National Gambling Amendment Bill: hearings

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Trade, Industry and Competition

13 September 1999
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Meeting Summary

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Meeting report

13 September 1999


Documents handed out:

North West Provincial Government
American Chamber of Commerce in South Africa
Sunwest International and Grand Parade Investments
Culemborg Empowerment Consortium
Mallinicks Attorneys on behalf of Culemborg Metropole Casino (Pty) Ltd.
Association of German Speaking Companies in Southern Africa
Akani Fairest Cape (Pty) Ltd

Joint chairpersons: Dr R Davies and Mr M Moosa.

Several organisations presented submissions on the National Gambling Amendment Bill to the committee.

North West Provincial Government
Adv Jakat, Chief State Law Advisor, said that he has confidence in government and that government will be able to pass laws that are in the interest of the people.

Questions from members
Mr Moosa (ANC) : When exactly was the North West Development Corporation (NWDC) converted into a (Proprietary) Limited?
Response : During February 1999

Dr Davies (ANC) : Are you suggesting that if the position remains the way it presently stands, the courts will interpret the March 1999 amendment including the NWDC?
Response : It goes further than that, applications for gambling licenses are pending in different provinces and therefore different interpretations could be made in the different provincial courts, whether present legislation includes the NWDC or not. With this amendment we want to avoid this by creating clarity and removing all doubt.

Ms C September (ANC) : In your presentation you make mention of "discriminatory situation", what exactly is meant by this?
Response : The North West Province is not the only province that was to be affected by the March amendment, but also the Eastern Cape. Now should this amendment not be passed, the Eastern Cape will still fall under the March amendment in that it will allow them till May 2003 to sell shares, whereas the NWDC would be forced to sell its shares and consequently only the North West province will suffer.

American Chamber of Commerce
Mr Simon Steward, Director of the American Chamber of Commerce, made the presentation on behalf of his organisation.

Questions from members:
Mr Davies (ANC) : Do you not accept that the amendment is primarily to benefit the North West province and secondly the bidding? If the NWDC had shares in Culemborg and not SunWest would you be interested as well?
Response : The same principle remains and it is not a question of who wins bidding, but whether the grounds are fair. It does not matter whether it is an American company bidding. I understand the purpose of the amendment, if legislation is passed retrospectively the whole bidding process would be affected.

Mr Moosa (ANC) : I agree that retrospectivity is bad. The legislature had intended that corporations such as NWDC are entitled to hold onto shares until May 2003. Legislation now intends to correct something that happened that was not foreseen, which is the conversion into a (Pty) Ltd. What is your opinion in this regard?
Response : When we talk about retrospectivity, it causes uncertainty in the minds of foreign investors. We understand what the intention of the law makers was at the time, but we are concerned about the retrospectivity as it does create uncertainty.

Sunwest International and Grand Parade Investments
Mr H Adams, Deputy Chairperson of SunWest International and Grand Parade Investments, made the presentation on behalf of his organisation. Mr B Cooper, Judicial Manager of NWDC, said that the reason why the NWDC was converted into a company is that it was not doing well and therefore there was a general feeling that it must be placed under judicial management, and in order to do that it had to be converted into a company. NWDC hold 49% of the shares in Sun International Holdings (Pty) Ltd, which in turn owns 48% of the shares in Sunwest. If this amendment is not passed it does not mean that Sunwest is disqualified, but rather that NWDC would have to sell shares in Sun Holdings. The problem does not lie in the actual selling of the shares, but rather that only a fraction of the value of the shares will be received because NWDC would be forced sellers.

Questions from members
Mr S Rasmeni (ANC) : Is the Amendment Bill as it stands satisfactory and will it cover the intention of the March amendment, and will it ensure that you will not approach parliament again? Why was there a technical oversight?
Response : The Amendment Bill as it stands is satisfactory and will cover the intention of the March amendment. During the drafting of the March amendment, the drafters were not aware that the NWDC was converted into a company and therefore did not make provision for this situation.

Mr Moosa : How is it that when the Amendment was processed it was not checked for technicalities?
Response: The technicality is not a glaring error, but rather an aspect of interpretation.

Culemborg Empowerment Consortium
Mr Richard Kawie presented the submissions of Culemborg Empowerment Consortium.
Questions from members
Ms September (ANC) : How is it that the passing of this amendment will prejudice your company? Is it not unfair to say to this committee that government must hop around to suit you whenever the need arise?
Response : Firstly, the people I am representing will suffer. No gain or prejudice. The Act is clear that government cannot participate in this area and therefore changes should not be made to suit the government interests. Secondly, I am not suggesting that government must hop around, but rather that the matter be deferred and proper investigations be made.

Mr Moosa (ANC) : The amendment says that government must sell by May 2003, what is your objection?
Response : The objection is that should this amendment be passed and just before May 2003 the share price is similar to what it is now, will the Committee be approached again to push forward the date.

Culemborg Metropole Casino (Pty) Ltd
Mr Breytenbach, an attorney from Mallinicks Attorneys, presented on behalf of Culemborg Metropole Casino (Pty) Ltd.

Questions from members
Mr Moosa (ANC) : In your presentation you have given four reasons for opposing this Bill, why was this not challenged at the time when the Committee was considering the March amendment? Why should we give you a "second bite at the cherry"?
Response : Our client's attitude is that the earlier amendment did not affect its position adversely as the NWDC did not fall within the scope of that amendment. Because of legal advice the attitude was that SunWest was disqualified as it had a state stakeholding. Should the NWDC be included in the scope of the earlier amendment then our client had overlooked an opportunity to make representations at that time. Our client would have made representations earlier this year if there was an awareness that the NWDC was included in the scope of the amendment.

Association of German Speaking Companies in Southern Africa
Mr Jaeckel, presented on behalf of his organisation.

There were no questions for Mr Jaeckel and the meeting was adjourned.



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