1. South Africa country update - 2019
Kathleen van der Linde

2. Consumer credit market in South Africa
March 2017: million credit active consumers
9.69 million impaired records, adverse listings, judgments etc (39.3%, decreased to just over 38% in 2018)
No access to other procedures
Unconstitutional? Discrimination on socio-economic grounds
May 2019: Unemployment rate 27.6%
Labour force decreased by in first quarter of 2019

3. Existing debt relief for consumers
Sequestration
Only measure providing discharge
Advantage to creditors
Sufficient assets to meet costs and make some payment
Administration order
Total debts under R50 000
Repayment plan – hugely inefficient
Debt review
Rescheduling of credit agreements
Reckless credit can be discharged

4. Debt intervention proceeding (NINA debtors)
New amendments to the National Credit Act (NCA)
(awaiting presidential signature)
will apply for 48 months only (re-assessment)
Qualifying consumers
Total unsecured credit (under NCA) under R50 000
No income or average gross monthly income over past 6 months under R7500
Over-indebted
Not sequestrated or subject to administration order
Procedure
Apply to National Credit Regulator for referral to National Credit Tribunal
If qualifies, determines whether able to pay off within 5 years
5-year re-arrangement if possible
otherwise debt intervention mm
Only relevant for ‘regulated companies’
Therefore narrower relevance than fundamental transactions
Aims to give shareholders access to equal information and to prevent minority shareholders from being locked in after a takeover
Two types of takeovers:
‘Friendly’ takeovers – board is convinced that it is in the best interest of the company, shareholders agree, usually takes the form of a scheme of arrangement or a statutory merger
Hostile takeovers – board opposes the offer, offeror must approach shareholders without the company’s cooperation to sell shares to it

5. Tribunal – debt intervention
12-month suspension of credit agreements
Financial literacy training
Restriction on new credit
Position re-assessed after 8 months
5-year plan if now possible
Further 12 month suspension
After second period of suspension
Court can extinguish qualifying debt
Factors considered:
Vulnerable debtor
Debt relief history
Circumstances and conduct relating to the credit provided
Conduct of credit provider