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02 Nov 2010 16:46
Department of Trade and Industry Director General Tshediso Matona has absolved the Companies and Intellectual Property Registration Office (Cipro) of blame in the latest Tony Yengeni debacle.
The Democratic Alliance on Monday laid charges against ANC veteran Yengeni for serving as a director of six companies, though by law his jail sentence for fraud precludes him from doing so.
Section 218 of the Companies Act disqualifies anybody who was jailed for theft, fraud, forgery or perjury from being a company director, unless a high court sets aside the disqualification.
Briefing the media at Parliament on Tuesday, Matona said it seemed transformation in the economy, which historically excluded people who were now being included in the mainstream economy, had consequences.
One of these was that there was insufficient understanding and knowledge of the legal framework for corporate governance as provided for in the original Companies Act, which set out the responsibilities of directors and how they might change, as well as the role of the register - Cipro in this instance.
This “space” required addressing, not only by government, but also by the private sector itself to make all directors and executives aware of the legal governing framework.
He said that this was needed particularly in view of the new Companies Act—due to come into effect on 1 April 2011—which had even greater obligations on directors.
With regard to an individual director, who might for one reason or another fall foul of the requirements of the Act, there was no way Cipro would be able to know “what each and every director on the database is up to on a day-to-day basis”.
“It’s simply impossible.” The same applied, for example, where a director died.
“The obligation is on the company concerned to bring this to the attention of [Cipro], to say that such and such a director is no longer eligible to be a director for one reason or another,” Matona said.
“That’s the legal situation, so there should be no confusion here as to what the responsibility and obligations of [Cipro] are relative to the responsibility of the company concerned.”
On Monday, Democratic Alliance (DA) Member of Parliament (MP) Tim Harris said the police had undertaken to investigate a potential fraud case against Yengeni, a former ANC chief whip, for holding the posts.
Media reports against Yengeni
Rapport and City Press claimed on Sunday that Yengeni was still serving as a company director despite his four-year jail sentence for fraud linked to South Africa’s multi-billion rand arms deal.
A search of the Companies and Intellectual Property Registration Office (Cipro) revealed Yengeni serves as a director for Auburn Avenue Trading 88, Circle Way Trading 231, Duoflex, Abrina 2354, White Rag Investments and Cream Mag Trading.
He joined three of the companies in 2005, before he was sent to jail the following year, and the remaining three in 2008.
City Press quoted Yengeni as spurning the notion he had to ask the courts for special permission to serve as a director.
“What has the high court to do with my life,” he reportedly asked.
“Maybe the law stipulates certain things. But the high court… .I don’t think they feature.
I don’t have to ask permission from them to deal with my life.”
The identity number listed for Yengeni in Cipro’s records coincides with that in government records, confirming the directorships are held by him.
Later on Tuesday, in a members’ statement in the National Assembly, Harris said he awaited the outcome of the resulting police investigation into the matter with interest.
“A cloud of corruption and criminality hangs over [Yengeni’s] excessive wealth that he continues to flash around with no regard for the persistent poverty that is the reality of most South Africans.
Yengeni is currently in charge of establishing the ANC’s new political school.—Sapa
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