Judgment: The Prudential Authority v M N Dlamini & Another
14 October 2024
Dear Member
This is an appeal by the Prudential Authority (PA) regarding the provisional sequestration of the joint estate of the respondents. The PA sought this sequestration on two grounds under the Banks Act:
- Non-compliance with a directive under Section 83(1), the PA issued a directive requiring the respondents to repay money obtained by unlawfully conducting the business of a bank without proper registration. They failed to comply, which is considered an act of insolvency under Section 83(3)(b).
- Actual insolvency under Section 84(1A) (a), the PA argued that the respondents were factually insolvent based on a draft report by the appointed repayment administrator.
The SCA upheld the PA's appeal, finding that non-compliance with the Section 83 directive was sufficient to deem the respondent’s joint estate insolvent, making sequestration appropriate. The SCA concluded that proving factual insolvency was unnecessary if the act of insolvency under Section 83(3)(b) was established.
Kindly sent to us by Haroon Laher of Fasken Inc.
Take care,
René Bekker
Chief Operating Officer
Judgment: The Prudential Authority v M N Dlamini & Another. SCA Case No:36/2023