/ 13 January 1995

Winds of change rattle the Bar

The legal profession, viewed with scepticism by the public, is in need of transformation, reports Dennis Davis

WHILE 1994 brought about a legal revolution, the legal profession showed itself ill-prepared for these momentous changes.

By the end of the year, numerous constitutional judgments had been delivered by the supreme court and, with few exceptions, the results have been appalling. Most judges appear to treat the constitution as if it were just another piece of legislation, few understand the implications of constitutional review for a political democracy, and many of the complex issues contained within the Bill of Rights have been subjected to almost cavalier treatment.

If the position is disturbing at the level of the supreme court, the performance of the magistracy is even worse. Hopefully, the Legal Forum which has been convened by the Department of Justice will ensure the transformation of magistrates’ training programmes and encourage coherent systematic constitutional courses for the judiciary.

Judges will doubtless point to the quality of argument which has been presented to them as a mitigating factor in so far as criticism of their judgments is concerned. In this they are correct. Again, with few exceptions, it would appear that the judiciary has had to battle with under- researched arguments which have only made its job more difficult.

Within this context, it is extraordinary the way the established profession grimly holds on to the values and outlook of the past. This has been particularly clear in its attitude to the appointment of judges and the procedures adopted by the Judicial Service Commission. A number of practitioners have said that, were hearings of the JSC to be public, members of the Bar would not stand for office. So, the cloistered and unaccountable ethic of the Bar is translated into our public life. Thus the JSC held its hearings in secret when it came to the appointment of supreme court judges. Consequently, rumour-mongering is rife and dissatisfaction abounds.

It is now speculated that the JSC might change its mind and hold public hearings before it recommends further appointments. But no television or radio coverage will be permitted. The tendentious reason for this approach is that television will only offer sound bites and this will be unfair to candidates. But if we have to suffer hours of Trevor Quirk and Keppler Wessels surely there can be no reason why the public broadcaster, the SABC, cannot devote at least a few hours a day to covering the hearings on television and radio. By doing so it will contribute to the legitimacy of the judiciary (as the hearings clearly did in the case of the Constitutional Court) and will assist in the legal education of the public.

I wonder whether the legal profession is aware of the extent to which citizens are sceptical of its performance. I have been surprised on the occasions I have participated in phone-in radio programmes on the law at how many people, particularly black South Africans, justifiably resent the skewed racial and gender composition of our courts. Yet, as a senior practitioner told me it is unlikely that appointments to the AD will come from anywhere else other than the ranks of the judges of the supreme court. If this is true, it will mean that for years only white males will sit on our highest court — the chief justice, as chair of the JSC, owes us an explanation.

If true, this claim is made even worse by the performance of the Apellate Division, particularly in major matters of democracy such as freedom of speech. In this area, the AD, under the leadership of Judge Michael Corbett, has been no better than its predecessors and in certain cases even worse.

In its zeal to transform the legislature and the executive, the government should not forget the least dangerous but perhaps most important branch of government.

BUSINESS

Knives are out at Finance Week

Jacques Magliolo reports on the battle for control of local business magazine Finance Week

The takeover battle for control of local business magazine Finance Week is far from over, “even if I’m forced out at the next shareholders’ meeting”, swears present editor Alan Greenblo. He threatens that “if I go, I will take all key editorial and advertising staff with me”.

The fight for complete control of the only substantial English-speaking financial journal independent of the two big newspaper groups could finally cause its death.

A supreme court interim order last month placed a freeze on a block of shares controlled by Greenblo, which instantly shifted power to shareholders Richard Rolfe and Lynne Hill, claimed by Greenblo to be acting on behalf of her husband, Oliver Hill. Hill, who Greenblo has often referred to in Finance Week as “Fat Ollie”, is wanted in South Africa on foreign exchange fraud charges. With a majority stake in the magazine, Rolfe and Hill immediately called for an extraordinary shareholders’ meeting on February 8, where they “promised to remove Greenblo as editor”.

There are therefore few alternatives left for Greenblo and fellow director Ronnie Taurog in the next three weeks. It seems that all options are linked to ongoing negotiations with Euromoney Publications, a UK-based financial magazine.

Greenblo says: “One alternative is to effect a buy-out of Finance Week with the help of Euromoney before the shareholders’ meeting.” Another is to proceed with the planned joint venture with Euromoney with the co-operation of Rolfe and Hill.

Given the animosity between the parties, both options seem remote.

In fact, Moss Morris lawyers, who are acting on behalf of Rolfe and Hill, say: “Our clients have indicated that they do not want Greenblo to remain on as editor.”

The lawyers say that their clients “intend to recapitalise the company through a rights issue or by finding another partner” to maintain the firm as a going concern. They add that “negotiations with a number of firms, including Euromoney, are still under way”.

The mystery deepens. When Greenblo is asked what he means when he says that this is the start of a war and not the end, he intimates that he has already negotiated a deal with Euromoney to set up a local branch of the UK publication using Finance Week staff.

Greenblo says: “I can’t speak for Euromoney, but they are supportive of me. They have said that they are keen to enter our market and that they still want to do a deal with me.”

The only other alternative is for Greenblo to accept he will be forced out and to wait for the trial to reconvene to hear oral evidence. If the court finds that Greenblo and Taurog acted in good faith two years ago when they allotted Finance Week shares to Gauteng-based radio station 702, then the block of shares controlled by Greenblo will be unfrozen and controlling power will return to him.

The sale of 702 shares to Greenblo came “at the insistence of 702, when expected synergies did not materialise,” says Greenblo. “Given this fact, there is no way that the court will not find that we acted bona fide,” he says.

“If I’m kicked out and the court does maintain that we conspired to enforce control, then the consequences for Finance Week can only be guessed at,” says Greenblo, who is an old hat at fighting for control. In fact, there is absolutely no love lost between Greenblo and his former co- founder Rolfe.

In 1978, Greenblo, Rolfe and Stuart Murray founded the magazine. Nine years later, Greenblo initiated a proxy fight and finally forced his co-founders out.

Rand Merchant Bank had agreed to underwrite a rights issue for three years in favour of Greenblo, forcing out Rolfe and Murray. Rolfe left the service of the company, but vowed to fight back.

Problems came three years later when Greenblo could not take up his option to buy the RMB shares. Instead of buying the shares, he approached Trust Bank, which funded the “warehousing of the shares on behalf of the Duros Group,” he says.

The Duros Group then changed its name to Tolgate Holdings and was later placed into liquidation. The shares once again came up for sale and a host of companies, including Times Media Limited, made a strong bid for control of Finance Week.

“To take the heat off the battle, we pointed out to the liquidators that we had the right to refuse a transfer of the shares,” says Greenblo. The offer was made to all existing shareholders on a pro-rata basis and, in this manner, Greenblo was able to retain control.

However, one of those existing shareholders was radio 702, which also took up its rights, thus increasing its control to 28,2 percent. Greenblo has a 14,5 percent stake and the Finance Week Trust, which was set up for the staff and is completely controlled by Greenblo, holds 10,6 percent.

Greenblo had aimed to hold the trust and 702 shares, which — together with his own — meant that he controlled more than 54 percent of the entire issued capital.

Now, he faces a meeting with the trust and 702 shares frozen, leaving him with little power to stop being forced out. Even his claimed leverage over key staff was called into question this week, with the announcement that Finance Week deputy editor Howard Preece is to join the new Argus Business Report as a columnist.