Roering and Another NNO v Mahlangu and Others

3P Consulting (Pty) Ltd concluded and extended a service level agreement with the Gauteng Department of Health. Following a change in political leadership, the Department attempted to terminate the agreement, alleging irregularities and impropriety. Litigation ensued over the validity of the contract and unpaid invoices amounting to about R99 million. Before that dispute could be finally determined, 3P Consulting was placed in liquidation. Its liquidators, having no personal knowledge of the company’s affairs, obtained authorisation under ss 417 and 418 of the Companies Act 61 of 1973 to convene an insolvency enquiry. They caused a summons to be issued to Ms Qedani Mahlangu, the former MEC for Health, believing her to be able to provide relevant information. Ms Mahlangu applied to the High Court to set aside the summons as an abuse of process on the basis that she was a central witness for the Department in pending civil litigation. The High Court upheld her application. The liquidators appealed to the Supreme Court of Appeal.

The appeal was upheld with costs. The order of the High Court was set aside and replaced with an order dismissing Ms Mahlangu’s application to set aside the summons, with costs.

The decision authoritatively clarifies that insolvency enquiries under ss 417 and 418 of the Companies Act are not rendered abusive merely because they may yield information relevant to pending or contemplated civil litigation. It affirms the broad investigative powers of liquidators and reinforces the importance of such enquiries in protecting the interests of creditors.