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Companies Act, 2008 (Act No. 71 of 2008)

Chapter 6 : Business Rescue and Compromise with Creditors

Part B : Practitioner’s functions and terms of appointment

140. General powers and duties of practitioners

 

 

1) During a company’s business rescue proceedings, the practitioner, in addition to any other powers and duties set out in this Chapter—
a) has full management control of the company in substitution for its board and pre-existing management;
b) may delegate any power or function of the practitioner to a person who was part of the board or pre-existing management of the company;
c) may—
i) remove from office any person who forms part of the pre-existing management of the company; or
ii) appoint a person as part of the management of a company, whether to fill a vacancy or not, subject to subsection (2); and
d) is responsible to—
i) develop a business rescue plan to be considered by affected persons, in accordance with Part D of this Chapter; and
ii) implement any business rescue plan that has been adopted in accordance with Part D of this Chapter.

 

1A) The practitioner must, as soon as practicable after appointment, inform all relevant regulatory authorities having authority in respect of the activities of the company, of the fact that the company has been placed under business rescue proceedings and of his or her appointment.

 

2) Except with the approval of the court on application by the practitioner, a practitioner may not appoint a person as part of the management of the company, or an advisor to the company or to the practitioner, if that person—
a) has any other relationship with the company such as would lead a reasonable and informed third party to conclude that the integrity, impartiality or objectivity of that person is compromised by that relationship; or
b) is related to a person who has a relationship contemplated in paragraph (a).

 

3) During a company’s business rescue proceedings, the practitioner—
a) is an officer of the court, and must report to the court in accordance with any applicable rules of, or orders made by, the court;
b) has the responsibilities, duties and liabilities of a director of the company, as set out in sections 75 to 77; and
c) other than as contemplated in paragraph (b)—
i) is not liable for any act or omission in good faith in the course of the exercise of the powers and performance of the functions of practitioner; but
ii) may be held liable in accordance with any relevant law for the consequences of any act or omission amounting to gross negligence in the exercise of the powers and performance of the functions of practitioner.

 

4) If the business rescue process concludes with an order placing the company in liquidation, any person who has acted as practitioner during the business rescue process may not be appointed as liquidator of the company.