as Bosasa, argued that they were ill-advised and did not properly read the documentation before signing off on it.

It also argued that the meeting at which the decision was taken was not properly constituted as set out in the Companies Act.

The decision to liquidate was taken in February after the company's bank's announced they would close their accounts - citing reputational risk.

The High Court in Johannesburg has given the liquidators 12 hours to hand over the control of African Global Operations back to its directors.

The judge did not read out the reasons for his decision, but they have been contained in a written judgment distributed to the parties’ attorneys.

The High Court in has reversed Bosasa’s voluntary liquidation because the meeting at which the decision was taken was not properly convened as required by law.

Judge Joolan Ameer found that African Global Operation’s directors committed a self-inflicted error of judgment brought about by the pressure of imminently having banks close their accounts.

He accepted the evidence that no proper board meeting was held in terms of the Companies Act.

The court found there was no compliance with the mandatory requirements as set out in legislation in relation to the notice periods for such a meeting, no notice of the meeting was given prior to the resolution nor was a copy of the resolution circulated in advance.

Ameer was critical of the liquidators, saying they dealt with peripheral issues but avoided dealing with the core factual issues related to the lawfulness of the meeting.

While the company has scored a legal victory, it remains unclear how it will continue to function after being rejected by its banks.

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