A summary of this committee meeting is not yet available.
TRADE AND INDUSTRY PORTFOLIO COMMITTEE
18 August 2004
COMPANIES AMENDMENT BILL; MADRID PROTOCOL AND GENEVA ACT OF THE HAGUE AGREEMENT: ADOPTION
Chairperson: Dr R Davies (ANC)
Documents handed out:a
TRADE AND INDUSTRY PORTFOLIO COMMITTEE
Companies Act 63 of 1973
Companies Amendment Bill [B10-2004]
Alterations to the Companies Amendment Bill proposed by the Department
Department PowerPoint presentation on Hague and Madrid Systems
The Department briefed the Members on the proposed alterations to the Companies Amendment Bill, after which the Committee discussed various concerns, including issues surrounding the "notification of shareholders." The Committee voted to pass the Bill with amendments and recommended that the House approve ratification of the Madrid Protocol and Geneva Act of the Hague Agreement.
In response to some Members' dissatisfaction that they were not adequately informed about upcoming legislation - particularly covering credit law reform, company law reform and consumer law -, the Department reported that they would be hosting a workshop involving international experts on 22 September. The Chairperson stressed that the Committee needed to tighten up its lines of communication with the Department and the Ministry.
Mr Moeletsi (Department Chief Director: Policy and Legislation) indicated that the DTI had considered the Committee's proposals of 11 August, 2004, and had prepared some amendments to the Companies Amendment Bill. Mr Strydom (Department Chief Law Advisor) then briefed them on the proposed alterations and apologised that the documentation was not made available earlier. Please see amendment document attached.
Prof B Turok (ANC) noted that the Department had not taken the Members concerns regarding the protection of whistleblowers and the definition of "uncertified" into account.
Mr M Stephens (UDM) enquired why sequestration should disqualify individuals from operating in a management capacity, and whether it was feasible to demand that such individuals be held liable for debts incurred by a business.
Mr L Labuschagne (DA) suggested that the Bill include a provision stipulating that, in the event of misdealings by a company director, that company should be required to notify its shareholders.
Mr Moeletsi indicated that while not all the Committee's concerns expressed in previous meetings had been attended to in the proposed amendments, the Department was preparing a presentation on company policy for August 20 to address most of these points.
Mr M Netshitenzhe (Department Law Advisor) explained that the protection of whistleblowers was dealt with by other legislation and added that, as stakeholders had various avenues through which they could access information, a provision concerning notification was not required. The Department understood the implications of the clause pertaining to sequestration, but their intention had been to promote an ethic of responsible corporate governance.
Mr Labuschagne commented that many ordinary citizens did not have access to adequate information and the Department should ensure that their interests were safeguarded.
The Chairperson asked why the Department could not redraft the Bill to accommodate all the Committee's concerns.
Mr Moeletsi pointed out that although the Amendment Bill could be redrafted, many of Member's queries related to broader concerns that would be addressed in the forthcoming departmental presentation on company policy.
Mr Strydom questioned whether it would be onerous for a company with a delinquent director to be compelled, by way of a statute, to notify its shareholders.
The Chairperson approved the amendments but asked the Department to revise the Bill incorporating the Committee's views on the notification of shareholders.
Professor Turok urged that, as Members had other business to attend to, the Committee pass the Bill immediately.
After brief consultation with the Department, the Committee agreed to pass the Bill with the following addition to Clause 3 (d) (cc) (ii): "the company shall in writing notify its shareholders of such notice within a period of sixty days from receipt thereof."
Mr Maake (ANC) asked whether there should be a provision requiring that companies also notify their directors.
Mr Strydom responded that directors of companies were usually shareholders and otherwise the directors would be notified by way of a resolution of the respective companies' management boards.
The Committee then moved that the revised Companies Amendment Bill be presented to the House with a recommendation for adoption. They also agreed that, having considered the Madrid Protocol and the Geneva Act of the Hague Agreement, it recommended their ratification by the National Assembly.
Professor Turok expressed concern that Parliament had not been properly informed about the drafting of the proposed Consumer Credit Bill legislation.
Mr Moeletsi indicated that the Department had planned a workshop involving international experts but that due to a delay by Cabinet in approving the Bill, the workshop had been rescheduled for 22 September. The Chairperson stressed that the Committee needed to tighten up its lines of communication with the Department.
Mr Moeletsi pointed out that the previous Chairperson had been informed on the process and added that the Department would provide the current Committee with updated information concerning forthcoming Bills, including those dealing with credit law reform, company law reform and consumer law.
Ms B Ntuli (ANC) emphasised that the Department should make drafts of the proposed legislation available to the Committee. The Chairperson commented that the Committee had not yet met with the Ministry.
The meeting was adjourned.