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Section 608 of The Companies Act No. 17 of 2015: Consequences of opting in: effect on contractual restrictions

    

(1) The following provisions have effect when a takeover bid is made for an opted-in company.
(2) An agreement to which this section applies is void in so far as it places any restriction—
(a) on the transfer to the offeror, or at the offeror's direction to another person, of shares in the company during the offer period;
(b) on the transfer to any person of shares in the company at a time during the offer period when the offeror holds shares amounting to not less than seventy-five percent in value of all the voting shares in the company;
(c) on rights to vote at a general meeting of the company that decides whether to take any action that might result in the frustration of the bid; (d) on rights to vote at a general meeting of the company that-
(i) is the first such meeting to be held after the end of the offer period; and
(ii) is held at a time when the offeror holds shares amounting to not less than seventy-five percent in value of all the voting shares in the company.
(3) This section applies to an agreement—
(a) entered into between a person holding shares in the company and another such person on or after the commencement of this section; or (b) entered into at any time between such a person and the company,
(4) The reference in subsection (2)(c) to rights to vote at a general meeting of the company that decides whether to take any action that might result in the frustration of the bid includes rights to vote on a written resolution concerned with that question.
(5) For the purposes of subsection (2)(c), action that might result in the frustration of a bid is any action of that kind specified in the Takeover Rules.
(6) A person who sustains loss as a result of an act or omission that would, but for this section, be a breach of an agreement to which this section applies is entitled to compensation from any other person who would, but for this section, be liable to the person for committing or inducing the breach. The amount of compensation is to be such amount as the Court considers just and equitable.
(7) A reference in this section to voting shares in the company does not include
—
(a) debentures; or
(b) shares that, under the company's articles of association, do not normally carry rights to vote at its general meetings (such as shares carrying rights to vote that, under those articles, arise only if specified pecuniary advantages are not provided).

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Disclaimer: This document is not to be taken as legal advise.

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