Grancy Property Limited v Manala and Others

Grancy Property Limited, a minority shareholder in Seena Marena Investments (Pty) Ltd (SMI), alleged that the majority shareholders and former directors, Lancelot Manala and Dines Gihwala, engaged in oppressive and unfairly prejudicial conduct. The allegations included breaches of fiduciary duties, misappropriation and unauthorised payments of company funds, unlawful directors’ remuneration and fees, and the exclusion of Grancy from dividends. After Manala and Gihwala resigned as directors, SMI was left without a board. Grancy sought interim relief under s 163 of the Companies Act 71 of 2008 for the appointment of independent directors to manage and investigate SMI’s affairs pending the outcome of a main action.

The appeal was upheld with costs. The High Court’s order was set aside and replaced with an order appointing two independent directors to SMI, granting them exclusive authority to decide on and conduct an investigation into SMI’s affairs, regulating their tenure and remuneration, and providing that the order operate pending finalisation of the main action.

This case is a leading authority on s 163 of the Companies Act 71 of 2008, confirming the breadth of the court’s discretion to grant flexible and innovative remedies for oppressive or unfairly prejudicial conduct. It underscores strong protection for minority shareholders and affirms that courts may intervene proactively in corporate governance to prevent ongoing prejudice.