POPIA Versus The Companies Act

• Published date: 15 September 2021
• Subject Matter: Corporate/Commercial Law, Privacy, Corporate and Company Law, Data Protection, Securities
• Law Firm: Andersen
• Author: Mr Derrick Kaufmann and Matthew Davis

Who rules the roost on access to and protection of personal information relating to shareholders and directors?

Section 26(1) of the Companies Act, 71 of 2008 ("Companies Act"), provides that –

a person who holds or has a beneficial interest in any securities issued by a profit company, or who is a member of a non-profit company, has a right to inspect and copy the information contained in the records of the company and which information may include, inter alia, the company's memorandum of incorporation and any amendments thereto, director records, and the company's annual financial statements.

Section 26(2) of the Companies Act provides that –

a person not contemplated in subsection (1) above (i.e., a person who does not hold or have a beneficial interest in any securities of such a company) has a right 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.

Despite the above, attention must be given to the Protection of Personal Information Act, 4 of 2013 ("POPIA"), and the obligations placed on "responsible parties" to protect "personal information". The question arises whether the provisions of section 26(2) of the Companies Act are affected in the sense of them being restricted or curtailed by the new privacy laws promulgated under POPIA, specifically in relation to the disclosure of personal information contained in a securities register or register of directors.

Considering that the Companies Act provides for a right of inspection that may appear to conflict the protections covered under POPIA (as POPIA contains a range of provisions regulating the processing of personal information, which in terms of the definition of "processing" in POPIA includes the recording, storage and dissemination of personal information), one must first evaluate section 26(2) of the Companies Act, and then deal with POPIA and how the provisions of section 26(2) of the Companies Act and POPIA are to be reconciled.

In Nova Property Group Holdings Ltd and Others v Cobbett and Another 2016 (4) SA 317 SCA ("Nova Group"), the Supreme Court of Appeal ("SCA") considered the "question of the proper interpretation of section 26(2) of the Companies Act and, in particular, whether it confers an unqualified right of access to the securities register of a company".

The salient...