The Companies and Intellectual Property Commission (CIPC) announced on April 24, 2023, that it has successfully secured a liquidation order against Selective Empowerment Investments 1 LTD (SEI 1). This follows the CIPC’s enforcement role as stipulated in Section 158 of the Companies Act 72 of 2008, which aims to protect the interests of shareholders, investors, and related parties.
Section 158 of the Companies Act emphasizes the need to develop common law and promote the spirit, purpose, and objects of the Act when determining matters brought before a court. In the case between the CIPC (Applicant) and SEI 1 (Respondent), the court placed the company under final winding up on April 24, 2023.
The CIPC initiated the liquidation application against SEI 1 after several compliance notices were issued over numerous financial years. These notices included accusations of reckless trading and other violations, resulting in contravention of Sections 24 and 30 of the Companies Act. The liquidation was sought in terms of Section 81(1) (f) of the Companies Act.
The CIPC believes that the final order to wind up is the best remedy to protect the investors of SEI 1, many of whom were first-time or inexperienced investors. These investors had bought shares in an entity that procured shares using public funds.
The successful application of the order for final winding up was made possible through the collaboration of the CIPC with other regulatory agencies. The CIPC remains dedicated to creating an enabling and secure environment for all investors in entities regulated by the Companies Act 71 of 2008, as amended.
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