Investigations

The authority to investigate is found in sections 168 – 175 and 209 of the Companies Act, (No 71 of 2008). The Act also covers the summonsing and search & seizure powers of the Commission in sections 176 to 179.

Any person may file a complaint with the Commission. The complaint must be in writing, and must relate to:

• any provision of the Act alleging that a person has acted inconsistently with this Act,
• or the infringement of a complainant’s rights under this Act or under a company’s Memorandum of Incorporation.

A complaint may also be initiated directly by the Commission on its own accord or on the request of another regulatory authority.

The Minister of Trade and Industry may direct the Commission to investigate an alleged contravention of this Act or other specified circumstances.

Upon initiating or receiving a complaint, the Commission may: issue a notice to the complainant that it will not investigate the complaint if it appears to be frivolous, vexatious or does not allege any facts that would constitute grounds for remedy under the Act.

However, upon receiving instruction from the Minister, it is compulsory for the Commission to investigate the matter and is not subject to any discretion.

If more practical, the Commission can refer the complainant to the Companies Tribunal, or to any other accredited entity, with a recommendation that the complainant seek to resolve the matter with the assistance of that agency. In the case of urgency, the Commission may direct an inspector or investigator to investigate the complaint as quickly as possible.

In terms sections 176 to 179 of the Act, the Commission may issue a summons to any person who is believed to be able to furnish any information or who has possession or control of any book, document or object that has a bearing on the investigation to appear before the Commission, or inspector or independent investigator to be questioned or to deliver or produce the summonsed item. Section 177 provides the required powers to enter and search premises from information received under oath or through affirmation that there are reasonable grounds to believe that a contravention of this Act has, is or is likely to take place on or in those premises; or that anything connected with an investigation is in possession of or under control of a person on those premises.

Outcome of an investigation

The outcome of an investigation is dealt with in sections 170 to 173 of the Act. The Commission may:

• excuse a respondent if the CIPC considers it reasonable to do so, having regard to the person’s conduct, and the person’s cooperation with the investigation;
• refer the complaint to the Companies Tribunal, or the Takeover Panel as the case may be, depending on jurisdiction;
• issue a notice of non-referral to the complainant, advising them of their rights to seek a remedy in court;
• propose that the complainant, or any other affected person, meet with the CIPC or with the Tribunal, to resolve matter by consent order.
• commence proceedings in court in the name of the complainant, if the complainant:
  • has a right to apply to a court; and
  • has consented for the Commission to do so;
• refer the matter to the National Prosecuting Authority, or other regulatory authority, if the Commission alleges that a person has committed an offence in terms of this Act or any other legislation;
• issue a compliance notice in terms of section 171.