A recent judgment handed down by Nyathi J in Maralco Business Advisors CC t/a Maralco Plant Services v GMK Civils Proprietary Limited [1], serves as an important reminder that liquidation proceedings are not a debt-collection mechanism where the underlying indebtedness is genuinely disputed.

The matter concerned an application for the final winding-up of GMK Civils Proprietary Limited on the basis that the company was allegedly unable to pay its debts as contemplated in section 344(f), read with section 345(1)(c), of the Companies Act 61 of 1973. The applicant alleged that the respondent was indebted to it in the amount of R817 994.50 arising from a plant rental facility allegedly concluded on a thirty-day basis and supported by a certificate of balance.

The respondent opposed the application on several grounds. Central to its defence was that its sole director neither concluded nor authorised the alleged facility agreement relied upon by the applicant. The respondent further contended that, even on the applicant’s own version, the alleged agreement was void for uncertainty because it failed to record an essential term, namely the rental rates or a mechanism by which such rental rates could be determined. On this basis, the respondent argued that the invoices relied upon by the applicant could not establish the indebtedness alleged.

The Court ultimately dismissed the winding-up application with costs, reaffirming the long-established principle set out in Badenhorst v Northern Construction Enterprises Proprietary Limited [2], namely that liquidation proceedings should not be used to enforce payment of a debt that is bona fide disputed on reasonable grounds.

Importantly, Nyathi J did not merely accept a generic allegation of dispute. The Court carefully analysed the nature of the disputes raised and found that they constituted substantive contractual disputes incapable of proper determination in motion proceedings seeking liquidation relief.

The applicant relied heavily on a certificate of balance clause as prima facie proof of indebtedness. However, the Court drew an important distinction between proof of indebtedness and proof of liability itself. Nyathi J held that while a certificate of balance may constitute prima facie proof according to its terms, it cannot conclusively establish liability where the validity and enforceability of the underlying agreement are themselves credibly challenged.

In particularly strong language, the Court held that “a certificate cannot bootstrap validity”. This is a significant statement for commercial litigants and insolvency practitioners alike. Certificate of balance clauses are routinely relied upon in commercial litigation and insolvency proceedings, particularly in matters involving facilities, running accounts, or credit agreements. The judgment makes it clear that the evidentiary value of a certificate remains dependent on the existence of a valid contractual foundation.

The Court further held that the respondent had raised a bona fide dispute on reasonable grounds regarding both authority and certainty of essential terms. In relation to authority, the respondent’s sole director squarely denied signing or authorising the agreement. Although the applicant argued that the documents emanated from the respondent’s offices, that services had been rendered and accepted, and that part-payments had been made from time to time, the Court held that these considerations did not permit the respondent’s version to be rejected on the papers.

Nyathi J specifically referred to the principles set out in Plascon-Evans Paints Ltd v Van Riebeeck Paints [3] and held that the respondent’s version could not be rejected as far-fetched or untenable.

The Court also rejected the applicant’s reliance on section 20(7) of the Companies Act 71 of 2008, which permits a person dealing with a company in good faith to presume that the company has complied with all formal and procedural requirements. While the Court accepted that this may be a relevant consideration at the level of “commercial probability”, it nevertheless found that the issue of authority remained genuinely disputed on the papers.

Equally significant was the Court’s treatment of vagueness and certainty of contractual terms. The respondent argued that the alleged agreement failed to specify either a fixed rental amount or an ascertainable mechanism by which the rental could be determined. The Court found that this was not a contrived defence. Instead, it constituted “a substantive contractual contest unsuited to motion liquidation proceedings”.

The judgment repeatedly emphasises the limited role of winding-up proceedings in the resolution of contractual disputes. Nyathi J noted that winding-up proceedings are not designed to resolve material disputes concerning the existence of indebtedness and reaffirmed that where a debt is bona fide disputed on reasonable grounds, the creditor’s remedy lies in action proceedings.

Perhaps the most striking passage in the judgment appears in paragraph 19, where the Court stated that contested issues of authority, contract formation, and essential terms should be ventilated by way of action proceedings “with oral evidence and discovery, not the blunt instrument of corporate death by winding-up”.

That phrase captures the policy rationale underpinning the Badenhorst principle. Liquidation proceedings carry severe commercial consequences and are not intended to operate as procedural leverage in ordinary commercial disputes.

Notably, however, the Court stopped short of criticising the applicant’s conduct as abusive or vexatious. Nyathi J accepted that the applicant had relied on a documentary trail, invoices, and a certificate of balance, “often invoked in commerce”. The Court accordingly refused to grant punitive costs and instead ordered costs on the ordinary party-and-party scale.

The judgment serves as a timely reminder that creditors considering liquidation proceedings must carefully assess the underlying contractual foundation of their claims before invoking the insolvency process. Disputes relating to authority, contract formation, certainty of essential terms, or enforceability may well render liquidation proceedings inappropriate, even where invoices have been rendered, services performed, and partial payments made.

For insolvency practitioners and commercial litigants alike, the judgment is a reaffirmation that the Badenhorst principle remains firmly embedded in South African insolvency law, and that the courts will continue to guard against the use of winding-up proceedings as a substitute for ordinary action proceedings.

[1] Maralco Business Advisors CC t/a Maralco Plant Services v GMK Civils (Pty) Ltd (2026) ZAGPPHC (20 April 2026).

[2] Badenhorst v Northern Construction Enterprises (Pty) Ltd 1956 (2) SA 346 (T).

[3] Plascon-Evans Paints Ltd v Van Riebeeck Paints[3] (Pty) Ltd 1984 (3) SA 623 (A).

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“It is only the inner sanctum of a person, such as his/her family life, sexual preference and home environment, which is shielded from erosion by conflicting rights of the community.” Constitutional Court of South Africa, Bernstein and Others v Bester NO and Others (1996)

The Information Regulator’s 2025/26 Annual Performance Plan (APP) signals a firmer enforcement posture under the Protection of Personal Information Act 4 of 2013 (POPIA) and a drive to modernise the Promotion of Access to Information Act 2 of 2000 (PAIA), with immediate implications for governance, breach reporting, direct marketing, access-to-information workflows, and cross‑border transfers.
In short, businesses should expect more proactive audits and higher expectations on PAIA compliance; mandatory e‑portal use for breach notifications; tighter direct marketing controls following the April 2025 POPIA Regulations amendments; and new guidance and a sectoral code in the pipeline, including a Guidance Note on cross‑border transfers and a Code of Conduct for “gated access” environments. The Regulator intends to initiate PAIA legislative amendments in the 2025/26 period to strengthen its regulatory toolkit, while Parliament’s Committee has indicated it is awaiting broader POPIA and PAIA amendment proposals. As of 5 May 2026, organisations should prioritise closing PAIA/POPIA process gaps, preparing for sector‑focused scrutiny, and aligning cross‑border practices to forthcoming guidance.

The APP foregrounds five developments that are immediately decision‑useful for boards and executive compliance teams.

• First, the Regulator will initiate a PAIA amendment process in 2025/26 to enable it to issue regulations, modernise PAIA for the digital era, and strengthen enforcement, with the Committee explicitly signalling it awaits broader POPIA/PAIA amendment proposals; in practice, this points to a near‑term policy window in which the Regulator’s formal powers to steer PAIA compliance could expand.
• Second, the Regulator will intensify security compromise (breach) oversight by consolidating technical and legal capacity and by requiring breach notifications via its eServices portal, which has been mandatory since 1 April 2025.
• Third, direct marketing compliance moved decisively in April 2025, when amended POPIA Regulations took effect, requiring recorded telemarketing calls, strengthened consent workflows, multi‑channel objection mechanisms, and clarified complaint handling; these measures raise both operational and audit-readiness expectations.
• Fourth, the Regulator will publish a Guidance Note on transborder transfers and develop a Code of Conduct for processing at gated accesses, with a draft code to be finalised during the next cycle; these instruments will standardise expectations on cross‑border diligence and curb over‑collection at estates, offices, and retail sites.
• Fifth, enforcement trends already show a willingness to impose administrative fines and to litigate strategic questions, with significant matters in education, justice, health, local government and direct marketing, alongside an uptick in own‑initiative PAIA inspections and active use of non‑compliance notices.

Legislative reform signals for POPIA and PAIA – The Regulator’s plan to amend PAIA in 2025/26

The APP records the Regulator’s intention to initiate legislative amendments to PAIA during the 2025/26 performance period to empower it to develop and issue PAIA regulations, modernise the statute for a digital environment, and strengthen the Regulator’s enforcement powers under PAIA. This is framed as necessary to respond to persistent low compliance rates with statutory reporting and to align access‑to‑information practice with contemporary processing realities. The envisaged amendments would, if enacted, give the Regulator clearer rule‑making competence and sharper compliance levers, moving PAIA closer to the more mature sanctioning architecture already present in POPIA.

The Portfolio Committee on Justice and Constitutional Development has stated it is awaiting the Information Regulator’s submissions on amendments to the protection and access frameworks, indicating parliamentary openness to receiving consolidated proposals covering both POPIA and PAIA. This point underscores that any legislative programme will traverse the Department of Justice and Constitutional Development (DoJ&CD) channels and the normal Cabinet and parliamentary processes, with timelines therefore contingent on executive scheduling and legislative load. From a planning perspective, businesses should assume that a first tranche of proposals could be tabled shortly, with promulgation dependent on parliamentary prioritisation, and should consider making readiness assessments against the likely contours of a strengthened PAIA enforcement toolkit.

Interaction with the April 2025 POPIA Regulations amendments

While not a primary legislative change, the amended POPIA Regulations commenced on 17 April 2025 and have immediate effect on operational compliance. The amendments clarify objection and correction/deletion pathways, allow multi‑channel submissions, formalise timeframes, strengthen consent for direct marketing, and require records of telemarketing interactions to be retained and provided on request, while also refining Information Officer responsibilities and complaint handling. These changes materially raise the standard for complaint-readiness, direct marketing governance and evidence‑keeping in both public and private bodies. The Regulator has already flagged direct marketing as an area where it seeks definitive jurisprudence, including whether live telemarketing falls within POPIA’s “electronic communications” rule, reinforcing that enforcement test‑cases are part of the strategy to stabilise interpretation.

POPIA–PAIA misalignment: tensions and practical implications – Enforcement asymmetry and reporting deficits

The APP and parliamentary reporting highlight a structural gap: PAIA compliance is “honoured in breach rather than in compliance,” with only 278 of 853 public bodies submitting PAIA annual reports in 2023/24 (approximately 33%), and private body reporting compliance even lower. This enforcement asymmetry is sharpened by POPIA’s more developed sanctioning regime and active use of infringement notices, compared to PAIA’s historically weaker remedial mechanisms. The Regulator’s stated legislative intent is therefore squarely aimed at closing this gap. In practice, this means businesses can expect more frequent own‑initiative assessments and site inspections under PAIA, focusing on manuals, request processing records, refusal-ground application, and annual reporting discipline, alongside corrective directions and potential follow‑on enforcement.

Process friction: request forms, manuals and data subject access

The Regulator has formally cautioned that use of repealed PAIA “Form A” is non‑compliant; requests must be made on a form substantially corresponding to “Form 2” under the 2021 PAIA Regulations, and organisations should align manuals, request workflows and public‑facing materials accordingly. Inspectors have been testing websites and internal repositories for outdated artefacts and for incomplete section 17 registers, with findings leading to remedial action. The Regulator also expects organisations to publish a clear, internal process for data subject access under POPIA and to harmonise this with PAIA request handling so that data subjects receive a coherent experience and records are complete for audit and complaint defence.

Following the 2025 POPIA Regulations amendments, objection and correction/deletion requests may be made through a broader range of channels and without strict reliance on prescribed forms, provided the form used is substantially similar; this flexibility demands that Information Officers and service teams maintain robust intake, logging, and 30‑day outcome communication controls that mesh with PAIA timeframes and records‑management duties. The Regulator has reiterated that, notwithstanding trimming of Regulation 4 references, organisations remain responsible for up‑to‑date PAIA manuals that reflect POPIA commencement and the 2021 PAIA Regulations, and that manual currency is tested during inspections.

Breach reporting workflow and e‑portal dependencies

Since 1 April 2025, all security compromises must be reported via the Regulator’s eServices portal and no longer by email, a process change intended to improve triage and monitoring. This requirement, coupled with the Regulator’s consolidation of POPIA legal and IT expertise for breach matters, raises the bar for incident response readiness, including portal user provisioning, template data completeness, and parallel victim‑notification content and timing. With 2,374 security compromises reported in 2024/25 and a 40% year‑on‑year increase in monthly notifications in early 2025/26, the Regulator has publicly pressed organisations to invest in technical and organisational security measures and to ensure timely, accurate notifications to both the Regulator and data subjects.

Enforcement track‑record to date and priorities for 2025/26 – Sanctions, litigation and sectoral signals

The enforcement picture is now textured by both administrative fines and strategic litigation. The Department of Justice and Constitutional Development received a R5 million infringement notice in 2023 after non‑compliance with an enforcement notice linked to a 2021 ransomware incident; this is being challenged in court. This case underscores the Regulator’s willingness to deploy the upper tier of administrative sanctions and defend them judicially. In education, the Regulator issued an enforcement notice prohibiting publication of matric results in newspapers on privacy grounds and followed with a R5 million infringement notice for non‑compliance, before the High Court set aside the notices; the Regulator has applied for leave to appeal, which keeps compliance obligations live pending the appellate outcome and demonstrates an appetite to crystallise POPIA principles through precedent.

At the municipal and private‑sector level, the Regulator has imposed administrative fines on Blouberg Municipality (R500,000) for unlawful online disclosure of an employee’s personal information and on FT Rams Consulting (R100,000) for non‑compliance with an enforcement notice in a direct marketing matter; both unpaid fines have prompted recovery proceedings, signalling follow‑through. Lancet Laboratories paid a R100,000 infringement notice after failing to notify both the Regulator and affected data subjects of security compromises, highlighting the Regulator’s focus on breach notification failures in health‑adjacent processing. The Regulator has also settled a high‑profile transparency dispute with WhatsApp over its 2021 privacy policy update, securing commitments to enhance information for South African users and seeking to make the settlement an order of court, an example of negotiated compliance outcomes in platform contexts.

In PAIA enforcement, the Regulator has issued notices compelling disclosure in matters such as Swartkops Sea Salt, with litigation pending, and has broadened use of non‑compliance notices to drive procedural discipline, including correct form usage and manual currency across sectors. This, combined with public notices to Information Officers and a growing cadence of own‑motion assessments, indicates that PAIA oversight is shifting from reactive complaint handling to structured, proactive compliance testing.

2025/26 enforcement focus areas reflected in the APP and oversight reports

The APP ties resourcing and indicators to stricter enforcement and modernisation. The Regulator will reconfigure internal units to concentrate technical and legal breach‑handling skills, expand PAIA compliance assessments of public and private bodies, and monitor prior‑year assessment recommendations to closure. These moves are supported by programme indicators that increase targets for own‑initiative PAIA assessments and follow‑up monitoring, and that set timeliness standards for complaints resolution and mediation. In POPIA, indicators include completions of complex and simple complaints within prescribed timeframes and the progression of a Code of Conduct for gated access processing. The focus on “gated access” reflects substantial public concern about over‑collection at secured estates, office parks and retail premises, an area with high visibility and reputational risk for property, retail, and community management sectors.

Forthcoming guidance and codes of conduct – Guidance Note on transborder information flows

The APP confirms that the Regulator will issue a Guidance Note on Transfer of Personal Information Outside the Republic, influenced by instruments such as the AfCFTA Digital Trade Protocol and AU Digital Transformation Strategy, and aimed at empowering responsible parties to conduct cross‑border commerce in a manner consistent with POPIA’s eight processing conditions. This will be advisory but will set out expected diligence, including transfer impact assessment concepts and appropriate safeguard selection. Businesses should therefore anticipate alignment with mainstream international practice, including accountability for ensuring comparable protection at destination.

Given global reference points, organisations should expect the Guidance Note to reflect approaches similar to the EU’s GDPR Chapter V, UK ICO guidance and Canada’s accountability model under PIPEDA, including reliance on contractual safeguards, risk assessments focused on access by public authorities, and enhanced transparency around foreign processing. This comparative perspective is useful for multinational compliance harmonisation ahead of publication.

Code of Conduct for processing at gated accesses

The Regulator will develop a Code of Conduct on the processing of personal information at gated accesses in response to concerns about over‑processing at controlled entry points. The APP sets the 2025/26 output as a draft code developed and approved, with finalisation in 2026/27, providing a clear horizon for stakeholder engagement and internal readiness work. The code will be issued as a Regulator‑initiated instrument, reflecting the intention to standardise proportionality, data minimisation, retention, and security expectations across estates, office parks, campuses and retail sites.

What should be top of mind for business now

Breach readiness and portal compliance

From 1 April 2025, breach notifications must be lodged via the Regulator’s eServices portal; failure to use the portal, incomplete submissions, or delays risk procedural non‑compliance and potential enforcement. With monthly notifications rising by 40% in early 2025/26, boards should satisfy themselves that incident response playbooks embed portal workflows, that user credentials and backups are in place, and that data subject notification templates meet POPIA’s specificity and timeliness requirements.

Direct marketing governance and call recording

The April 2025 POPIA Regulations amendments require strengthened consent artefacts for electronic direct marketing, recorded telemarketing calls with records available to data subjects on request, and multi‑channel, no‑fee objection mechanisms. Organisations should audit consent capture, retention and revocation flows, ensure automated and live telemarketing scripts are aligned, train call‑centre and sales teams, and calibrate complaint‑handling timeframes to the Regulations. The Regulator’s stated intent to test whether live telemarketing is an “electronic communication” under section 69 underscores the need for conservative compliance and robust evidence‑keeping.

PAIA discipline: manuals, forms, registers and annual reporting

Given low sectoral compliance and heightened inspection activity, organisations should verify that PAIA manuals reflect POPIA commencement and the 2021 Regulations, that Form 2 is used consistently for requests, that section 17 request registers are up‑to‑date, and that the PAIA annual report is submitted by the Regulator’s expected window. Parliamentary oversight notes indicate a submission period between 1 April and 30 June for the 2024/25 reporting year, with online submission via the eServices portal and pre‑requisite registration of the organisation and its Information Officer. Where the Companies and Intellectual Property Commission (CIPC) links are used, businesses should be alert to visible non‑compliance flags on public platforms and associated commercial implications.

Cross‑border transfers: anticipate the Guidance Note

Ahead of the Regulator’s Guidance Note, organisations should map cross‑border flows, identify transfer tools in use, and socialise internal expectations that POPIA accountability applies extraterritorially through contracts and oversight of processors. The likely direction of travel mirrors EU/UK practice: adequacy‑style determinations are not in play in South Africa, so emphasis will rest on contractual safeguards, risk assessment of destination regimes, and transparency to data subjects about foreign processing and potential public authority access.

Gated access processing: prepare for a stricter code

Property, retail, education, healthcare and corporate campus operators should monitor the Code of Conduct process and undertake pre‑emptive reviews of entry‑point collection practices, minimising collection to what is strictly necessary, securing storage, shortening retention, and eliminating bulk ID scans and open visitor logs. Early movement here will reduce retrofit cost when the code is finalised and signal good faith in public consultations.

Conclusion

The Information Regulator’s 2025/26 APP and related oversight materials point to an assertive but pragmatic regulatory agenda: enforce where harms are acute or systemic, modernise PAIA so it functions credibly alongside POPIA, and provide guidance and codes to standardise expectations in contested processing environments.

For business, the practical imperatives are clear. Treat PAIA as an enforcement priority, not a formality; institutionalise the April 2025 POPIA Regulations across direct marketing and complaints; operationalise the breach e‑portal; prepare cross‑border frameworks that can absorb the forthcoming Guidance Note; and remediate high‑visibility over‑collection at gates and entry points ahead of the code.

Uncertainty remains around precise legislative timelines, as Cabinet and parliamentary scheduling will drive how quickly PAIA amendments progress, and around how appellate courts will resolve live POPIA interpretive disputes, such as identifiers in result publication and the scope of “electronic communications.” These uncertainties are not reasons to delay compliance investment; rather, they reinforce the need for conservative, well‑documented practices that will survive audit and litigation. Stakeholder engagement opportunities will arise around the Code of Conduct and the Guidance Note, and well‑prepared organisations can help shape workable, sector‑sensitive standards while demonstrating leadership to boards, customers and regulators alike.

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The decision in Wheatley v Commission for Conciliation, Mediation & Arbitration & others (2026) 47 ILJ 997 (LC) provides a pointed reminder of the limits of urgent litigation in the Labour Court, and of the professional obligations resting on legal representatives who invoke it. At its core, the judgment is less about the underlying dispute and more about the disciplined application of procedural principle — and the consequences of departing from it.

The applicant approached the Labour Court on an urgent basis following a ruling by a CCMA commissioner refusing legal representation at arbitration. The relief sought was wide-ranging: the setting aside of the ruling, an order permitting legal representation, the removal of the commissioner, a directive compelling the CCMA to investigate and report to the court, and the remission of the matter for a de novo hearing. But the court found the application to be fundamentally flawed.  First, the relief sought was legally unsustainable. The Labour Court does not determine, at first instance, whether legal representation should be permitted in CCMA proceedings. That discretion is expressly conferred on the commissioner in terms of the CCMA Rules. An attempt to secure such an order directly from the court reflects a misunderstanding of the statutory framework.

Second, the application was procedurally defective. The applicant sought to review and set aside the commissioner’s ruling without placing the record of proceedings before the court, notwithstanding the clear prospect of factual disputes. As the court emphasised, the absence of the record in such circumstances is not a mere technical irregularity, but a substantive impediment to the proper adjudication of the matter.

Third, the choice of remedies was misplaced. Instead of seeking to compel production of the record, the applicant pursued a declaratory order that its absence constituted a “gross irregularity”. The court reiterated that a gross irregularity must arise in the conduct of the arbitration proceedings themselves, not in subsequent administrative processes. Similarly, the attempt to compel the CCMA to conduct an investigation and report to the court was rejected on the basis that the CCMA, as an independent statutory body, must be afforded the opportunity to address complaints through its own internal mechanisms before judicial intervention is sought.

The application for the commissioner’s recusal was equally untenable. No prior request for recusal had been made to the commissioner. More fundamentally, the Labour Court does not have jurisdiction to order the recusal or removal of a commissioner at first instance. Any challenge to a commissioner’s refusal to recuse must arise within the context of a review.

Overlaying these deficiencies was the issue of urgency. The court found that any urgency was self-created. There had been a material delay in launching the application, coupled with an attempt to impose compressed timelines on the respondents — including an organ of state — without proper justification. The court reaffirmed that urgent proceedings are not to be used to circumvent ordinary processes or to place respondents at an unfair procedural disadvantage.

In the result, the court exercised its discretion to dismiss the application, rather than merely striking it from the roll, on the basis that it constituted an abuse of process.

The most significant aspect of the judgment, however, lies in the costs order. The court ordered that the applicant’s attorney pay costs de bonis propriis. While such orders are reserved for exceptional circumstances, the court found that the conduct of the litigation demonstrated a marked degree of incompetence, gross negligence and recklessness, coupled with a failure to properly engage with the applicable rules and legal principles.

The judgment underscores an important professional principle: legal representatives are not passive conduits for their clients’ instructions. They are required to exercise independent judgment and to ensure that proceedings are conducted in accordance with the law and the rules of court. Where this duty is disregarded, the consequences may extend beyond the client to the practitioner personally.

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Digital taxation has moved from policy debate to regulatory reality. Governments across the world are implementing measures aimed at taxing revenue generated within their markets by digital businesses, regardless of their physical presence. These measures, including VAT on electronic services, digital services taxes and withholding-based mechanisms, are changing how digital commerce operates.

The rapid growth of the digital economy has fundamentally altered how goods and services are traded across borders. Businesses can supply digital products, services, and platforms into markets without establishing a physical presence in those markets, thus enabling unprecedented levels of cross-border e-commerce.

While digital taxes are often framed as a fiscal issue, their real impact is commercial. They are reshaping pricing, participation, and competitiveness in cross-border e-commerce markets, with implications for both multinational platforms and local businesses.

The economic logic behind digital taxes

Traditional international tax systems were designed around physical presence. A company paid tax in a country where it had offices, employees or tangible operations. The digital economy disrupted that model in ways that are now well understood, but still not fully resolved.

Social media platforms monetise user data without maintaining local offices. Streaming services generate subscription revenue from users across many countries. Online marketplaces facilitate transactions between buyers and sellers in countries where the platform itself may have no legal entity.

As digitalisation accelerated, governments became increasingly concerned about base erosion and profit shifting, loss of tax revenue, perceived inequities between local and foreign companies, and growing political pressure to tax large multinational technology firms.

Digital taxes have emerged as a response to these concerns. They are intended to both capture revenue and create parity between domestic and foreign businesses. However, in doing so, they inevitably change the underlying economics of how digital services are supplied across borders.

Global context: the OECD framework

The global response to digital taxation has been shaped in large part by the work of the Organisation for Economic Co-operation and Development (OECD).

Through its BEPS 2.0 initiative, the OECD has introduced a two-pillar framework. Pillar One seeks to reallocate taxing rights of large multinationals profits to markets where their goods or services are used, while Pillar Two introduces a global minimum corporate tax rate of 15%.

147 countries have committed to elements of this framework, although implementation remains complex and uneven. In the meantime, countries have continued to introduce unilateral or regional digital tax measures in their own markets.

For businesses, this creates a layered environment: global rules are emerging, but local regimes remain highly relevant and, in many cases, decisive.

The adoption of digital services taxes in Africa

Direct digital services taxes, i.e. turnover-based levies on gross revenue from digital services supplied by non-residents, remain relatively limited in Africa compared to VAT-based approaches.

A few African countries have implemented direct digital service tax regimes, including Kenya, Nigeria, Tunisia, Zimbabwe, Tanzania and Sierra Leone.

However, over 20 African countries have introduced VAT on electronic services supplied by non-resident providers, reflecting a more administratively straightforward first step in taxing the digital economy.

This shows that Africa is not creating a single model of digital taxation, but is rather experimenting with different approaches depending on administrative capacity, enforcement considerations and policy priorities.

The impact on pricing and market dynamics

One of the most immediate effects of digital taxation is on pricing.

Turnover-based digital services taxes, as well as VAT obligations on foreign suppliers, increase the cost of supplying digital services. In most cases, these costs are not absorbed entirely by the platform, but are passed on to consumers.

This is already visible across some digital services. Subscription prices, advertising costs and marketplace commissions are adjusted to accommodate digital service taxes. Although they are commercially rational, they have real implications for how businesses and consumers participate in digital markets.

The result is that digital taxes influence not only government revenue, but also consumer pricing and market demand.

For cross-border e-commerce, the effect is cumulative. Many African businesses rely on global digital platforms to reach their customers, advertise products and manage operations. As platform costs increase, so too does the cost of participating in those markets.

Cross-border e-commerce and structural friction

Digital taxes do more than increase costs. They introduce new forms of friction into cross-border trade.

The defining feature of digital commerce has been its ability to operate across borders with minimal structural barriers. Digital tax regimes are beginning to change that.

As countries introduce VAT, direct digital service taxes and withholding-based taxation of digital services, businesses must navigate:

• multiple tax regimes applied to the same transaction;
• differing definitions of taxable digital services. and
• varying compliance requirements.

This results in a more fragmented and complex cross-border environment.

From adoption to enforcement: evolving digital tax models in Africa

Beyond the question of adoption, a more important development is how digital tax frameworks are evolving in practice.

Across Africa, there appears to be a shift from relatively simple turnover-based models towards approaches that prioritise enforceability and broader jurisdictional reach.

In some cases, this involves expanding the basis on which tax is imposed. For example, Kenya’s transition from a digital services tax to a significant economic presence framework reflects a move from transaction-based taxation to a model grounded in sustained digital participation within the local market. This broadens the scope of taxable activity and introduces greater complexity in determining exposure.

In other cases, the focus is on how the digital tax is collected. For example, Zimbabwe’s move toward a withholding-based model demonstrates a different strategy, i.e., incorporating tax collection within the payment system itself. By requiring intermediaries to collect the tax at the point of transaction, the framework reduces reliance on voluntary compliance by foreign providers and significantly enhances enforcement.

Nigeria’s application of economic presence rules reflects a similar objective of asserting taxing rights over digital activity without requiring physical presence, while Tanzania’s approach demonstrates how existing income tax frameworks can be adapted to capture digital marketplace activity.

From a practical advisory perspective, these developments indicate that digital taxation in Africa has not been static, but is evolving toward models that are both more comprehensive in scope and more effective in enforcement, with direct implications for how cross-border digital services are structured and delivered.

Community and market implications

Digital taxes are often framed as a corporate tax issue. In reality, their effects are felt much more broadly.

Consumers may have to pay higher subscription prices for digital services, increased online advertising costs and, in some cases, reduced service offerings. Where platforms pass on tax costs, the impact is felt directly by users.

Small and medium enterprises are also affected. Businesses that rely on digital advertising, online marketplaces and cross-border platforms may face higher operating costs as platforms adjust pricing in response to tax obligations. At the same time, digital taxes may help level the playing field by reducing advantages enjoyed by large multinational firms.

For governments, digital taxation presents an opportunity to strengthen domestic revenue bases and support broader policy objectives, including infrastructure development and digital inclusion.

At the same time, there are legitimate concerns that these unilateral measures can create trade tensions, introduce compliance complexity and, in some cases, affect investment decisions. In practice, both perspectives have merit, particularly in emerging markets where the balance between regulation and growth is more delicate.

 Balancing competing policy objectives

For emerging markets, the central challenge lies in balancing competing priorities.

Governments want to generate revenue while continuing to attracting investment, support local innovation and ensure that digital services remain affordable and accessible. Digital taxation therefore intersects directly with digital inclusion policy and broader economic development objectives.

In the African context, this balance is particularly important. Digital markets are still developing, and policy choices in this area will have long-term implications for growth and participation.

 Strategic implications

For businesses, the implications are clear. Digital taxes are not limited to large technology companies. They affect a wide range of sectors, including digital advertising, streaming and audiovisual services, gaming and betting platforms, e-commerce marketplaces, SaaS providers and data-driven platforms.

Even in countries without direct digital services tax regimes, VAT enforcement on foreign suppliers has intensified.

At the same time, unilateral digital tax measures, including those adopted in parts of the European Union, have introduced additional complexity for multinational businesses operating across multiple countries.

As a result, digital taxation must be considered as part of broader commercial and regulatory strategy. Pricing, market entry, platform design and transaction structuring all need to take into account the evolving digital tax landscape.

Conclusion

Digital taxation is reshaping the economics of cross-border e-commerce in Africa. While the adoption of direct digital services taxes remains relatively limited, the broader direction of travel is clear.

While the adoption of direct digital services taxes remains relatively limited, the broader trend is clear. African countries are expanding their ability to tax digital activity through a combination of VAT, income tax and withholding-based mechanisms.

For policymakers, the challenge is to balance revenue mobilisation and fairness with the need to promote digital inclusion and economic growth.

For businesses, the implication is that digital tax is not just a peripheral tax issue. It is a central factor in how cross-border commerce is structured, priced and executed.

Understanding and responding to these dynamics will be critical for any business seeking to operate successfully in Africa’s evolving digital economy.

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The case of Babita Deokaran, a senior official at the Gauteng Health Department who lost her life after exposing tender corruption, exemplifies the shortcomings of the current disclosure framework in providing adequate avenues and procedures through which disclosures can be made without fear of retaliation and other forms of reprisal. In response, the Department of Justice and Constitutional Development has prepared the Protected Disclosures Bill, 2026 (“the Bill“) in an attempt to address these shortcomings.

The proposed Bill aims to strengthen protection for whistleblowers, provide adequate procedures through which disclosures can be made, afford employees protection from occupational detriment and other forms of reprisal, provide for the investigation of disclosures, establish a complaints mechanism overseen by a retired judge, and provide amendments to witness protection and legal aid arrangements. In certain circumstances, it permits a court-ordered award to a qualifying discloser in defined circumstances.^[1]

Core procedural requirements and timelines

According to the Bill, an authorised person must, within five days, acknowledge receipt of a disclosure and conduct a preliminary assessment and thereafter decide, within 10 days, whether to investigate or refer the matter to another authorised person. Disclosers must be updated at least every three months. An investigation must be completed within 12 months, subject to a single extension of up to six months granted by a retired judge. Suppression or concealment of evidence by an authorised person constitutes an offence.^[2]

Confidentiality, immunity, and anti-retaliation

The Bill criminalises unauthorised disclosure of a discloser’s identity, permits courts to hear evidence in camera and require redaction of identifying information, and confers civil and criminal immunity where the discloser reasonably believed they were revealing improper conduct. It prohibits occupational detriment for employee disclosers and detrimental action against any discloser or related person, reverses the evidential burden once a protected disclosure and linked detriment are shown, and criminalises retaliation.^[3]

Witness protection, legal assistance & system oversight

The Witness Protection Act applies mutatis mutandis to disclosers and related persons, and courts and tribunals may refer indigent disclosers for legal representation at the state’s expense through Legal Aid South Africa.^[4]

The Director-General must develop and maintain an electronic central database for disclosures and include anonymised disclosure data in the Department’s annual report.^[5]

Incentive Schemes

The Minister of Justice and Constitutional Development, Mmamoloko Kubayi, has stated that the government is cautious about adopting a direct cash rewards system but is open to public proposals. Broader models, including international practices, will be considered during public consultation. As a member of the International Labour Organisation (ILO), it is important for South Africa to consider international labour standards in this respect.

International practices such as qui tam lawsuits could be a suitable model to adopt. Under such lawsuits, private individuals institute legal proceedings on behalf of the state when there is alleged impropriety concerning the submission of false claims to the government.^[6] Qui tam lawsuits under the False Claims Act (“FCA“) in the United States of America allow a party who successfully alleges an impropriety to receive a cash incentive of between 15% and 30% of the proceeds.^[7] In terms of the FCA, when the action is one which the court finds to be based primarily on disclosure of information relating to allegations or transactions in criminal, civil, administrative, or other hearings, the court may award incentives as it considers appropriate, up to 10% of the proceeds.^[8] Any person bringing such an action may additionally receive an amount for any reasonable expenses incurred, including legal fees and costs.^[9] This model is based on the premise that, but for the individual blowing the whistle, the impact and consequential result of the fraud, corruption, or other impropriety would have had more dire consequences had such individual not come forward.

The introduction of awards in the Protected Disclosures Bill relates specifically to convictions of an employer who engaged in prohibited conduct or certain improprieties in the workplace.^[10] In terms of section 18 of the Bill, an individual or individuals may receive up to 25% of the monetary sanctions imposed on the employer if the information disclosed originated from the discloser(s), was not known prior to the disclosure, and proves elements of a criminal or administrative offence which ultimately leads to a conviction.^[11]

Although this is a step forward, the award mechanism is triggered only when an employer is convicted and a monetary sanction is imposed, and eligibility turns on the nature of the discloser and the information rather than on employee status. It excludes individuals who work in the public service, persons in authority in terms of section 34 of PRECCA[12], those who provide information as part of a plea agreement or who were accomplices in the concerned offence, and persons who are law enforcement agents.^[13] These exclusions substantially curtail incentives for many public-sector insiders, including public servants.

The Need for a Specialised Whistleblowing Office

Although the proposed Bill provides avenues on which people can rely to make disclosures, the need for more secure reporting channels is evident in order to enhance the confidentiality and anonymity of bona fide disclosers. The case for a specialised office rests primarily on the advantages of independent system-wide oversight and enforcement. The lack of an independent whistleblowing protective authority or specialist whistleblowing office has been identified by the Active Citizen Movement as a critical gap in the proposed amendments to the disclosure landscape in South Africa.^[14]

Similar to South Africa’s shortcomings concerning the lack of immediate protection and reporting channels available to citizens, the United Kingdom has tabled the Protection for Whistleblowing Bill (Bill 27), which is currently before the House of Lords in Parliament. Bill 27 aims to implement two key changes to the current whistleblowing regulatory framework in the UK: firstly, expanding the protection of whistleblowers beyond workers or persons in an employment relationship; and secondly, providing for a specialised whistleblowers office that deals with complaints and disclosures.^[15]

The proposed “Office of the Whistleblower” would set minimum standards, accredit organisational schemes, provide an independent disclosure and reporting service, issue information and action notices, make redress and interim orders, and impose civil penalties, with appeals to the appropriate tribunal. A comparable institution in South Africa will complement, not replace, the Bill’s framework by enhancing independence, consistency, and enforcement across sectors. A specialised whistleblowers office would broaden the involvement of bona fide disclosers with improved physical and employment protection.

Conclusion

An enhanced disclosure system should result in more disclosures, credible safeguards and possibly reduce the current high levels of corruption. Whistleblowing is an act of constitutional bravery that should be fostered to ensure openness, transparency, and accountability. Time will tell whether the adoption of the Bill’s stronger procedures, protections, oversight, and remedies deliver these aims. The Bill is open for public comment and submissions may be made on its content on or before 14 May 2026.

[1] Section 2 read with Sections 23 and 24 of the Protected Disclosures Bill, 2026.

[2]Section 14(1)-(4), (8)-(11) of the Protected Disclosures Bill, 2026.

[3]Sections 19, 20 and 21(1)-(8) of the Protected Disclosures Bill, 2026.

[4]Sections 22 and 23 of the Protected Disclosures Bill, 2026.

[5]Sections 3(1) and 3(7) of the Protected Disclosures Bill, 2026.

[6] 31 U.S.C. § 3730(b).

[7] 31 U.S.C. § 3730(d).

[8] 31 U.S.C. § 3730(d).

[9] 31 U.S.C. § 3730(d).

[10] Section 18 of the Protected Disclosures Bill, 2026.

[11] Section 18(1) of the Protected Disclosures Bill, 226.

[12] The Prevention and Combating of Corrupt Activities Act 12 of 2004.

[13] Section 18(2) of the Protected Disclosures Bill, 2026.

[14] ACM slams proposed Protected Disclosures Bill 2026 as ‘cold comfort’ for whistle-blowers

[15] Protection for Whistleblowing Bill (HL Bill 27).

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In a recent case, the Competition Tribunal clarified its approach regarding the imposition of conditions for a merger approval relating to the ownership of historically disadvantaged persons (“HDPs“).

1. In terms of the South African Competition Act, a merger must be assessed by the Competition Commission having regard to its effect on competition as well as on certain specified public interest grounds including the effect of the merger on the promotion of a greater spread of ownership and in particular to increase the levels of ownership by historically disadvantaged persons (“HDPs“) and workers in firms in the market.

2. The Commission’s Revised Public Interest Guidelines Relating to Merger Control (“Guidelines“) provide that the Commission considers that merging parties have a “positive obligation” to promote or increase a greater spread of ownership and that the Commission’s analytical starting point is that all mergers are required to promote a greater spread of ownership. The Guidelines state that where a merger does not do so, the Commission will consider ownership remedies.

3. The imposition of ownership remedies is a highly sensitive commercial issue. The approach set out in the Guidelines is very wide and causes uncertainty especially for mergers which do not result in a decrease in (or otherwise negatively affect) ownership by HDPs and workers. Even though ownership conditions are not imposed on all mergers in practice, it is important that the Commission and Competition Tribunal establish clear and certain precedents on ownership remedies.

4. The recent Competition Tribunal decision in the merger involving CP Spruce Holdings, S.C.SP and the Vantive kidney care segment of Baxter International Inc. is helpful. Important facts were –

• The merging parties were based in Luxembourg and the USA and did not have any shareholding by HDPs
• None of the merging parties had any subsidiaries, branches, offices or production activities in South Africa
• Vantive was only active in South Africa through the sale of its products to a third party. Such third party had a 29% HDP shareholding and a Level 1 Broad-Based Black Economic Empowerment rating
• CP Spruce was only present in South Africa through its investment portfolios
• Less than a certain (unspecified and confidential) percentage of Vantive’s global turnover was derived from South Africa
• The merger was a “foreign to foreign” transaction with only a tangential link to South Africa
• No horizontal or vertical overlap existed between the merging parties and the merger raised no competition concerns in South Africa.

In line with the approach set out in the Guidelines, the Commission had requested the merging parties to consider ownership remedies or propose “other equally weighty remedies that would adequately countervail the lack of promotion of ownership by HDPs or workers”. The merging parties however submitted that this was not warranted having regard to the above facts and the Commission found that no further intervention was necessary. The Competition Tribunal agreed with the Commission and did not impose an ownership condition.

5. The above approach of the Commission and Tribunal is to be commended for bringing some certainty to the approach regarding ownership conditions with regard to “foreign to foreign” mergers. Requiring ownership conditions for such mergers is inappropriate.  However the approach to other mergers also needs clarification.  It is instructive that in the CP Spruce/Vantive case, the Tribunal found that the merger would have no “negative effect” on the other public interest grounds set out in the Competition Act.  It accordingly seems inappropriate to require an ownership condition if a merger has no negative effect on ownership by HDPs or workers and this would be inconsistent with the Tribunal’s approach to the other public interest grounds.  Furthermore the Competition Act does not impose a “positive obligation” on merging parties to promote or increase a greater spread of ownership and the Guidelines are not legally binding.

6. Where HDPs or workers sell their shares, HDP and worker ownership will necessarily decrease unless the buyers are HDPS or workers. The 2021 Burger King merger was initially prohibited by the Commission because HDP ownership decreased from 68% to 0%. The merger was subsequently approved subject to a condition that an employee share ownership program would acquire an “effective 5% interest” in the merged entity. Imposing a compensatory ownership condition may however negatively affect the price and the ability of HDPs and workers to exit their investment. Even where HDP or worker ownership decreases, ownership conditions should be carefully considered on a case by case basis and not apply automatically.

7. It is important that merging parties have certainty on the circumstances where ownership conditions may be imposed.  The approach in the Guidelines does not achieve this.  A more nuanced approach to sales by HDPs and workers and clearly excluding “foreign to foreign” mergers and mergers with no negative effect on HDP and worker ownership would greatly assist merging parties (and their advisors) when considering and negotiating their transactions.

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On 17 April 2026, National Treasury and the South African Reserve Bank published the long awaited draft of the replacement to the Exchange Control Regulations, 1961 – the Capital Flow Management Regulations.

The joint media statement  states that the “amendments signal South Africa’s readiness to modernise and adopt a ‘positive bias’ approach to managing cross-border capital flows through fewer transaction pre-approvals, a focus on reporting, the surveillance of high-impact and high-risk crossborder transactions, and the combating of illicit financial flows“.

This is truly a remarkable statement given that the draft regulations largely reflect the current Exchange Control Regulations.

The main differences between the old Exchange Control Regulations and the new Capital Flow Management Regulations are:

1. Inclusion of crypto assets as “capital”, and an expansion of the definition of “capital” generally to include anything of a monetary value except immovable property;
2. Imposition of regulatory obligations on authorised crypto asset service providers;
3. A prohibition on all dealings in crypto assets between residents and non-residents, and a prohibition on dealing in crypto assets generally beyond an unspecified monetary threshold, except where the counterparty is an authorised crypto asset service provider;
4. Increased powers of enforcement;
5. An express provision to impose administrative sections on authorised dealers in foreign exchange and on authorised crypto asset service providers;
6. Inclusion of a framework to formalise exemptions from the draft regulations; and
7. Providing clarity on the criteria and process for regularising non-compliance with exchange controls generally.

Draft regulation 30 deserves special mention as a disappointment. It deals with the regularisation of non-complaince with exchange controls. As is the case with the current Regulation, it requires National Treasury or an authorised person to publish a notice of the types of contraventions that may be regularised. Therefore, the uncertainty regarding when the South African Reserve Bank will accept applications for regularisation of non-compliance or the penalty thresholds, persists.

Another disappointment is the treatment of Crypto assets. The draft regulations do not provide any insight in respect of the treatment of persons who already hold crypto assets acquired in Rand locally or abroad using their authorised foreign funds. These individuals could be subject to significant restrictions on how they buy and sell crypto assets going forward.

The nature of the Exchange Control Regulations currently follows a so-called negative bias approach where all transactions involving foreign exchange, transactions with non-residents and exports of capital are prohibited unless otherwise provided by National Treasury or the Financial Surveillance Department of the South African Reserve Bank (“FinSurv“). Contrary to what National Treasury and the South African Reserve Bank have said the negative bias approach of the Exchange Control Regulations has been carried across to the draft regulations.

Many of these exemptions from the current Exchange Control Regulations are published by FinSurv in circulars and then included in the Currency and Exchanges Manual for Authorised Dealers, which can be found on the South African Reserve Bank’s website. It is expected that the current exemptions will have to be formalised under the new draft regulation 23.

The final regulations will be published after taking into account any comments and National Treasury and FinSurv  will then publish the exemptions to the regulations. The exemptions are currently being considered and are not yet available for comment. It is only once these exemptions are published that we will know if national Treasury and the South African Reserve Bank are serious about modernising the exchange control framework and adopting a positive bias approach to regulating foreign exchange transactions. For now, we can only conclude that the current negative bias approach to exchange controls will remain in the new Capital Flow Management regulations.

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The Minister of Employment and Labour has, in terms of section 6(3) of the Basic Conditions of Employment Act 75 of 1997 (“BCEA”), increased the annual earnings threshold from R261,785.45 to R269,600.90, effective from 1 May 2026. This translates to a monthly threshold of R22,466.67. This means that employees earning above R269,600.90 per annum will no longer be entitled to certain protections contained in the BCEA, unless more favourable terms are provided for in their employment contracts or in applicable collective agreements.

The BCEA is a core feature of South African labour legislation that gives effect to the right to fair labour practices in terms of section 23(1) of the Constitution, and serves to safeguard and reinforce employees’ rights in relation to fair treatment and working conditions. By regulating and establishing rules in areas such as working hours, leave and remuneration, it promotes a productive work environment in which the rights and wellbeing of employees are prioritised.

The BCEA is subject to periodic amendments, including the recent adjustment to the earnings threshold, to reflect changing socio-economic circumstances and developments in the labour market. It is therefore essential for both employers and employees to stay informed about such changes to ensure ongoing compliance. These amendments ensure that the Act remains relevant and continues to provide adequate protection to employees while balancing the operational needs of employers.

The revised threshold affects the application of the following provisions:

• section 9 – ordinary hours of work;
• section 10 – overtime;
• section 11 – compressed working week;
• section 12 – averaging of hours of work;
• section 14 – meal intervals;
• section 15 – daily and weekly rest periods;
• section 16 – pay for work on Sundays;
• section 17(2) – certain protections relating to night work; and
• section 18(3) – pay for work on public holidays not ordinarily worked.

For instance, an employee who was earning above the previous R261,785.45 threshold, and therefore not entitled to overtime pay, may from 1 May 2026 become entitled to additional remuneration for overtime worked if they earn below the new R269,600.90 threshold.

Beyond the BCEA, the threshold has implications for other key labour statues. The Labour Relations Act 66 of 1995 (”LRA”) extends further protection to employees earning below the prescribed earnings, particularly through its deeming provisions. These refer to employees who work in non-standard employment arrangements, such as those employed by labour brokers, also known as temporary employment services, and under fixed-term contracts. Section 198A provides that employees placed by a labour broker to render services to a client may be deemed to be employees of the client if they are not performing a temporary service, such as where the employee works for the client for longer than three months. Section 198B of the LRA further provides that, where there is no justifiable reason for fixing the term of a contract, such employees may be deemed to be employed indefinitely.

In addition to the above provisions, the earnings threshold has implications under the Employment Equity Act 55 of 1998. Employees whose earnings exceed the prescribed threshold may not have disputes under Chapter II of the Act relating to unfair discrimination arbitrated by the Commission for Conciliation, Mediation and Arbitration (”CCMA”), and are generally required to refer such matters to the Labour Court for adjudication. This is subject to limited exceptions, such as cases involving alleged sexual harassment or where all parties consent to arbitration.

Employers are therefore advised to take proactive steps in response to the increase. This includes conducting a thorough review of employee remuneration structures across the workforce, evaluating the status of employees engaged on fixed-term contracts and reassessing arrangements involving labour brokers to ensure complete alignment with the applicable deeming provisions. As a whole, such proactive measures will assist in ensuring compliance with the relevant legislation and in reducing the risk of potential legal and operational complications.

In conclusion, the upward adjustment of the BCEA earnings threshold represents more than a routine annual revision; it has substantive implications for the scope of employee protections under South African labour law. The amendment affects not only the application of core BCEA provisions but also intersects with key protections under the Labour Relations Act and Employment Equity Act. Ultimately, the amendment reinforces the dynamic nature of labour legislation and the ongoing need to balance employee protection with operational efficiency in the modern workplace.

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In the decision of African Banking Corporation of Zambia Limited and Others v Mapula Solutions (Pty) Ltd [1], the Supreme Court of Appeal (SCA) was required to determine whether the Gauteng Division of the High Court, Johannesburg, (High Court) erred in concluding that: (a) African Banking Corporation of Zambia Limited (ABC Zambia), African Banking Corporation of Botswana Limited (ABC Botswana), Standard Chartered Bank Limited – Johannesburg Branch (SCB Johannesburg), and Standard Chartered Bank of Botswana (SCB Botswana) (collectively, the Banks) breached the terms of a Debt Rescheduling Agreement (DRA) concluded with Blue Financial Services Limited (Blue) and Mayibuye Group Proprietary Limited (Mayibuye), (b) the Banks’ conduct caused Mayibuye to suffer a loss, (c) the Banks acted in common purpose, and (d) the Banks should be held jointly and severally liable to Mapula Solutions Proprietary Limited (Mapula).

Factual Background

Blue was formerly listed on the Johannesburg Stock Exchange (JSE) and had various subsidiaries which were involved in the business of micro-lending across 12 countries. Blue and its subsidiaries (collectively, the Blue Group) became financially distressed following alleged mismanagement and fraud committed by the CEO of Blue. With the hope of rescuing the company, Blue solicited bids from companies to assist with restoring its profitability. Mayibuye viewed this invitation as an investment opportunity and successfully submitted a bid to assist with the recapitalization of Blue.

As part of the recapitalization, Mayibuye subscribed for shares in Blue by making payment of an amount of R163 million. Mayibuye, Blue and the Banks (which were some of Blue’s creditors) concluded the DRA in terms of which the Banks agreed to receive payment only in respect of interest and Blue’s capital repayments to the Banks were deferred for a period of three years (Rescheduling Period). In terms of the DRA, Blue was required to collect on its loans and, within ten days of the end of the Rescheduling Period, submit a distribution plan to the Banks detailing the amounts it collected and how such amounts were to be divided among the Banks. If the amounts collected were insufficient to pay all of Blue’s outstanding debts, the Banks were afforded two options. The Banks could either convert their debt into equity or grant Blue an additional 24-month period to collect on its loans following which Blue was required to make payment of the collected amounts in full and final settlement of the debts owed to the Banks. If the amount collected after the 24-month period was still insufficient, the Banks were required to write-off Blue’s debt.

The Rescheduling Period was intended to end on 31 December 2013. However, Blue defaulted on interest payments, resulting in the end date of the Rescheduling Period being 6 September 2013. Blue was therefore required to submit its distribution plan within ten business days from 6 September 2013. Blue failed to do so timeously and instead, it submitted a distribution plan on 13 December 2013 which the Banks (through a committee established in terms of the DRA) objected to due to its non-compliance with the DRA.

As a result of Blue’s non-compliance with the DRA, each of the Banks initiated separate legal processes in various jurisdictions against Blue to recover the amounts owed to it by entities within the Blue Group. Mayibuye claimed that the actions taken by the Banks (i.e. to recover the debts owing by entities within the Blue Group) had breached the DRA and as a result, the recapitalization failed. Consequently, Mayibuye claimed that it suffered a loss of R704 968 234 which amount represented the value of its investment in Blue as at 1 November 2013 or R163 million being the amount which it invested in Blue. Mayibuye ceded this claim to Mapula who successfully sued the Banks in the High Court. The Banks appealed the decision of the High Court to the SCA.

SCA Appeal

The SCA found that the Banks did not act with a common purpose and therefore the finding of joint and several liability was unjustified. In arriving at this conclusion, the SCA took note of the fact that each of the Banks took separate steps and engaged different legal representatives to recover the amounts owed to it by Blue. By way of example, ABC Zambia sent a letter to Blue requiring payment of the original loan on 1 November 2013 (the date on which Mapula alleges the loss occurred). No other bank took such a step on that date which means that the loss had already occurred by the time when ABC Botswana, SCB Johannesburg and SCB Botswana were alleged to have breached the DRA. Furthermore, the SCA found that the High Court erred in analysing the Banks joint and several liability in the context of liability for costs and applying that finding to the Banks’ liability for the loss suffered by Mapula without examining each alleged breach and its consequence to apportion liability.

Secondly, the SCA found that Mapula did not prove any breaches of the DRA by the Banks. Blue did not submit a valid distribution plan within ten days of the end of the Rescheduling Period therefore the obligation for the Banks to make an election in terms of the DRA to convert their debt to equity or to be non-capitalizing lenders was not triggered. The SCA held that Blue’s failure to deliver a compliant distribution plan was fatal to Mapula’s case because as the party whose claim is based on the DRA, it is required to prove its compliance with the DRA. Further, Blue’s failure to comply with the provisions of the DRA entitled the Banks to enforce compliance with DRA which includes realising the security enjoyed under the DRA. The SCA held further that the Banks enforcing their rights under the DRA cannot, at the same time, also constitute a breach of the provisions of the DRA.

Lastly, the SCA held that Mapula did not establish any causation between the conduct of the Banks and the loss suffered by Mapula. Mapula alleged that Blue’s shares were devalued as of 1 November 2013. However, only ABC Zambia requested payment on that date. Mapula claimed that Mayibuye’s investment was devalued when it instituted proceedings in 2016 and yet Mayibuye continued with its attempts to recapitalise Blue up until 2018. It was unclear to the SCA how the letter of demand from ABC Zambia could destroy Blue’s value in light of several other factors which include fraud on the part of Blue’s former CEO and Blue’s inability to produce audited financial statements. Furthermore, the letter of demand had no effect on Mayibuye’s efforts to reinstate Blue’s listing on the JSE, nor Blue’s failure to produce audited group financial statements. According to the SCA, the High Court overlooked these factors and attributed Blue’s demise to a letter of demand instead of the various unsuccessful attempts to recapitalise Blue. The SCA held that the High Court’s finding that the Banks’ conduct destroyed Blue’s share price is unsustainable and the High Court should have dismissed the action.

Concluding Remarks

The SCA held that the none of the High Court’s findings were supported by evidence and the High Court’s failure to analyse whether the alleged breaches by the Banks resulted in adverse consequences for the Mayibuye investment on 1 November 2013 undermined the soundness of its judgment. As a result the Banks’ appeal to the SCA succeeded.

[1] (766/2024) [2025] ZASCA 38 (26 March 2026)

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On 17 April 2026, in Government Notice No. 54520 under Government Gazette 7375, the Minister of Finance (“Minister“) published the draft Capital Flow Management Regulations in terms of section 9(1) of the Currency And Exchanges Act 9 of 1933 (“Draft Regulations“) for public comment.[1]

The Draft Regulations follow the Minister’s 2026 Budget Speech, which announced further exchange control reforms.[2] These reforms aim to bring crypto assets within the capital flows management framework.[3] The Draft Regulations complement two earlier regulatory developments, namely, (i) the Financial Sector Conduct Authority’s declaration of crypto assets as a financial product in General Notice 1350 of 2022 in Government Gazette 47334, and (ii) the inclusion of crypto asset service providers as accountable institutions under Item 22 of Schedule 1 of the Financial Intelligence Centre Act 38 of 2001.[4]

Once finalised, the Draft Regulations shall repeal and replace the existing Exchange Control Regulations published under Government Notice R1111 in Government Gazette Extraordinary123 of 1 December 1961 (“Excon Regulations“).[5]  The Draft Regulations shall have an impact on, inter alios, authorised dealers, crypto asset service providers as well as other affected parties who currently fall within the regulatory ambit of the Excon Regulations.

Importantly, the Draft Regulations, inter alia –

• • provide for a monetary threshold which shall be published by the Minister for transactions regulated by the Draft Regulations,[6] where a transaction/s relating to the purchase, sale, or loan of (i) foreign currency, (ii) gold, and (iii) crypto assets exceeding the value of the threshold ‑
    • may, in respect of the purchase, sale or loan of foreign currency and gold to any person other than an authorised dealer, only be conducted by an authorised dealer;[7] and
    • may, in respect of the purchase, sale or loan of crypto assets to any person other than an authorised crypto asset service provider (“CASP“), only be conducted by an authorised CASP;[8]
  • state that any person other than (i) an authorised dealer, intent on buying, selling, borrowing, or lending foreign currency or gold must apply to an authorised dealer to do so,[9] and (ii) an authorised CASP, intent on buying, selling, borrowing, or lending crypto assets must apply to an authorised CASP to do so;[10]
  • impose purpose-use restrictions and information-furnishing obligations on persons applying to an authorised dealer or CASP to buy, sell, borrow or lend (i) foreign currency, (ii) gold, or (iii) crypto assets (where applicable),[11] to ensure that such foreign currency, gold or crypto assets are not used for any purpose other than the purpose for which they were acquired, as stated in that person’s application to the authorised dealer or CASP;[12]
  • place (i) restrictions on the import and export of currency, crypto assets, gold and securities,[13] and (ii) compulsory declaration requirements for all persons (a) about to enter the Republic of South Africa (“South Africa“) who have currency, crypto assets, securities and gold in their possession and control,[14] or (b) about to enter or leave South Africa, where such declaration is requested by an enforcement officer;[15]
  • allow enforcement officers to search any person and seize articles in that person’s possession if that person (i) denies having any currency, crypto assets, gold or security in their possession, and (ii) is suspected to have such articles in their possession in contravention of the regulations for the import or export thereof;[16]
  • provide for the acquisition by either the National Treasury (“Treasury“), an authorised dealer or an authorised CASP of (i) foreign currency or crypto assets, or (ii) the right to receive payment of foreign currency or crypto assets, the value of which exceeds the monetary thresholds declared by the Minister;[17]
  • place an obligation on all persons in the South Africa that are in possession or control of a foreign asset or crypto asset, to declare such possession or control in writing to the Treasury or an authorised person within 30 days of being in possession of such foreign or crypto asset;[18]
  • restrict the export of capital, where the definition of ‘capital’ now includes crypto assets;[19]
  • allow for the granting of exemption and permissions by the Treasury or authorised person of persons or classes thereof from any of the provisions of the Draft Regulations that may be subject to certain conditions;[20]
  • provide for a controlled accounts regime, under which the Treasury or an authorised person may direct that payments owed by a person resident in the South Africa to a non-resident creditor (where such payments are precluded by the Draft Regulations) be paid into a controlled account opened with an authorised dealer or the Corporation for Public Deposits;[21]
  • restrict dealings in securities belonging to non-residents by, inter alia, prohibiting the acquisition, disposal, transfer or nomination of controlled securities (being securities registered in the name of, owned by, or in which a non-resident has an interest) without the permission of the Treasury or an authorised person;[22]
  • prohibit dealings in bearer securities and bearer options, including the acquisition, disposal, issuance and payment of dividends or interest in respect thereof, without an exemption or permission from the Treasury or an authorised person;[23]
  • control the issue of capital (which includes the raising of capital in the South Africa by the issue of securities, loans repayable by the issue or transfer of securities, and municipal borrowings) by prohibiting any issue of capital exceeding the determined threshold during any 12-month period without an exemption or permission from the Treasury or an authorised person;[24]
  • require that transactions with a branch or subsidiary of a business controlled from outside the South Africa be treated as if the branch or subsidiary were a separate person resident in the South Africa, subject to the same duties and obligations under the Draft Regulations;[25]
  • empower the Treasury or an authorised person to impose administrative sanctions on authorised dealers or authorised CASPs for non-compliance, including financial sanctions, public reprimands, suspension or revocation of appointments, disqualification of directors and senior management, restrictions on transactions, and orders to take remedial action;[26]
  • confer broad powers on the Treasury or an authorised person to attach money, crypto assets and other property, block accounts, and issue forfeiture orders in respect of suspected contraventions of the Draft Regulations, subject to compliance with the Promotion of Administrative Justice Act 3 of 2000;[27]
  • create criminal offences for, inter alia, contraventions of the Draft Regulations, non‑compliance with any notice, order, permission, exemption or condition, obstruction and the making of false statements, with penalties including a fine not exceeding R1,000,000 and/ or imprisonment for a period not exceeding 5 years;[28] and
  • provide for administrative relief, under which the Treasury or an authorised person may authorise the regularisation of contraventions of the Draft Regulations through a voluntary disclosure process, subject to conditions including the payment of levies or administrative penalties.[29]

Comments on the Draft Regulations are to be submitted on or before 18 May 2026.[30]

[1]        See the Draft Regulations available on https://www.treasury.gov.za/public%20comments/CapFlow/ (accessed on 21 April 2026).

[2]        See paragraph 1 of Exchange Control Circular No. 3 of 2026 published by the South African Reserve Bank on 3 March 2026, available at https://www.resbank.co.za/en/home/publications/publication-detail-pages/circulars/exchange-control-circulars/2026/excon-circ-3-2026 (accessed on 20 April 2026).

[3]        See page 5 of Annexure A of Exchange Control Circular No. 3 of 2026.

[4]        See page 5 of Annexure A of Exchange Control Circular No. 3 of 2026.

[5]        See section 32 of the Draft Regulations and the joint Media Statement published by the National Treasury and the SARB on 17 April 2024, available at https://www.resbank.co.za/en/home/publications/publication-detail-pages/media-releases/2026/capital-flow-comment (accessed on 20 April 2026).

[6]        See section 31 of the Draft Regulations.

[7]        See section 2(1) of the Draft Regulations.

[8]        See section 3(1) of the Draft Regulations.

[9]        See section 2(4) of the Draft Regulations.

[10]      See section 3(4) of the Draft Regulations.

[11]      See sections 2(4) and 3(4) of the Draft Regulations.

[12]      See sections 2(5) and 3(5) of the Draft Regulations.

[13]      See sections 4 and 5 of the Draft Regulations.

[14]      See section 5(1)(a) of the Draft Regulations.

[15]      See sections 4(2) and 5(1)(b) of the Draft Regulations.

[16]      See sections 4(3), 4(5), 5(1)(c), 5(2) and 5(3) of the Draft Regulations.

[17]      See section 8 of the Draft Regulations.

[18]      See section 10 of the Draft Regulations.

[19]      See the definition of ‘capital’ in section 1, section 12 and 17 of the Draft Regulations.

[20]      See section 23 of the Draft Regulations.

[21]      See section 6 of the Draft Regulations.

[22]      See section 15 of the Draft Regulations.

[23]      See section 16 of the Draft Regulations.

[24]      See section 17 of the Draft Regulations.

[25]      See section 18(1) of the Draft Regulations.

[26]      See section 21 of the Draft Regulations.

[27]      See section 24 and 25 of the Draft Regulations.

[28]      See section 29 of the Draft Regulations.

[29]      See section 30 of the Draft Regulations.

[30]      See the joint Media Statement published by the National Treasury and the SARB on 17 April 2024.

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