Companies Amendment Bill: State wants to push its anti-market agenda deeper into boardrooms – Sakeliga 

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Damaging trend of racialisation and interference is continued  

“THE State continues to elbow itself into the boardroom with its anti-market agenda – and that does not bode well for the economic welfare of people in South Africa,” according to Daniel du Plessis, Legal Analyst at Sakeliga. Sakeliga submitted comments on the Companies Draft Amendment Bill to the Department of Trade and Industry (DTI) last week. The business organisation criticised the Bill for a lack of legal clarity and the exacerbation of excessive state interference in businesses.

“An evident trend towards more racialised policies is clear in the Companies Amendment Bill, as well as the recent Employment Equity Amendment Bill and Competition Amendment Bill. It boils down to government regulation shouldering out entrepreneurial discretion in many areas of business to the detriment of consumers in general, but more specifically poor consumers. Moreover, by allowing for undue and excessive ministerial discretion, the Bill does much to undermine legal certainty and the rule of law in general. While it is not entirely clear how the Bill’s proposed increases in ministerial discretion will be applied in practice, we are concerned that it will be used towards pushing further economic inefficiency and anti-market ideologies into the boardroom,” said Du Plessis.

Du Plessis pointed out several legal uncertainties the Bill creates, which is largely due to a number of provisions which are still to be fleshed out by means of regulation. “It will, for instance, be left to the Minister to determine the way in which B-BBEE matters will be referred to the Companies Tribunal and seemingly also under which circumstances. The Minister also retains the ability to make unilateral determinations as to what the functions of social and ethics committees should be, as well as their composition and operations.”

According to Du Plessis, the Bill aims to empower the B-BBEE commission to refer certain matters within its purview to the Companies Tribunal for adjudication. The Companies Tribunal, instituted in terms of the 2008 Companies Act, has up to now been supposed to provide speedy adjudication of disputes in terms of the Act. “Right now, the specific matters and grounds for referral are vague and largely undefined. This seriously threatens to undermine the legal and policy certainty businesses need to succeed and contribute to public welfare,” Du Plessis continued.

“Companies already serve society, not only by creating valuable products and services for consumers, but also by empowering their employees. These laudable social purposes look to be threatened by the State’s ham-fisted attempts to defy basic sensible business and economic principles.”

Sakeliga’s comment on the Companies Amendment Bill is accessible at the following link.