Posted: 24 July, 2025 Filed under: Siyabonga Nyezi | Tags: Companies Act, Companies Act of 2008, constitution, Ndamase v Commissioner: Private Inquiry into the affairs of SNS Holdings (2023-019694) [2024] ZAGPPHC 407, religious institutions, right to freedom of belief, right to freedom of conscience, right to freedom of opinion, right to freedom of religion, SNS Holdings (Pty) Limited, South Africa
Author: Siyabonga Nyezi
University of the Witwatersrand
The Constitution of South Africa confers upon all people the right to freedom of conscience, religion, belief, and opinion. It is unlikely that, when drafting section 15 of the Constitution, the legislature contemplated that this right would make its way into disputes relating to the regulation of companies. The facts in the recent case of Ndamase v Commissioner: Private Inquiry into the affairs of SNS Holdings (2023-019694) [2024] ZAGPPHC 407 put to bed any doubts in that regard. My reflections on this decision in this article examines the limitation of human rights by the provisions of section 417.
This case, where the applicant invoked the right to freedom of religion as a response to a summons, relates to section 417 of the Companies Act of 1973. Section 417 empowers the High Court or the Master of the High Court to convene an inquiry into the affairs of a company in liquidation. It further empowers the commissioners appointed in such an inquiry to summon any person who may have information about the affairs of the company, which may be helpful in protecting the interests of creditors, shareholders and authorities alike.
Section 417(1), which remains in force even after the Companies Act of 2008 came into effect, provides that
‘In any winding-up of a company unable to pay its debts, the Master or the Court may, at any time after a winding-up order has been made, summon before him or it any director or officer of the company or person known or suspected to have in his possession any property of the company or believed to be indebted to the company, or any person whom the Master or the Court deems capable of giving information concerning the trade, dealings, affairs or property of the company.’
While section 417 might more obviously affect the right to privacy and the right not to be compelled to give self-incriminating evidence, this article zeroes in on the rare intersection between the Companies Act and the right to religious freedom, invoked by the applicant in response to a summons issued in terms of section 417. Specifically, the article probes whether the limitation of a right – in this case, the right to religious freedom – is justifiable in the context of the objectives of section 417.
Between 2019 and 2020, an entity known as SNS Holdings (Pty) Limited (‘SNS’) operated the ‘business’ of a pyramid scheme, and fleeced investors out of over R600 million. Some of its shareholders brought a liquidation application against SNS, seeking to recover their monies. SNS was eventually placed in final liquidation, and an inquiry into its affairs was established by the High Court.
The liquidators found that SNS, prior to its liquidation, had paid over R8 million to Joshua Iginla Ministries NPC (‘JI’), and another R6 million to Champions Royal Assembly NPC (‘Champions’), which carried on business as churches. The applicant, a director of both JI and Champions, would later claim that the payments by SNS to JI and Champions, purportedly religious institutions, were donations made as acts of worship. Further investigation revealed that JI and Champions subsequently paid the applicant amounts in excess of R1 million. The liquidators suspected the probable source of these payments to be the ‘donations’ from SNS. The liquidators summoned the applicant to appear before the inquiry as a person ‘believed to be indebted to the company’ and/ or ‘capable of giving information concerning the trade, dealings, affairs or property of the company’, as contemplated in section 417.
The applicant objected, pleading, among other reasons, that ‘the summons were a violation of his right to freedom of religion, in that a donation made at a church is universally considered ‘an act of worship’. The applicant, in line with his claim that the payments made to Champions Royal and JI were acts of worship, asserted that the directors of SNS (a Mr and Mrs Sibiya) were exercising their religious rights in making these payments. The court found this argument to have no merit, and held as follows
‘As to the issue of religious freedom, the applicant states in the founding affidavit that the investigation was sparked by the donations which the Sibiyas made to the church […].The argument seems to be that the Sibiyas exercised their religious rights by making donations to the church as an act of worship. I fail to see how, on the facts, the inquiry and the summoning of the applicant as a witness, may constitute an infringement of the Sibiyas’ rights to freedom of religion.’
Whether the provisions of section 417 meet constitutional muster, insofar as they may have affected the applicant’s right to freedom of religion, has to be determined by examining how they fare against the ‘rubric’ set out in section 36 of the Constitution. Section 36, known as the limitation clause, provides for the limitation of a right, taking into account relevant factors, including the nature of the right, the importance of the purpose of the limitation, the nature and extent of the limitation.
First, it is trite that certain rights are deemed ‘too personal a fundamental right to be ceded.’[[1]] The right to freedom of religion is an example of one such right and is thus incapable of transfer. The applicant could not, in response to a summons issued to him, invoke the alleged violation of the Sibiyas’ right to freedom of religion as his own defence. Secondly, in any event, the donations had been made by SNS, and not the applicant or the Sibiyas. Third – and most relevant – even if it were true that section 417 engaged the applicant’s right to freedom of religion, this defence would still not succeed. It is only against the bona fide usage of a right as a defence that the constitutionality, or possible lack thereof, of the limitation of that right should be evaluated.
While the applicant fell well short of this standard, Ndamase raises a question of whether such limitation is indeed constitutional. In answering this, regard must be had to case law relating to the purpose of section 417. The case of Bernstein v Bester (CCT23/95) [1996] ZACC 2 is instructive in this regard. In Bernstein, the Constitutional Court held that
‘The public’s interest in ascertaining the truth surrounding the collapse of the company, the liquidator’s interest in a speedy and effective liquidation of the company and the creditors’ and contributors’ financial interests in the recovery of company assets must be weighed against this peripheral, infringement of the right…’
While the above remarks were made in relation to the right to privacy, the court in this case adopted the same approach to the right to religious freedom, ultimately dismissing the application. In the wake of recent liquidations with profound consequences, like Steinhoff and VBS Mutual Bank, it is imperative that the law enables liquidators to conduct investigations aimed at mitigating shareholder and creditor losses. Rulings such as the one in Ndamase are a reaffirmation of the principle that public interest outweighs what the court in Bernstein referred to as a ‘peripheral infringement’ of a right. The right to freedom of religion is no exception.
[1] Nxumalo SB ‘When are personal rights too personal to be ceded? – University of Johannesburg v Auckland Park Theological Seminary 2021 JDR 1151 (CC)’ (2022) 43(1) Obiter 617.
About the Author:
Siyabonga Nyezi is an Attorney of the High Court of South Africa, and a Master of Laws candidate at the University of the Witwatersrand.
