Claims against negligent or fraudulent directors: proposed amendments to South African legislation
Bibliographic record
Abstract
Abstract Numerous jurisdictions provide for statutory civil liability of directors should they make themselves guilty of managing the business of a company in a reckless, wrongful or fraudulent manner or engage in insolvent trading. Such provisions can play an important role in protecting the interests of corporate creditors, provided that they are properly formulated. This contribution attempts to determine whether the interests of corporate creditors are adequately protected in terms of such provisions. In South Africa, directors' civil and criminal liability for reckless or fraudulent trading is currently provided for in terms of section 424 of the South African Companies Act. Civil liability of those engaged in knowingly taking part in managing the business of the company fraudulently or recklessly is provided for in terms of subsection (1). However, an analysis of case law on the interpretation of section 424(1) reveals that there are numerous uncertainties regarding the application of this provision. Similar provisions in other jurisdictions also display a number of shortcomings. South African company law has just undergone an extensive review, however, and a Draft Companies Bill of 5 February 2007 was recently published for public comment. The liability of directors for reckless or fraudulent trading is provided for in terms of the proposed section 93(2)(b) of the Draft Companies Bill. A comparison between section 424(1) and section 93(2)(b) indicates that some of the uncertainties that exist in terms of section 424(1) may be resolved by the new provision. Unfortunately, the proposed section 93(2)(b) raises some of its own questions and would furthermore seem to offer more limited protection than section 424(1) in certain respects. This unfortunate occurrence will detract from the protection that provisions such as these could afford to the interests of corporate creditors and it is submitted that such provisions should be drafted with great care. Copyright © 2007 John Wiley & Sons, Ltd.
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.025 | 0.036 |
| Meta-epidemiology (narrow) | 0.001 | 0.002 |
| Meta-epidemiology (broad) | 0.001 | 0.003 |
| Bibliometrics | 0.005 | 0.002 |
| Science and technology studies | 0.007 | 0.013 |
| Scholarly communication | 0.012 | 0.006 |
| Open science | 0.005 | 0.008 |
| Research integrity | 0.025 | 0.011 |
| Insufficient payload (model declined to judge) | 0.011 | 0.003 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".