A Companies Amendment Bill, which will be piloted through Parliament by Minister of Trade and Industry Mandisi Mpahlwa, has been tabled in Parliament.
The Bill, which was presented in draft form to the trade and industry ad hoc committee before Parliament went into recess last month, deals with such matters as the circumstances under which “persons” are disqualified from being directors of companies.
Existing legislation already makes it an offence for a director to serve if he or she has been found guilty of theft, fraud, forgery or corruption, but the Bill extends the liability to other directors liable for all debts incurred by the company for the period during which a disqualified person acted as a director or directly or indirectly took part in or was concerned in the management of the company concerned.
Public hearings are expected after Parliament returns in August by the trade and industry portfolio committee — which has now become a fully-fledged portfolio committee.
In another amendment of the main Act — first passed in 1973 — the Bill deals with securities that are transferable without a written instrument and not evidenced by a certificate. This refers to the JSE Securities Exchange’s electronic share trading system, Strate.
The Bill seeks to prevent the illegal transfer of the ownership of a share as current law does not provide for the aggrieved person — the original holder — to get a court order to reverse the sale or get compensation from the new holder of the share. The new owner will have to prove he was not aware of any illegality.
In terms of the memorandum of the Bill, the amendment “seeks to make it clear that a court may not remove the name of a person from the relevant register unless the name was entered through fraud or illegality”. — I-Net Bridge