Securitisations and their Tax Treatment

Introduction Corporates are almost always in need of cash – whether for growing and expanding the business, settling maturing debt obligations, or funding a take-over. Depending on its credit rating, a company may meet this need by issuing unsecured debt securities. However, raising capital this way may be a tad expensive. A less expensive alternative may be for the company to pledge its existing assets and borrow against them. Yet another way to raise cash is through factoring of the [...]

Should Carried Interests in Private Equity Be Taxed As Capital or Revenue?

Cornwell Dauds Introduction The favourable tax treatment of private equity profits has been a cause for concern for many revenue authorities, precisely because of the apparent tax base erosion effect. In some countries, even the public has expressed its outrage at the favourable manner in which private equity profits are taxed. As an emerging economy, South Africa relies heavily on investment and, like many other economies, government uses a number of options at its disposal – including tax measures - [...]

Does section 18 of the Superior Courts Act offend the Constitution?

Advocate Carol Steinberg:    Thulamela Chambers Does section 18 of the Superior Courts Act offend the Constitution? When an unsuccessful litigant applies to appeal a high court order, the operation of the order is automatically suspended pending the determination of the appeal.  In exceptional circumstances, the court may decide that the order should be enforced pending the appeal. The enforcement of an order pending an appeal is sometimes critical to the outcome of the case.  For example, if a court interdicts [...]

Backpedalling From A Cartel

Omnico (Pty) Limited and Another v Competition Commission and Others 142/CAC/JUNE16 (19 December 2016) On 19 December 2016, the Competition Appeal Court (“CAC”) handed down its decision in the bicycle cartel case, Omnico (Pty) Limited and Another v Competition Commission and Others.  The CAC was asked to consider whether the silent participation by firms at a meeting where cartel activity was discussed amounts to a price-fixing cartel, in contravention of section 4(1)(b)(i) of the Competition Act, 89 of 1998.  At [...]

The Reality of a Male Dominated World: Different Does Not Mean Inferior

Introduction The gender debate impacting the community and the legal fraternity makes both a fascinating story and an exciting intellectual exercise. In this short article, I explore the main areas of interest namely: the impact on process and outcome of the gender comparison and  a reflection on the relation between women to the law both practically and theoretically. Some food for thought is whether: the application of the law is the same on women and men? the liberal concept of [...]

High Court Reins In Contingency Fee Practices

The High Court in Johannesburg recently handed down judgment in Masango and Another v Road Accident Fund and Others[1], a case with important implications for lawyers who enter into contingency fee agreements. The Court’s primary finding was that VAT is not recoverable above the 25% cap imposed by the Contingency Fees Act 66 of 1997 (“the Contingency Fees Act”).[2] The plaintiff’s attorney of record concluded a contingency fee agreement with the plaintiff. The agreement provided that if the plaintiff was successful [...]

An Abrupt End To A Tender Affair

Authors: Nick Ferreira and Katherine Harding (pupil)   Life has become more difficult for litigants who want to challenge state decisions to cancel tender processes. According to two recent SCA judgments, the cancellation of a tender prior to adjudication does not amount to administrative action within the meaning of the Promotion of Administrative Justice Act 3 of 2000 (“PAJA”), and is therefore not susceptible to PAJA review.[1] In Nambiti, Tshwane published an invitation to tender for services. Tshwane then cancelled [...]

National Security and Exchange Control – the temptations of protectionism

1. The economic growth outlook in South Africa at present does not make for the rosiest picture. It was not more than a week ago that Standard and Poor’s (“S&P’s”) decided, thankfully, to hold off on downgrading South Africa’s long-term debt status from its current ‘BBB–’ rating to ‘junk’, i.e. below investment grade. The International Monetary Fund’s latest forecast of our economy’s growth outlook for this year is at 0.6 percent (with some forecasting even less than this), and global [...]

Criminalisation of Cartels

Time to ratchet things up on cartels! From a report in the Business Day of Friday, 22 April 2016, that’s effectively the message of the Minister of Economic Development, Mr Ebrahim Patel. The Minister appears bent on using section 73A of the Competition Amendment Act to criminalise hard-core cartel practices such as price-fixing, market division and collusion in tenders (bid rigging). Granted, cartel practices have worldwide been declared a most egregious offence which has no place in a sound economy [...]