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Financial Advisory and Intermediary Services Act, 2002 (Act No. 37 of 2002)

Chapter VI : Enforcement

Part 2 : Other enforcement measures

38A. Business rescue

 

 

(1)        

(a) Notwithstanding the provisions of the Companies Act or any other law under which a provider is incorporated, Chapter 6 of the Companies Act shall, subject to this section and with the necessary changes, apply in relation to the business rescue of a provider, whether or not it is a company.
(b) This section does not apply if another registrar is authorised in terms of Financial Services Board legislation as defined in section 1 of the Financial Services Board Act, 1990 (Act No. 97 of 1990), or in terms of banking legislation, to make an application for the business rescue of a provider.

 

(2) The registrar may make an application under section 131 of the Companies Act in respect of a provider if the registrar is satisfied that it is in the interests of the clients of the provider or the financial services industry.

 

(3) The following acts are subject to the approval of the registrar:
(a) The resolution of a provider to begin business rescue proceedings;
(b) the appointment of a business rescue practitioner;
(c) the adoption of a business rescue plan; and
(d) the exercise of a power by the business rescue practitioner under the Companies Act.

 

(4) In the application of Chapter 6 of the Companies Act—
(a) any reference to the Commission shall be construed as a reference also to the registrar;
(b) the reference to creditors shall be construed as a reference also to clients of the provider;
(c) any reference relating to the ability of a provider to pay all debts, shall be construed as relating also to the provider’s inability to comply with the financial soundness requirement under section 8(1)(c) of this Act;
(d) there shall be considered, in addition to any question relating to the business of a provider, also the question whether any cause of action is in the interests of the clients.

 

(5) If an application to a Court for an order relating to the business rescue of a provider is made by an affected person other than the registrar—
(a) the application shall not be heard unless copies of the notice of motion and of all accompanying affidavits and other documents filed in support of the application are lodged with the registrar, before the application is set down for hearing;
(b) the registrar may, if satisfied that the application is not in the interests of the clients of the provider, join the application as a party and file affidavits and other documents in opposition to the application.

 

(6) As from the date upon which a business rescue practitioner is appointed, the business rescue practitioner of a provider shall not conduct any new business unless the practitioner has been granted permission to do so by a court.

 

[Section 38A inserted by section 201 of Act No. 45 of 2013]