Hon Chairperson, hon members, officials from the department, it is an honour that one is humbled by to present this important and progressive Bill on this very important day.
The Companies Act, Act 71 of 2008, was assented to by the President on April 2010 and overhauls the current Companies Act of 1973. Let me be upfront and say that, as a committee, we had enough time for engagement with the department.
It is clear that the Bill has important features that place South Africa among the leaders of the world in terms of company legislation. These features include flexibility, through the introduction of alterable and unalterable provisions, to effectively regulate companies of all sizes; the simplification of the registration process to cut down on red tape; the clarification of directors' duties without replacing the common-law principle; enhanced protection for minority shareholders to increase shareholders' activism and to minimise the scourge of company scandals; recognition of employees' rights to participate in company governance; and the business rescue provision for early detection and turnaround of companies in financial distress, which will go a long way towards saving jobs. You are all aware that this year has been declared the year of creating jobs.
The clarification given by the department to the committee regarding the extension of the implementation date was that a request from business was accepted. It took almost two years before it could be finalised.
Our engagement with the department made us realise that when a person has been convicted of fraud or dishonest conduct, such as person should be disqualified for a limited period which may be extended by a court with jurisdiction. The constitutional rights of such a person should not be impacted upon indefinitely.
It became clear from our engagement with the department that this piece of legislation would go a long way in transforming the way in which business is done in our country. On behalf of the committee, we would like to thank the department for their detailed engagement with the committee. As a result, and on behalf of the committee, we move that the House pass the Bill. I thank you.
Debate concluded.
Hon members, that concludes the debate. I shall now put the question. The question is that the Bill be agreed to. In accordance with Rule 63, I shall first allow political parties to make declarations of vote if they so wish.
Declarations of vote:
Hon Chairperson, on behalf of the DA, I make the following declaration. There is an urgent need to make doing business in South Africa easier. Part of achieving this objective has been the overhaul of the 38- year-old existing Companies Act. The Companies Amendment Bill before us today goes a long way, but not far enough, to correct the flaws in the 2008 Companies Act.
In the first place, the Democratic Alliance is opposed to the hasty implementation of the Act and the proposed amendments on 1 April 2011. This view is supported by organised business. They believe that they are not being given enough time to prepare for any changes that may be required by the new Act as well as the amendments to it. Secondly, the amendment does not remove the totally unnecessary obligation for holding companies to obtain a special resolution from members before loans to subsidiaries can be made. This simply ignores the reality of the legitimate, regular and frequent use of intercompany loans by companies.
Thirdly, and probably most telling, is the Malema clause, which will allow convicted fraudsters to be appointed, without any application to court, as directors a mere five years after being convicted. Thus, even if a person has been convicted and sentenced to a sentence in excess of five years, such as Schabir Shaik, that person may be appointed as a director while still in prison or on the golf course, as in Shaik's case. The ANC clearly puts the comfort and financial standing of its convicted fraudsters ahead of protecting South Africans from the actions of such fraudsters.
The solution to job creation lies not in the ANC's Expanded Public Works Programme, EPWP, and its bloated, inefficient and frequently corrupt civil service, but in real economic growth. Economic growth is only achievable when all South Africans are given the opportunities to achieve their full potential.
We need a society that ensures that every South African is given the opportunity to fulfil their potential and their dreams. We need an open opportunity society for all. In view of the fatal flaws in the Bill and despite the advantages contained in it - and there are many advantages - the Democratic Alliance does not support the Companies Amendment Bill in its present form. Thank you.
Hon Chairperson, I make the following declaration on behalf of Cope. The changes in business law arising from the principal Act as well as these amendments are extensive. Government must not exert undue pressure on business to get all its ducks in a row. The Minister's insistence on implementing this legislation on 1 April will not allow business time to digest all the changes. Moreover, the Minister should be engaging the business community so that a seamless change can take place from the old order to the new.
In order for investors to be attracted and for business activity to be encouraged, certainty and clarity have to be obtained. The department should closely and consistently monitor the kind of inconsistency and ambiguity that crept into the principal Act, which made all of these amendments necessary.
Cope would like to see that realistic timeframes are given so that business and government move in step. Cope would also like the Minister to make a statement to Parliament a year after the Act comes into operation to inform the House about how many foreign companies sought domestication in terms of section 335 of the Companies Act of 1973. Such information will be very valuable in gauging business confidence and investor sentiment.
While we agree with many of the amendments, we will not support this Bill if the Minister refuses to show flexibility regarding the date of implementation. Thank you.
UMBHEXESHI OYINTLOKO WEBHUNGA: Sihlalo, egameni le-ANC, ndifuna ukuthi abantu ekudala baxhamla bayalibala ukuba amathuba avuleleke nakwabanye abantu kulo Mzantsi Afrika mtsha, kwaye abantu abakhe babanjwa angekhe babethelelwe emnqamlezweni unaphakade. Ethubeni abantu bayalinikwa ithuba labo, futhi ndiyothuka xa i-DA iziphikisa. Izolo bebethetha nge 'open society' namathuba ayo, namhlanje bathetha into enxamnye naloo nto. Kuza kufuneka ukuba basicacisele.
UMphathiswa akayiqalanga izolo le nkqubo. Amalungu ekomiti ayazi kakuhle le nkqubo ebehamba nayo oko. Kungaphezulu kwenyanga ezintandathu iqhuba le nkqubo.
Ukugqibela, ndifuna ukuthi asilocandelo lezoshishino kuphela elalichaphazeleka. Angekhe sivume ukuba i-ajenda yamakhapitali ihlale isilawula. Egameni le-ANC siyawuxhasa lo mpoposho. [Kwaqhwatywa.] (Translation of isiXhosa paragraphs follows.)
[The CHIEF WHIP OF THE NCOP: Chairperson, on behalf of the ANC, I want to say that the people who have been benefiting for a long time forget that opportunities are open for other people in the new South Africa, and people who were once incarcerated cannot be crucified forever. After a while people must be given their chance, and I am shocked that the DA is contradicting itself. Yesterday, they were talking about an ''open society'' and its opportunities, but today they are saying the opposite. They must explain.
The Minister did not initiate this programme yesterday. The committee members know it very well because they have been involved in the whole process. This programme has been running for more than six months.
In conclusion, I want to say it was not only the Department of Trade and Industry that was involved. We cannot allow the capitalist agenda to continue governing us. On behalf of the ANC we support this announcement. [Applause.]]
Bill accordingly agreed to in accordance with section 75 of the Constitution.