The Media’s Right to Gain Access to Company Securities Registers

/ / Uncategorized


This article summarises a case in which the courts interpreted Section 26(2) of the Companies Act in relation to the media’s right to gain access to a company’s security registers. Through this case, it once again becomes apparent that the courts support the public’s interest and need to be able to access certain information, as well as the freedom of the press to bring such information to the public. 

Nova Property Group Holdings v Cobbett

This case is an appeal from the High Court to the Supreme Court of Appeal full. The appeal arises from the attempts of Moneyweb (Pty) Ltd (“Moneyweb”) and Mr JP Cobbett (“Cobbett”) – collectively referred to as “the Respondents” – to exercise their statutory right in terms of section 26 of the Companies Act 71 of 2008 (“the Companies Act”) to access the securities registers of:

1. Nova Property Group Holdings Limited (“Nova”);

2. Frontier Asset Management & Investments (Pty) Limited (“Frontier”); and

3. Centro Property Group (Pty) Limited (“Centro”)
– (“The Appellants”).

Cobbett is a financial journalist who specialises in the investigation of illegal investment schemes. Moneyweb is a national publisher of business, financial and investment news. Moneyweb was performing an investigation into the Sharemax Group of Companies’ contentious property investment scheme. Moneyweb thus appointed Cobbett to investigate the shareholding structures of the Appellants, which are ostensibly interrelated to the Sharemax scheme. Moneyweb subsequently asked Cobbett to write articles on his conclusions to circulate in the publication.

Cobbett requested the Appellants to provide him with access to their securities registers and to allow him to make copies thereof, in terms of section 26(2) of the Companies Act. Section 26(2) entitles a person who does not hold a beneficial interest in any securities issued by a profit company (or who is not a member of a non-profit company) to inspect or copy:

• the securities register of a profit company; or

• the members register of a non-profit company that has members; or

• the register of directors of a company,
– upon payment of an amount not exceeding the prescribed maximum fee for any such inspection.

When the Appellants denied Cobbett’s request, Moneyweb launched an application in the Gauteng Division of the High Court, Pretoria (“the High Court”), to compel the Appellants to provide access to it within 5 days (“the main application”).

The Appellants issued notices in response thereto, in terms of rule 35(12) and (14) of the Uniform Rules of Court, in which they sought various documents referred to in Moneyweb’s founding affidavit. Disgruntled with Moneyweb’s refusal to provide these documents, the Appellants launched an application to compel Moneyweb to comply with the notices (“the interlocutory application”). The interlocutory application revealed that the Appellants allegedly sought these documents to determine Moneyweb’s ‘real motive’, as they believed that Moneyweb was acting in prolongation of a ‘menacing agenda’ directed against Nova and its subsidiaries.

The High Court ordered Moneyweb et al to comply in terms of the Appellant’s rule 35(12) of the Uniform Rules of Court application to compel discovery of documents referred to in Moneyweb’s founding affidavit, but dismissed the Appellant’s application in terms of rule 35(14) of the Uniform Rules of Court.. The High Court did not decide on the main application but nevertheless commented on the interpretation of section 26(2) of the Companies Act and stated that the section did not confer an absolute right to inspection of the documents, but that the court retained a discretion to refuse to order inspection.

There are two issues in the appeal before the Supreme Court of Appeal (“the SCA”). The first issue that arises is whether the decision of the High Court is appealable. If found to be so, then the second issue is whether the documents sought by the Appellants in terms of rule 35(14) of the Uniform Rules of Court are relevant to a reasonably anticipated issue in the main application. This concerns the proper interpretation of section 26(2) of the Companies Act, specifically, whether it confers an unqualified right of access to a company’s securities register.

Whether the order is appealable:

Section 17(1) of the Superior Courts Act 10 of 2013 (“the Superior Courts Act”), provides for the circumstances in which a judge may grant leave to appeal. The applicable sub-sections provide:

“(1) Leave to appeal may only be given where the judge or judges concerned are of the opinion that:

(a) (ii) there is some other compelling reason why the appeal should be heard, including conflicting judgments on the matter under consideration; and

(c) where the decision sought to be appealed does not dispose of all the issues in the case, the appeal would lead to a just and prompt resolution of the real issues between the parties.”

The Judge stated that the provisions of section 17(1) of the Superior Courts Act are ideal for the abovementioned appeal primarily for two reasons:

1. The fact that there are at least four conflicting judgments, including that of the High Court, on the proper interpretation of section 26(2) of the Companies Act.

2. The appeal would lead to a just and prompt resolution of the real issues between the parties.

Uniform Rules of Court

Rule 35(14) of the Uniform Rules of Court provides that a party may, for purposes of pleading, oblige any other party to make available for inspection, within five days, a clearly identified document or tape-recording in his possession ‘which is relevant to a reasonably anticipated issue in the action’, and to allow a copy to be made of it. The Appellants were, therefore, required to demonstrate that the documents were relevant to a reasonable ground of opposition to the main application. The Appellants sought to compel discovery for the purpose of interrogating Moneyweb’s ‘real motives’. Accordingly, the question of the ‘relevance’ of the documents sought, would be vital to the interpretation of section 26(2) of the Companies Act. In this regard, the Court held that the test for interlocutory applications to compel discovery, can be appealed under section 17(1) of the Superior Courts Act. 

Interpretation of section 26(2) of the Companies Act

The Appellants argued that section 26(2) confers a qualified right, as access may be denied on the grounds set out in the Promotion of Access to Information Act 2 of 2000 (“PAIA”), and on the grounds of the ‘motive’ of the requester. On the contrary, Moneyweb contended that an unqualified right is conferred on any person who meets the procedural requirements of section 26(2) of the Companies Act. It was argued that if access to securities registers was subject to the grounds of refusal which apply to a request under PAIA or to a refusal based on the alleged motive of the requester, then this will have a considerable negative impact on investigative journalists and the public’s right to know.

The Court stated that the right of access to information in section 32 of the Constitution was central to the interpretation of section 26(2) of the Companies Act. Section 26(1) of the Companies Act confers a right of access to information in respect of various kinds of information to a person who holds a beneficial interest in any securities bestowed by a profit company, or who is a member of a non-profit company. Section 26(2) then confers a narrower and more meticulous right of access to all others persons.

Interaction between section 26(2) of the Companies Act and PAIA

Section 26 specifically states that the right conferred by section 26(2) is additional to the rights conferred by PAIA and does not need to be exercised in accordance with PAIA. PAIA produces general rules to balance contending interests of privacy and a right to access to information by means of threshold requirements, grounds of refusal and public interest overrides. On the other hand section 26(2) provides a specific right in respect of one type of information only − securities registers and directors registers. This confers an unqualified right that is capable of swift justification.

The Appellants relied on PAIA stating that the refusal to grant access to Moneyweb ‘is justified on the basis of the provisions of section 68(1) of PAIA.’ In terms of section 68(1) of PAIA, access to a record of a company may be denied if the record:

(a) contains trade secrets of the company;

(b) contains financial, commercial, scientific or technical information, other than trade secrets, of the company, the disclosure of which would be likely to cause harm to the commercial or financial interests of the company;

(c) contains information, the disclosure of which could reasonably be expected; will put the company at a disadvantage in contractual and other negotiations; or will prejudice the company in commercial competition.

The SCA held that security registers do not comprise of information of this nature and the Appellants, therefore, cannot rely on section 68(1) of PAIA.

If the limitations of PAIA applied to section 26(2) of the Companies Act, journalists would not have prompt access to securities registers − for whom timely access is essential and the inconvenience and cost of an application to court to challenge a refusal on those grounds will significantly impede access to securities registers.

The nature of the right conferred by the Companies Act

Section 26(2) explicitly provides for a right of access in respect of the securities registers. Section 26(5) then goes further and provides expressly, and in unqualified terms, that where a company receives a request in the prescribed form, the company ‘must within 14 business days comply with the request’. Section 26(9) further provides that it is a criminal offence for a company to fail to accommodate or unreasonably refuse any reasonable request to access to information that a person has a right to inspect or copy in terms of this section.

Section 26(4) provides:
“The rights of access to information set out in this section are in addition to, and not in substitution for, any rights a person may have to access information in terms of –

(a) section 32 of the Constitution;

(b) the Promotion of Access to Information Act, 2000 (Act No. 2 of 2000; or

(c) any other public regulation.

The Court held that the reasonableness defence in section 26(9) is to avoid creating a strict liability offence. However, the Appellants sought to import the section 26(9) reasonableness qualification back into section 26(2) to limit the right it confers, and there was no merit for this, because if Parliament had intended to limit the section 26(2) right, it would have done so explicitly. Instead, it enacted an unqualified right in section 26(2) read with section 26(4) and introduced a reasonableness qualification only in respect of the criminal offence created by section 26(9).

Section 26(2) thus clearly provides for an unqualified right on members of the public and the media to obtain access to securities registers. This right is separate from PAIA. The motive behind a person’s request to access the securities register is therefore extraneous.

The court made reference to Brümmer v Minister for Social Development & others , which stated that the media have a duty to report accurately and in order to do so, journalists must have speedy access to information, which includes securities registers. Failure to provide for this would interfere with the right to freedom of press.

The Appellants finally asserted that an unqualified right of access to a company’s securities register would constitute a violation of the shareholder’s right to privacy in terms of section 14 of the Constitution of the Republic of South Africa, 1996. The SCA rejected this contention as the shareholders right to privacy and dignity would be minimally affected by the right to access in terms of section 26(2), because a shareholder is required to provide his or her name, identity number, business, residential or postal address, or an e-mail address only if he or she elects to do so. Furthermore, the identity number and e-mail address entered into a security register may be regarded as confidential at the instance of the company or the shareholder. Thus there are internal safeguards to protect against disclosure of confidential information of this kind.

The SCA held further that in light of the inconsequence of Moneyweb’s motive; the true reason for the appeal is the fact that the Appellant’s did not appreciate the negative press coverage. This alone was found to be an insufficient justification in order to limit the application of Moneyweb’s section 26(2) statutory rights. The appeal was thus dismissed with cost.


It is clear in the view of the courts that in terms of section 26(2) of the Companies Act, there is an unqualified right of the media to gain access to a company’s securities register, and that there are robust statutory justifications for same. This depicts the view of the courts that their obligation to protect the right to freedom of press is of utmost importance as the press has a duty to provide vital information to the public. 


Maike Gohl
Associate at Schindlers Attorneys
Phone: +27 (0) 11 448 9679

Jonathan Salant
Candidate Attorney at Schindlers Attorneys
Phone: +27 (0) 11 448 9634

Share Article: