ABT Angaza (Pty) Ltd v MPSA Projects (Pty) Ltd and Others

The applicant, ABT Angaza (Pty) Ltd (ABT), held 300 shares (30%) in MPSA Projects (Pty) Ltd (MPSA), while the second respondent, K2022570124 (South Africa) (Pty) Ltd (K2022), held 700 shares (70%). In March 2025, ABT was informed by a director of MPSA that 290 additional shares had been issued to K2022, increasing its shareholding to 990 shares and reducing ABT’s stake to approximately 23%. This dilution removed ABT’s ability to veto special resolutions. ABT contended that the issue of shares was unlawful because MPSA’s memorandum of incorporation (MOI) authorised only 1 000 shares and no special resolution had been adopted to increase authorised share capital. Alternatively, ABT argued that the share issue was oppressive and unfairly prejudicial under section 163 of the Companies Act 71 of 2008, as the shares were issued for inadequate consideration and specifically to strip ABT of its veto rights. The respondents disputed the MOI relied on by ABT, asserting that the true MOI authorised 1 000 000 shares, and maintained that ABT had declined an offer to subscribe for its proportionate allocation of the new shares. The application was brought urgently to interdict a proposed special resolution to sell MPSA’s assets.

The matter was enrolled as urgent. It was declared that ABT held 300 shares and the second respondent held 700 shares in MPSA. MPSA was ordered to rectify its share register accordingly. Judgment on other relief was reserved insofar as necessary, and no order was made on the application to declare the third and fourth respondents delinquent directors. The respondents were ordered, jointly and severally, to pay the applicant’s costs on scale C.

The judgment reinforces the protective scope of section 163 of the Companies Act in cases of share dilution aimed at prejudicing minority shareholders. It underscores that boards must properly and rationally determine ‘adequate consideration’ under section 40(1)(a) and that failure to do so can render a share issue oppressive. The case also illustrates judicial caution in urgent proceedings where foundational corporate documents such as an MOI are factually disputed, and demonstrates flexible remedial powers to preserve shareholder rights without finally determining contested issues.