Companies: How private are shareholders’ details?

A2B“Privacy, like other rights, is not absolute. As a person moves into communal relations and activities such as business and social interaction, the scope of personal space shrinks” (Extract from judgment below)

All companies – big and small, public and private – must keep registers of their shareholders and directors.   And, as the SCA (Supreme Court of Appeal) made clear recently, even “private” companies’ registers aren’t private at all.

An investigative journalist digs for detail

A financial journalist, investigating a controversial investment scheme, was tasked with investigating the shareholding structures of three companies.

The companies refused him access to their securities registers and he approached the High Court for assistance.

The companies asked the Court to exercise a discretion to refuse such access, and in hearing an appeal around this issue, the SCA has clarified the public’s rights as follows –

  • The public at large (including the media) have an unqualified right to inspect or copy those registers on payment of a statutory fee.
  • The motive of the person seeking access is totally irrelevant; nor does he/she have to show that the request is “reasonable”.
  • It is not necessary to comply with the requirements of PAIA (the Promotion of Access to Information Act)  although of course PAIA can be a useful tool to force access to company documents other than these registers.
  • It is a criminal offence for a company to refuse such access or to “otherwise impede, interfere with, or attempt to frustrate, the reasonable exercise by any person” of these rights.

So what shareholder information is public and what is confidential?

A shareholder is only required to provide –

  • His/her name,
  • His/her business, residential or postal address, and
  • “An identifying number that is unique to that person”.

The shareholder can also voluntarily provide an e-mail address.

Confidentiality can be claimed – by either the company or the shareholder – for the e-mail address (if supplied) and for the identity number.  Names and addresses are public, full stop.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Employees: Are your social media posts private?

A1BOur courts have made it clear that posting derogatory or damaging comments about your employer or colleagues on social media can amount to misconduct and result in disciplinary action, perhaps even dismissal.

A recent High Court decision, although it concerned a members’ dispute rather than a disciplinary action, highlights a particular danger in this regard: Your Social Media posts aren’t necessarily as private and hidden from your employer’s prying eyes as you think they are.

A hunter hunted – illegally

  • A fall out between the two members of a close corporation resulted in the minority member, who was employed by the CC as a professional hunter and safari guide (let’s call him “the employee”), leaving the business for a rival venture.
  • He however remained a member of the CC, presumably to avoid breaching a restraint of trade clause in his employment contract.  This turned out to be a crucial factor in his downfall, because as a member he still had a fiduciary duty to act honestly and in good faith in relation to the CC and to avoid conflicts of interest with it.
  • The other member, in hunting (online in this instance) for confirmation of his suspicions that the employee was trying to steal business from the CC, unlawfully accessed his private Facebook page.  Posts on the page indeed proved that he had set up a hunting business in opposition with the CC, had actively sought to entice the CC’s clients to hunt with him, and had been disparaging of the CC and the other member.
  • The employer applied to court to interdict the employee/member from continuing with this clear breach of his fiduciary duties, and the Court had to decide whether or not to allow into evidence printouts of the illegally-obtained Facebook posts.  Without them, it seems, the employer would have had no case, so unsurprisingly the employee’s legal team fought long and hard to have them struck out.

No place to hide – be careful what you post!

The Court however allowed the Facebook printouts into evidence and granted the interdict against the employee, holding that

  • Accessing the employee’s Facebook account without his permission was indeed both
    • Unlawful, to the extent even of being a criminal offence in terms of the Electronic Communications and Transactions Act (which prohibits any unauthorised access to or interception of “any data” – in this case the CC had illegally accessed the Facebook page via another employee’s knowledge of the password); and
    • A breach of the employee’s fundamental constitutional right not to have his right to privacy, including the privacy of his communications, infringed.
  • Critically however, unlawfully obtained evidence will not necessarily be excluded by a court.  Instead, the court has a discretion whether or not to allow it after considering “all relevant factors” such as
    • The extent of the infringement of the other party’s rights,
    • The nature and content of the evidence concerned,
    • Whether any attempt was made to obtain the information lawfully,
    • “The idea that ‘while the pursuit of truth and the exposure of all that tends to veil it is cardinal in working true justice, the courts cannot countenance and the Constitution does not permit unrestrained reliance on the philosophy that the end justifies the means”.
  • In this case the employee’s duplicity was “compounded by the fact that he had denied that he was acting in this way and had also undertaken not to do so”.  His conduct, said the Court, “ought to be exposed and ….. he ought not to be allowed to hide behind his expectation of privacy: it has only been invoked, it seems to me, because he had something to hide”. 

The bottom line – our fundamental rights to privacy, as much in cyberspace as in the real world, are by no means absolute.  Be careful what you post! 

Employers: What about you? 

This case is by no means carte blanche for hacking into your partners’ or employees’ Social Media pages.  Quite the contrary; online hacking is unlawful with potentially serious consequences in the criminal, civil and labour courts.  All it illustrates is that in certain specific circumstances, workplace wrongdoers will find nowhere to hide in our privacy laws. Have in place an employee Social Media policy and take full advice on your specific circumstances.

For more advice and practical solutions you are welcome to contact our Employment Law (link) or Intellectual Property & Information Technology Law (link) departments.

© DotNews, 2005-2016. This newsletter is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omission. (E&OE)