The Flowers of Progress: Corporations Law in the Colonies

Abstract

In the British colonies from the latter part of the nineteenth century, one of the major indicia of whether a colonised economy was modernised was the presence of company laws modelled on the English Companies Act. This paper examines the manner in which, during the colonial period, companies legislation in a number of colonial locales was often highly politicised rather than being apolitical in nature. It is little noted in histories of companies law that in the colonies the legislation often had special provisions inserted to accommodate special circumstances existing in particular colonies. The presumed apolitical nature of companies laws is belied by practices such as typing companies by race in South Africa and, due to a distrust amongst colonists of indigenous Indian directors, the use of the managing agent system in Indian companies law up to the time of independence. This paper also examines the responses of indigenous political and business leaders to companies at the time of decolonisation. Of particular interest are the attitudes of these leaders to the possible effects of this introduced legislative regime on traditional business structures, and also their possible concerns as to the potential this legislation might hold for foreigners being able to acquire significant influence locally through large shareholdings in local companies. In this respect, the paper particularly focuses on Basutoland/Lesotho and the manner in which the introduction of modern companies laws was discussed at the moment of decolonisation. The paper then traces the manner in which those laws have influenced subsequent economic developments in Lesotho, and the salience or otherwise in hindsight of local leaders comments on the legislation at the point of decolonisation.