In the recently reported judgment of BNS Nominees (RF) Proprietary Limited and Another v Arrowhead Properties Limited and Others 2023 (1) SA 478 (GJ), the Johannesburg High Court provided clarity regarding certain provisions of section 164 of the Companies Act No. 71 of 2008 (“Companies Act”) relating to the appraisal rights of shareholders and the determination of “fair value”.

Appraisal rights are rights granted to a shareholder who has voted against the implementation of certain proposed corporate actions. Such shareholders are typically regarded as “dissenting shareholders”. Section 164 entitles a dissenting shareholder to sell its shares to the company for fair value. If the dissenting shareholder is of the view that the offer from the company does not constitute fair value, then it can bring an application for the court to determine that value or to appoint one or more appraisers to assist it in that task.

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