Kukama V Lobelo

Question 1

Kukama V Lobelo issue?

Answer 1

• Duty to disclose information to board
• Breach of Fiduciary
• Wilful misconduct
• breach of trust
• Directors delinquency

Question 2

Kukama V Lobelo legislation

Answer 2

S22
S76(2)
S76(3)
S77(3)
S162(5)

Question 3

S22

Answer 3

Prohibits reckless trading

Question 4

S76(2)

Answer 4

a) prohibits a director from abusing their position to gain advantage or to cause harm to the company.
b) mandates a director to communicate as early as possible any information that comes to the directors attention.

Question 5

S76 (3)

Answer 5

A director must perform functions of a director :
A) in good faith
B) in the benefit of the company
C) degree of care, skill and diligence

Question 6

S77 (3)

Answer 6

Imposes liability on a director for any less damages for actions which they
A) lacked authority to do
B) is prohibited by S22 or is fraudulent

Question 7

S162 (5)

Answer 7

Court must declare a person a delinquent director if the person is guilty of the above mentioned provisions.

Question 8

Kukama V Lobelo Judgement

Answer 8

Lobelo has allowed money owed to Company A to be paid to an account other than that of Company A.
Failed to detect fraud to SARS.
Failed to Alert Kukama of the fraud.
Lobelo declared a delinquent director.
Order of delinquency renders it unnecessary to remove director. (as delinquency declaration already removed them)