OBLIGATIONS OF NEW OWNER AFTER 197 TAKEOVER

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    Ivan Israelstam
    Spectator

    Corporation A is an international group that contains several companies, each registered as separate legal entities. Corporation A acquires Company B as a going concern in terms of section 197. Company B is based in South Africa, is registered as a legal entity under the Companies Act and provides products and services that Corporation A also provides.
    Subsequent to the section 197 takeover, Company B, while retaining its legal registration, closes one of its departments and commences section 189 consultations with the affected employees. Company A has no suitable positions for said employees. Is Corporation A, as the party that took over Company A under 197, obligated to offer to the affected employees of Company A suitable vacant posts existing in the group’s companies owned by Corporation A? Please provide reasons for your answer and cite relevant case law.

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