Black Economic Empowerment – Amended Company Laws will stimulate Deal Activity

20 May 2008 Deneys Reitz

Historically, our company laws prohibited a company from providing financial assistance for the purchase of its own shares. This restriction was aimed at preserving the company’s capital and protecting the minority shareholders and creditors of the company. However, in recent years, it also had the effect of hampering the implementation of black economic empowerment in South Africa in that empowerment partners could not look to the company for financial assistance to take up shares in the company.

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