Companies Amendment Bill: DA welcomes DTI's concessions
The Democratic Alliance (DA) welcomes the broad range of concessions from the Department of Trade and Industry (DTI) on the Companies Amendment Bill. The department has shown a willingness to accommodate a range of proposals from the business sector, as well as from the National Treasury and SARS.
In particular, we appreciate the proposed delinking of access to company registers from the Promotion of Access to Information Act. This will help to protect transparency and accountability in our corporate sector.
We also welcome the DTI's acknowledgement that a convicted fraudster should be disqualified from acting as a director of a company even if he or she is the sole shareholder. This concession represents a significant tightening of the proposed law and a step back towards the protections offered in the current Companies Act.
We are still deeply concerned about the time period for disqualification of a convicted director, which the draft law still sets as five years, despite the current legislation prescribing permanent disqualification subject to judicial review. If the bill is not amended, then, under the new Companies Act, a convicted fraudster like Tony Yengeni would today automatically be free to legally assume company directorships, given that more than five years have passed since his conviction
We have additional concerns about the department's refusal to acknowledge the banking sector's unease about the cost of allowing symbols in company names - estimated to be around R100m per bank - and their general lack of willingness to tighten up definitions in the bill which may prejudice ordinary businesses as well as regulators.
Our major remaining concern is around the readiness of Cipro to accommodate and enforce the law if it comes into force on the 1st of April. Cipro officials have given their word that they will be ready, but with bad news about Cipro's institutional soundness piling up every day, it seems doubtful that they will be.
While we welcome the DTI's new flexibility in the design of the law, the responsibility for amending the draft law remains with Parliament's Trade and Industry Committee and the DA will be working hard to ensure that regulatory burdens are lowered in the interest of making it easier for law-abiding South Africans to do business in this country.
Statement issued by Tim Harris, MP, Democratic Alliance shadow minister of trade and industry, January 25 2011
Click here to sign up to receive our free daily headline email newsletter
