Includes bibliographical references. / The triangular merger structures provide an innovative and effective method for avoiding the voting and concomitant appraisal rights of a holding company’s shareholders. This is because, by incorporating and making use of a wholly owned subsidiary company to effect the proposed transaction, the holding company is deemed not to be a party to the amalgamation or merger agreement; even though the transaction is instigated and financed by it. Importantly, and as a result of the fact that the holding company is able to distance itself from the transaction, its shareholders are deprived of their voting and appraisal rights, thereby allowing said company to effectively avoid the usual cash drain resulting from the exercise of shareholder appraisal rights. It is argued that companies must not be allowed to make use of and exploit the separate legal personality of a shell subsidiary company solely to circumvent the rights of their shareholders. Failing specific legislative intervention to curtail this potential abuse, shareholders of the holding company ought to be able to successfully challenge the implementation of a triangular merger by (i) applying to court in terms of s 20(9) of the Act (the theory behind this being that the triangular merger structures propose the use of a separate legal entity as a device or stratagem to defeat their rights); and/or (ii) filing a complaint with the relevant statutory body citing the provisions of s 115(4) of the Act. In either case, and as an alternative submission, shareholders can also argue that such conduct falls within the parameters of the statutory oppression remedy.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:uct/oai:localhost:11427/12900 |
| Date | January 2014 |
| Creators | Kershoff, Marko Daniel |
| Contributors | Yeats, Jacqueline |
| Publisher | University of Cape Town, Faculty of Law, Department of Commercial Law |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Master Thesis, Masters, LLM |
| Format | application/pdf |
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