Legal fight at Free Market Foundation pits its chair against president

A funder of the Free Market Foundation (FMF) has gone to court to contest the legality of the organisation's board, which was appointed last year.

The application by Michael Hull has exposed possible infighting by board chairperson, former judge Rex van Schalkwyk, and the foundation's co-founder and president Leon Louw.

Van Schalkwyk, in his response to Hull's application, alleged that Louw was behind the application by Hull. Louw has denied that allegation.

Hull approached the Johannesburg high court in August challenging the legitimacy of the board  of the FMF, arguing that it was improperly constituted. The matter revolves around a meeting on July 29 last year at which a new board was supposed to be elected. 

Hull said by the time the voting took place, the meeting was no longer in session. He said that, accordingly, the election of the board was unlawful and a nullity. He said the effect of this was that no new board was elected at the 2020 AGM and that the board that was in place before the July 2020 meeting remains the operative board of the FMF.

“The risks, reputational or otherwise, associated with the FMF carrying out its objectives while operating under an illegitimate board have far-reaching implications,” Hull said.

Van Schalkwyk, who deposed an answering affidavit on behalf of the board, asked the court to dismiss Hull's application with a punitive cost order.

He said the review application was brought far too late — outside the 180 days allowed by law —  and that there was a reconciliation in the board, which rendered Hull's application moot.

Van Schalkwyk said he believed Louw was the driving force behind the application by Hull and that Hull was acting as Louw's proxy in the application.

Van Schalkwyk detailed efforts by what he referred to as the “Stratcom group” headed by Louw, whose aim was to appoint what he referred to as an “exclusive” board of seven members, as opposed to an inclusive board of 15 members.

Van Schalkwyk alleged that on March 19 last year, after he had been appointed as CEO of FMF, Louw told a board member that he wanted a board of his choice at the 2020 AGM that would be supportive of his role as CEO.

Van Schalkwyk stated in his affidavit that the board member — who resigned in April this year — alleged that a WhatsApp group was created by Louw in April last year to arrange for the takeover of the board and to co-ordinate activities pertinent to the 2020 AGM.

Van Schalkwyk said on the day of the election on July 29, an exclusive “board” of seven was announced unlawfully  as an elected board.

Van Schalkwyk said at the September 3 2020 meeting of the exclusive board, two board members proposed a resolution to include all 15 legitimately elected board members on the board.

The vote went against the two board members.

Van Schalkwyk said at a meeting on September 24 last year, the former board chair Ayanda Khumalo and former deputy chair Robert Wasserman announced a board of 15 elected members.

Van Schalkwyk said the inclusive board of 15 met for the first time on September 29 last year.

“This was the first official meeting of the new board of the FMF elected at the 2020 AGM.”

He said in the months after the announcement of the inclusive board, all members of the exclusive “board” have on more than one occasion attended board meetings.

Louw denied the allegations made against him by Van Schalkwyk and denied he had done anything irregular or improper. Louw said he was one of the respondents in the application by Hull.

“I am not behind it [Hull's application]. It is not my case,” Louw said.

Louw said he will file an answering affidavit before court to address Hull's application and to respond to allegations made by Van Schalkwyk.

TimesLIVE