DOJ wrong about Yengeni - Tim Harris

DA MP says the dept has misunderstood the Companies Act

Yengeni Directorships: DA asks for Justice Minister to appear before Parliament to explain his department's breach of the Companies Act

In reply to a Parliamentary question [on Friday] the Department of Justice has admitted that they did not send a copy of the judgment associated with the fraud case of Mr Tony Yengeni to Cipro. This means that they have may have seriously breached the requirements of the Companies Act.

On Friday I wrote to the Chair of the Portfolio Committee of Trade & Industry to request that the Minister of Justice, Mr Jeff Radebe, appears before the committee - at the earliest opportunity - to explain this apparent breach. In addition, my colleague Dean Smuts MP, the DA Justice Spokesperson, will approach the Chair of the Justice committee to request that the Minister also appears before that committee on the matter.

Section 218 of the Companies Act of 1973 states that anybody convicted of theft, fraud, forgery or perjury is to be disqualified from being a director of a company. In addition, subsection 1A clearly requires the Department of Justice to "send a copy of the relevant order or particulars of the conviction, as the case may be, to the Registrar of companies". Importantly, it specifies that this needs to occur for all of the convictions listed in subsection 1 (d) (iii) - which includes fraud and theft - and clearly covers Mr Yengeni's specific conviction.

Unfortunately, the department appears to be in complete denial of their responsibilities under the law.  In the reply to my question the Minister claims that there is "no statutory obligation" on the department to send through the judgement, when clearly there is.

He bases this on an opinion that Section 218 "deals with civil actions" when it seems obvious that its intention is to prevent those with criminal convictions - such as Mr Yengeni - from serving as directors.  At worst, such a reply may constitute a deliberate misleading of Parliament.

While we welcome the department's commitment that the Regional Heads of the Department of Justice and Constitutional Development have been requested to put in place measures to provide Cipro with court information, this does not absolve them of their failure to process Mr Yengeni's conviction. 

Their wholesale dereliction of their duty to implement section 218 (1A) of the Companies Act allowed Mr Yengeni to retain potentially lucrative directorships and to establish new directorships. I have been advised by the South African Police that their investigation into these directorships is continuing.

Statement issued by Tim Harris, MP, Democratic Alliance shadow minister of trade and industry, December 5 2010

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