Companies Act, 1973 (Act No. 61 of 1973)Chapter IV: Formation, Objects, Capacity, Powers, Names, Registration and Incorporation of CompaniesFormation, Objects and Powers39. Company not to be a member of its holding company |
| 1) | Save as is provided in subsection (2), if shares in a company are acquired in accordance with section 89 by its subsidiary, for as long as such shares are held by the subsidiary- |
| a) | no voting rights attaching to such shares may be exercised; and |
| b) | the percentage of votes able to be cast at any meeting of shareholders shall be reduced by the number of shares held by the subsidiary: Provided that this subsection shall not apply where the shares are acquired in a subsidiary of the holding company which is also a subsidiary of the acquiring company. |
| 2) | The provisions of subsection (1) shall not apply in relation to a subsidiary acting in a representative capacity or as a trustee, unless the holding company or a subsidiary thereof is beneficially interested under the trust and is not so interested only by way of security for the purposes of a transaction entered into by it in the ordinary course of a business which includes the lending of money. |
| 3) | [Subsection (3) deleted by section 4 of Act No. 37 of 1999]. |
| 4) | [Subsection (4) deleted by section 4 of Act No. 37 of 1999]. |
| 5) | In relation to a company limited by guarantee which is a holding company, the reference in this section to shares of a company, shall be construed as including a reference to the interest of its members as such, whatever the form of that interest. |