How the high court defended Mamokebe Investments against an illegitimate board takeover: 

 

In a significant judgment, the High Court of South Africa (Gauteng Division, Pretoria) underscored the importance of strict compliance with both company law and mining legislation when control of a company changes hands. The case of Mamokebe Investments (Pty) Ltd v Sokhela and Others centres on the validity of a 2016 agreement, a subsequent purported shareholders’ meeting, and the recording of directors with the Companies and Intellectual Property Commission (CIPC). The court’s findings reinforce fundamental principles of company law and mining regulation, offering valuable lessons for business owners, directors, and investors. 

 

Mamokebe Investments (Pty) Ltd was incorporated in 2006 as an inactive shelf company. Its initial sole shareholder transferred shares in November 2006, resulting in Mr Kgaapu Stanley Mphahlele (commonly referred to as Stanley) holding 49 shares and Ms Motjoadi Ramatsimele Francina holding 51 shares. Both individuals were appointed as directors. For approximately ten years, the company’s governance remained stable and uncontested. Ms Francina passed away, with her shareholding forming part of her deceased estate. Stanley consistently maintained that he remained the legitimate sole director. 

 

The dispute originated from an agreement concluded on 13 September 2016, known as the Alcucento agreement. This document, styled as a shareholders’ agreement, involved Stanley and Francina, the company itself, and Alcucento (Pty) Ltd t/a Rubicon Consortium Mining, represented by Mr Mohamed Adam. In substance, the agreement contemplated that Alcucento would acquire a significant shareholding in Mamokebe and exercise corresponding rights. At the time, Mamokebe held a prospecting right, later converted to a mining right under the Minerals and Petroleum Resources Development Act 28 of 2002 (the MPRDA). 

 

Section 11 of the MPRDA imposes strict controls on the transfer of prospecting or mining rights, or any controlling interest in a company that holds such rights. For non-listed companies, any cession, transfer, or disposal of a controlling interest requires the prior written consent of the Minister of Mineral Resources and Energy. The Alcucento agreement directly contemplated such a transfer of control yet contained no suspensive condition making its operation dependent on ministerial approval, and no consent was ever obtained. The court examined the peremptory language of section 11, its purpose of ensuring regulatory oversight over strategic mineral resources, and the broader objects of the MPRDA, which emphasise state custodianship of mineral resources for the benefit of all South Africans. Agreements that contravene such protective legislation – especially where criminal sanctions apply for non-compliance – are contrary to public policy and are therefore void from the outset. 

 

 

Even if the agreement had not been rendered invalid by the MPRDA, it was never implemented in accordance with the Companies Act 71 of 2008. No amendment was made to the company’s Memorandum of Incorporation to authorise the required increase in share capital. No board resolution was passed to allot and issue shares to Alcucento. No consideration was paid, and Alcucento was never recorded as a shareholder in the company’s register. In legal terms, authorised but unissued shares confer no rights until properly issued by the board following the requisite corporate steps. The opposing respondents themselves conceded in court papers that Alcucento had merely “expected to be vested with shares and directorships” as set out in the agreement. This admission confirmed that no actual vesting occurred. 

 

Despite these insurmountable obstacles, Alcucento purported to act as a shareholder six years later. On 5 October 2022, it convened what it described as a shareholders’ meeting. The notice and agenda were issued by the fourth respondent, who styled himself as chairperson without lawful basis. The minutes recorded Alcucento as holding a 70 per cent shareholding, an assertion unsupported by any corporate records. Resolutions were purportedly adopted appointing the first, second, and fourth respondents (Messrs Sokhela, Bey, and Adam) as directors, converting existing shares, and increasing the company’s share capital. These actions were fundamentally flawed. Under the Companies Act, only the board or a person authorised by the Memorandum of Incorporation may convene a shareholders’ meeting. A non-shareholder possesses no such authority. Even if Alcucento had been a shareholder, the meeting would have contravened procedural requirements, including the need for sufficient shareholders to be present and for resolutions to be properly proposed. 

 

Following the purported meeting, a Form CoR39 (Notice of Change of Directors) was lodged with the CIPC on 21 October 2022. It is common cause that the signatures of Stanley and Francina appearing on this form and on accompanying minutes were forgeries. An independent handwriting expert confirmed the forgeries. A criminal complaint was laid, and during the ensuing investigation the fourth respondent initially attributed responsibility to a third party before conceding that the forger had been engaged to effect the changes. Despite knowledge of these irregularities, the respondents (with the exception of the third respondent, who resigned) continued to hold themselves out as directors. 

 

Stanley, as the legitimate director, launched an urgent application seeking an interim interdict restraining the opposing respondents from acting or purporting to act on behalf of the company. The respondents raised a procedural challenge under Rule 7(1) of the Uniform Rules of Court, disputing the authority of the applicant’s attorneys. They also sought to rely on a prior court order granted by agreement in March 2025. The court carefully considered these defences but held that a Rule 7 enquiry cannot be used to bootstrap contested internal governance disputes where the very subject matter of the litigation is the alleged unlawful assumption of corporate control. Persons who have purportedly seized control through void processes cannot rely on their own contested status to prevent the company from seeking relief from the court. The long-standing position from 2006 until 2022, the admissions regarding non-vesting of shares, and the common-cause forgery provided a sufficient basis for the court to conclude that the applicant was properly before it. 

 

The court found that the Alcucento agreement was void ab initio (“void from the beginning” or “invalid from the outset”) for contravening section 11 of the MPRDA. It was, in any event, never implemented. The 2022 meeting was convened by a non-shareholder and suffered from multiple procedural defects. The appointments and CIPC recordals were accordingly null and void. On 26 March 2026, the court granted an urgent interim interdict pendente lite (“pending the litigation” or “while the case is still ongoing”) restraining the first, second, and fourth respondents from acting as directors. This order formed part of three interrelated urgent applications, including a postponed winding-up application by an alleged creditor and another application by the company itself. 

 

This judgment carries significant implications. It underscores that corporate control cannot be acquired through shortcuts that bypass statutory safeguards, particularly in industries subject to regulatory oversight such as mining. For company directors, shareholders, and those considering commercial partnerships in regulated sectors, the Mamokebe judgment serves as a clear reminder of the importance of proper legal process and due diligence. 

 

So, what do we learn from this case? 

 

• Statutory provisions enacted to safeguard public interests, such as section 11 of the MPRDA, render agreements concluded in breach thereof void from the outset, irrespective of the subjective intentions or commercial motivations of the contracting parties. 

 

• All corporate actions pertaining to share capital, the issuance of shares, the convening of meetings, and the appointment of directors must be executed in strict accordance with the mandatory requirements of the Companies Act 71 of 2008; any material deviation results in such actions being null and void from the outset. 

 

• Only the board of directors, or a person expressly authorised by the company’s Memorandum of Incorporation or rules, possesses the authority to convene a shareholders’ meeting; a non-shareholder lacks standing to do so and any resolutions purportedly adopted at such a meeting are of no legal force or effect. 

 

• The public integrity of the CIPC register is fundamental to commercial certainty; the lodgement of documents bearing forged signatures of legitimate directors constitutes fraud and invalidates the resultant recordal of changes in directorship or company particulars. 

 

• A procedural challenge under Rule 7(1) of the Uniform Rules of Court cannot be deployed to paralyse or defeat legitimate litigation instituted to remedy the alleged unlawful usurpation of corporate control, as this would permit wrongdoers to shield themselves behind their own contested status. 

 

• Formal admissions recorded in affidavits or pleadings are binding upon the parties making them; such admissions may conclusively resolve material factual disputes and relieve the opposing party of the burden of proof. 

 

• In sectors subject to stringent regulatory oversight, particularly the mining industry, any transaction that effects a change of control in a company holding prospecting or mining rights requires prior ministerial consent; the absence of such consent exposes the transaction to nullification on public-policy grounds. 

 

• South African courts will not hesitate to grant urgent interim interdictory relief where there is credible evidence of ongoing prejudice arising from disputed corporate governance, thereby protecting the company’s separate legal personality and preventing third parties from being prejudiced by illegitimate actors. 

 

• Commercial parties contemplating partnerships, share acquisitions, or governance changes in regulated industries must undertake comprehensive legal due diligence and obtain specialist advice to ensure full compliance with both general company law and applicable sector-specific legislation; shortcuts invariably lead to costly and protracted litigation. 

 

Grant Howard 

Partner