Section 228 of the Companies Act 61 of 1973 provides that, notwithstanding anything contained in its memorandum or articles, the directors of a company shall not have the power, save with the approval of a general meeting of the company to dispose of -
- the whole or substantially the whole of the undertaking of the company; or
- the whole or the greater part of the assets of the company.
The burning question that begs an answer is whether dispose of
as referred to in the said section includes a mortgage bond. Should one read the Afrikaans text, it refers to 'vervreem', which according to our common law includes a mortgage bond
(see Foley's Trustees v Natal Bank
1882 3 NLR 26 and Ex parte De Jager
1926 27 NLR 413.
As the English text of the Act was signed it is submitted that dispose of does not include a mortgage bond. It is thus opined that when registering a mortgage bond, the required resolution is not peremptory.
Readers' views on this will be appreciated - Editor