Alexkor Limited Amendments Bill:Deliberations & Adoption

Meeting report

PUBLIC ENTERPRISES PORTFOLIO COMMITTEE
12 September 2001
ALEXKOR LIMITED AMENDMENT BILL: DELIBERATIONS AND ADOPTION

Chairperson: Mr B Martin

Documents handed out
Alexkor Limited Amendment Bill [B 29-2001]

SUMMARY
The committee adopted the Bill without amendments.

MINUTES
Mr Martins asked if the Department had considered any amendments to the Bill.

Mr Denzil Matjila (Legal Counsel: Department of Public Enterprises) replied that the Department has not seen any need to revise the Bill or incorporate any changes. The Department had tried to respond to the concerns of all stakeholders at the hearing the previous week.

At Mr Martins's request, the Department went through the Bill. Mr Matjila explained that Section 4 of the Alexkor Limited Act No116 of 1992 provides that, if the Minister desires to dispose of any shareholding in Alexkor he has, in consultation with the Minister of Finance, to meet certain conditions:
- Such a sale or disposal of shares in Alexkor can only be done through a listing process.
- The shares need to be sold at a market related price.
- A share incentive scheme needs to be established whereby shares can be allocated to the employees of the company in accordance with the rules of the Johannesburg Stock Exchange.
- No person shall hold, directly or indirectly, more that 20 per cent of the issued share capital of the company be incorporated in the Memorandum and Articles of Association.

It has become necessary to amend Section 4 due to Alexkor's peculiar circumstances and problems with it running at a loss. Under the circumstances, it was necessary that these conditions be removed and the government be given the flexibility to restructure the Alexkor mine as it deems necessary. The company is not even ready for the option of being listed on the stock exchange although one cannot discount that listing might become an option in the future.

Section 4 of the principal Act is amended to the effect that the Minister of Public Enterprises may, with the concurrence of the Minister of Finance, sell or otherwise dispose of shares in the company to any person. If there are any conditions as to shareholding that need to be observed, such conditions must be determined by the Minister subject to approval by Cabinet.

Mr Andile Nkuhlu (Chief Executive: Restructuring of State Assets, Dept of Public Enterprises) added that the Bill seeks to give Cabinet the flexibility and space to determine what is the appropriate response to the current situation. The current Act restricts the Department only to a single option which is not even a real option considering the current impasse at Alexkor. The Bill creates the space for the Cabinet to determine an appropriate option.

The reason behind the non-amendment of any section of this Bill by the Department was that most of the matters that had been raised by the stakeholders were outside the scope of the Bill. The issues relating to the social impact to the community are policy matters which are not covered in the Bill. These issues will be covered in the briefing to the Committee when the Department presents the actual restructuring plan for Alexkor Limited.

Mr Martins proposed that the Bill be considered clause by clause.

Clause 1
No amendments - agreed.

Clause 2
No amendments - agreed.

Clause 3 / Memorandum
No amendments - agreed.

The Memorandum of Desirability of desirability was read:
It is in the opinion of the Committee that the legislation is desirable to amend the Alexkor Limited Amendment Act of 1992 so as to provide afresh for the sale or disposal of shares held by the state in Alexkor Limited and to provide for matters connected therewith.

Committee Report
The Portfolio Committee on Public Enterprises, having considered the Alexkor Limited Amendment Bill, National Assembly, section 75, referred to it and classified by JTM as a section 75 Bill reports the Bill without amendments.

All committee members unanimously agreed.

The meeting was adjourned.