IN THE MATTER OF INVESTEC PLC

The company sought sanction under section 899 of the Companies Act 2006 for a scheme of arrangement and confirmation under section 648 (read with section 641 et seq.) of a reduction of its share premium account by £251 million to effect a distribution of Ninety One shares to Investec shareholders. The court applied the well-established fourfold test for sanction hearings: statutory compliance, proper class constitution and representation, whether an intelligent and honest member might reasonably approve, and absence of any blot on the scheme. The court was satisfied that the convening decision of Bacon J had been correctly made, that the scheme meeting passed the requisite majorities, that the scheme document properly explained the proposals, and that creditors would not be prejudiced (the no real likelihood test under section 646(1)(b) having been addressed by the earlier order). Accordingly the court sanctioned the scheme under section 899 and confirmed the reduction of the share premium account under the Companies Act.

The claimant, Investec plc, applied for two principal orders: sanction of a scheme of arrangement under section 899 Companies Act 2006 and confirmation of a reduction of its share premium account under section 648/section 641 et seq. The scheme implements part of a distribution to Investec shareholders of shares in the Ninety One group following a demerger, with a ratio of 0.13751 Ninety One shares for each Investec ordinary share and cash payment for fractional entitlements. Because both Investec and Ninety One operate as dual‑listed structures across the UK and South Africa, the scheme provides for UK‑registered Investec plc shareholders to receive Ninety One plc shares by way of a capital repayment on reduction of the share premium account, while South African‑registered Investec shareholders receive Ninety One Limited shares via a dividend in specie from Investec Limited.

The procedural background included a convening hearing before Bacon J on 15 March 2022 at which class composition was determined and a directions order by Deputy ICC Judge Greenwood on 6 May 2022 in respect of the capital reduction resolution; the scheme meeting and a shareholder general meeting were held on 28 April 2022 and passed by the requisite majorities. No objectors appeared at the sanction hearing.

The court framed the issues as: (i) whether statutory requirements had been complied with; (ii) whether the class summoned was properly constituted and fairly represented; (iii) whether an intelligent and honest member might reasonably approve the scheme; and (iv) whether there was any blot on the scheme. The court concluded that each criterion was met: the scheme document and notices complied with the statute, the convening decision under the Practice Statement was sound and no objectors appeared, the scheme had a clear commercial explanation and purpose, the majorities at the meeting were achieved, and the capital reduction did not prejudice creditors (the earlier order addressing the no real likelihood test was not impugned). The court therefore sanctioned the scheme under section 899 and confirmed the share premium reduction under the Companies Act. The judgment also noted a longer than usual interval between sanction and effectiveness to accommodate Johannesburg Stock Exchange settlement requirements but saw no objection to that timetable.

The court sanctioned the scheme of arrangement under section 899 Companies Act 2006 and confirmed the reduction of the share premium account under the Companies Act (section 648 read with section 641 et seq.). The court was satisfied as to statutory compliance, proper class composition and representation (upholding Bacon J's convening decision), that an intelligent and honest member might reasonably approve the scheme, and that there was no blot on the scheme; creditors would not be prejudiced and the capital reduction met the statutory requirements.