The shareholder’s appraisal remedy under the Companies Act: How should the courts gauge ‘fair value’?
Bibliographic record
Abstract
The appraisal remedy is the right of minority shareholders to demand that the company buy out their shares in cash, at a price reflecting their ‘fair value’, when they are aggrieved by certain triggering transactions that the majority shareholders have approved. The appraisal right is an American concept that was introduced into South African law when the Companies Act 71 of 2008 came into force. The most formidable challenge concerning the appraisal right is the meaning and interpretation of the key phrase ‘fair value’ and, coupled with this, the appropriate valuation methodology that the court ought to adopt when valuing the shares of dissenting minority shareholders. Two recent judgments of the High Court have considered these thorny issues for the first time. This article critically analyses the findings of the High Court in BNS Nominees (RF) (Pty) Ltd v Zeder Investments Ltd and BNS Nominees (RF) (Pty) Ltd v Arrowhead Properties Ltd, with a particular focus on the divergent approaches that the two cases adopt in gauging the ‘fair value’ of the dissenters’ shares and the judicial discretion to appoint an appraiser to value the shares. This is followed by a detailed discussion of the proper interpretation of the pivotal phrase ‘fair value’ in appraisal proceedings and of appraisal valuation methodology. This is done with reference to the legal position in comparable foreign jurisdictions such as the United States of America and Canada. Guidelines are also suggested for the South African courts to follow when gauging the ‘fair value’ of shares in appraisal cases.
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How this classification was reachedexpand
Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.001 | 0.000 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.000 | 0.001 |
| Science and technology studies | 0.003 | 0.001 |
| Scholarly communication | 0.006 | 0.001 |
| Open science | 0.001 | 0.000 |
| Research integrity | 0.000 | 0.001 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
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 teacher head, 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".