Section 26(2) of the Companies Act No. 71 of 2008 (“Companies Act”) provides the general public with a limited right of access to a company’s records. This section in particular allows persons who do not have a beneficial interest in a company to inspect or copy the securities register of the company upon the payment of a prescribed fee.
In the recently reported judgment of Nova Property Group Holdings v Cobbett 2016 (4) SA 317 (SCA), the Supreme Court of Appeal (“SCA”) brought light on the rights of access of members of the public in relation to the securities register of a company in terms of section 26(2) of the Companies Act.
In the matter at hand, a journalist known as Cobett together with Moneywebb (“Applicants”), brought an application to compel a group of companies to provide access to their security registers pursuant to their ongoing investigation of illegal investment schemes. The group of companies contested the application on the ground that granting such access would be refused in terms of the Promotion of Access to Information Act No. 2 of 2000 (“PAIA”) in so far as the causa was concerned. The companies alleged that the Applicants had an ulterior motive in requesting the access to the security registers by embarking on a hate campaign aimed at discrediting the companies.
The SCA held that section 26(2) of the Companies Act confers a clear unqualified right of access to members of the general public, in addition to the rights conferred by PAIA. The SCA further ruled that the causa for bringing the application is irrelevant as such an unqualified right of access to a company’s securities register is essential for effective journalism and an informed citizenry in South Africa.