Thursday, 4 April 2013

South Africa: fraudulent trading under section 424 of the Companies Act 1973

The Supreme Court of Appeal gave judgment last month in Tsung v IDC (173/2012) [2013] ZASCA 26. A copy of the judgment is available here (pdf) and a summary is available here (pdf). The case concerned the liability of directors under section 424(1) of the Companies Act 1973 (liability of directors and others for fraudulent conduct of business). The court unanimously held that directors were liable and considered the scope of section 424 liability against the background of the court's decision last year in Fourie v First Rand Bank Ltd (548/2012) [2012] ZASCA 119; 2013 (1) SA 204 (SCA); [2013] 1 All SA 291 (SCA).

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