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NATIONAL ASSEMBLY HANSARD 17 MAY 2019 Vol 45 No 52

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PARLIAMENT OF ZIMBABWE

Friday, 17th May, 2019

The National Assembly met at a Half-past Nine o’clock a.m.

PRAYERS

(THE HON. SPEAKER in the Chair)

ANNOUNCEMENT BY THE HON. SPEAKER

ERROR ON THE ORDER PAPER

          THE HON. SPEAKER: My apologies Hon. Members for some procedural error. Because of the adjournment yesterday, I would like to draw the attention of the House to an error on the Order Paper wherein Questions without Notice and Questions with Notice were omitted. Consequently, the first item on today’s Order Paper should be Questions without Notice followed by Questions with Notice.

MOTION

BUSINESS OF THE HOUSE

          THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): I move that Questions without Notice and Questions with Notice be stood over until Order of Day, Numbers 1 and 2 have been disposed of.

          Motion put and agreed to.

COMMITTEE STAGE

TRIPARTITE NEGOTIATING FORUM BILL [H .B. 5, 2018]

First Order read: Committee Stage: Tripartite Negotiating Forum Bill [H. B. 5, 2018]

House in Committee.

Clauses 1 to 2 put and agreed to.

On Clause 3:

        THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): I move that Clause 3 be amended on page 5 of the Bill in line 29, to delete paragraph (a) of sub-clause 5, the figure 14 and substitute with 7 according to what Hon. Members were saying that they want an even number of representation. I thank you.

          Again on Clause, I propose amendment of Clause 3 in sub-clause 3 by the insertion of the following sub-paragraph after paragraph (e), ‘(f) Consult and negotiate Zimbabwe labour laws in line with the Constitution and other international best practice’. I so submit Hon. Chair.

Amendment to Clause 3 put and agreed to.

Clause 3, as amended, put and agreed to.

Clauses 4 to 8 put and agreed to.

On Clause 9:

          THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI):  We are in agreement. This one is not acceptable. It is the same as it is right now to say ‘the majority of members constituting the tripartite will form a quorum’. So, we are not accepting.

Amendment to Clause 9 put and negatived.

Clause 9, put and agreed to.

          Clauses 10 and 11 put and agreed to.

          On Clause 12:

          HON. NDUNA: Thank you Hon. Chair.  I had suggested that in this technical committee where there are three clusters – the economic cluster, the labour market cluster and the social cluster that there be a place established that can be embedded with the informal sector to formalise the informal sector, in particular the labourers or the artisanal miners who are in the informal sector.  If the informal sector can get favour with the Minister where it is quite clearly established that the artisanal miners be included in the economic cluster, either to chair that cluster because they have brought quite a lot of benefit to Government in terms of gold deliveries.  So, it should be made very clear that the economic cluster gets to be chaired by the artisanal miner affiliate or the small scale miners because they do not belong to any organisation.  This is a way of making sure that they can continue to bring their gold into the coffers of the nation.  This is my clarion call; how the Minister can make sure that these get to be recognised it becomes an issue of semantics and technical gymnastics, but I make a clarion call that they be embedded in this technical committee, in particular in the economic cluster.  If they do not find them in there, let them be formalised in the labour cluster but let it be recognised that they are the ones that are bringing the much needed benefit economically to the nation.

          THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI) on behalf of THE MINISTER OF PUBLIC SERVICE, LABOUR AND SOCIAL WELFARE (HON. DR. NZENZA):  Thank you Hon. Chair.  I appreciate that Hon. Nduna is very passionate about artisanal miners but it is not acceptable.  I thank you.

          Clause 12 put and agreed to.

          Clause 13 put and agreed to.

          On Clause 14:

          HON. E. NCUBE: Thank you Hon. Chair.  I move on Clause 14 that the Bill is amended by the deletion of paragraph 6 (b) of sub-clause and the substitution of the following:

 “(b) May be revoked by the management committee on justifiable grounds at any time”.

          THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI) on behalf of THE MINISTER OF PUBLIC SERVICE, LABOUR AND SOCIAL WELFARE (HON. DR. NZENZA): Thank you Hon. Chair,  I accept the amendment to the clause.

          Amendment to Clause 14 put and agreed to.

          Clause 14, as amended, put and agreed to.

          On Third Schedule:

          THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI) on behalf of THE MINISTER OF PUBLIC SERVICE, LABOUR AND SOCIAL WELFARE (HON. DR. NZENZA): Thank you Hon. Chair.  I move the amendments in my name that: On page 14 of the Bill, delete in the Third Schedule the words “The 14 Government members’ and substitute “The seven Government members”

On page 15 of the Bill, delete in the Third Schedule the paragraph beginning with the words “The ratio of two Government members” et cetera, and ending with “with the membership of the main TNF.’ 

On page 15 of the Bill, delete in the “Explanatory Note” to the Third Schedule the words “assemble 14 Government members” and substitute “assemble seven Government members.”  I thank you.

          Amendment to Third Schedule put and agreed to.

          Third Schedule as amended, put and agreed to.

Clauses 15 to 21 put and agreed to.

First and Second Schedule put and agreed to.

On Schedule 3:

THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI):  Thank you Mr. Speaker.  I have to repeat amendments to the Third Schedule pertaining to the list of Government members.  On page 14 of the Bill, delete in the Third Schedule the words, “the fourteen Government members” and substitute with “seven Government members”.  On page 15 of the Bill, delete in the Third Schedule, the paragraph beginning with the words, “the ratio of two Government members” et cetera, ending with the “membership of the main TNF”.  On page 15 of the Bill, delete in the explanatory note to the Third Schedule, the words “assemble 14 Government members” and substitutes “assemble with seven Government members”.  I so submit. 

Amendment to Third Schedule, put and agreed to.

Schedule 3 as amended put and agreed to.

Schedule 4 put and agreed to.

House resumed.

Bill reported with amendments.

Bill referred to the Parliamentary Legal Committee.

COMMITTEE STAGE

COMPANIES AND OTHER BUSINESS ENTITIES Bill [H. B. 8, 2018]

Second Order read:  Committee Stage:  Companies and other Business Entities Bill [H. B. 8, 2018].

House in Committee.

          Clause 1 put and agreed to.

          On Clause 2:

          THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): Thank you Hon. Chair. On the Interpretation Section, I propose the insertion of definition in Section 2 of “beneficial owner” in relation to a company means a natural person who ultimately owns or controls the rights to or benefits from property or a person who exercises ultimate effective control over a legal person, and, more specifically, refers to a natural person who-

(a)                  directly or indirectly holds more than 20% of the company’s shares; or

(b)            directly or indirectly holds more than 2% of the voting rights; or

(c)                  directly or indirectly holds the right to appoint or remove a majority of directors; or

(d)            otherwise exercises or has the right to exercise, significant influence or control. I so submit.

Amendment to Clause 2, put and agreed to.

          Clause 2 as amended, put and agreed to.

          Clause 3 put and agreed to.

          On Clause 4:

          HON. MUSHORIWA: Thank you Hon. Chair. In terms of the institutions, I want the Minister to clarify two issues. There is the issue of the pensions funds. There has been a representation primarily done by IPAC in the sense that one of the major challenges we are facing is that between the pension funds and the insurance companies. I see the insurer which I want to take to cover the insurance companies. I want to check with the Minister to seek clarity whether the pension funds are also put under the definition of insurer, given that there is no definition of insurer on the definition side?

          HON. ZIYAMBI: Thank you Hon. Member. Pension funds are covered under other entities within the Bill. They are not covered here. I think you need to see Clause 4.

          HON. MUSHORIWA: Can you not specifically mention it because one of the major challenges is that the amount of money that we have lost through the pension funds is huge and I think the Bill needs to specifically mention that pension funds are exempt from this Bill.

HON. ZIYAMBI: Hon. Chair, I would like to respond to his request.  In terms of insurance, they are covered by other enactments.  It is not covered by other enactments just like the banking sector is not covered by the Companies Act - [HON. MEMBERS:  Inaudible interjections.] -

          THE CHAIRPERSON:  Order, order.  Hon. Chief Whip order please.  There was an omission on Clause 2 – Interpretation, so we revert to Clause 2.

          HON. NDUNA: On Clause 2, we had proposed an amendment as a Committee but because there was no consensus, we withdraw that amendment proposal.

HON. NDUNA:  On Clause 4, the Committee proposed amendments as follows:  Clause 4 as amended in sub paragraph (1) subsection (1) by the deletion of ‘nothing in this Act contained shall’ and the substitution of ‘nothing contained in this Act shall’.

          I believe this is acceptable by the Minister.

          THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS:  The amendment is accepted.

Amendment to Clause 4 put and agreed to.

Clause 4, as amended, put and agreed to.

Clause 5 put and agreed to.

On Clause 6:

HON. MUSHORIWA:  I believe that given the fact that we have entrenched the issue of devolution, all the laws of this county should recognise the question of devolution to the extent that the companies offices shall be located in Harare, Bulawayo, Mutare, Masvingo, Gweru, Chinhoyi, Gwanda, Lupane, Marondera and Bindura so that they reflect all the capital cities or the provincial cities of every province.  We do not want to have a situation where we continue travelling all the way from Marondera, Mashonaland Central and Mashonaland West to come to Harare.  I think we need to have that amendment so that we cover all the provinces.

THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): I would like to thank Hon. Mushoriwa for his contribution.  His concerns are well covered in the Bill even though it stipulates that it will be located in Harare and Bulawayo.  It then goes further to say and any other locations that the Minister may designate. 

As we progressively realise that, the Minister will ensure that wherever there is a necessity to have a company’s office, it will be established.  Your fears are already covered and it will be attended to in the way it is couched.  So, as we progressively realise that the Minister will ensure that wherever there is a necessity to have a company’s office, it will be established, so your fears are already covered and it will be attended to in the way it is couched, I thank you.

          HON. MADZIMURE: Thank you Chair. Minister you already know where we have most of these activities, where people go to register companies and inquire about companies. You as the Minister know exactly that Mutare and Gweru are busy towns as far as company registration is concerned.  Instead of you trying to use your discretion later, why can you not just include it in the Act at this particular point so that you will not have any other problems again or to wait for people to make submissions.  Why can we not just make it easy to do business because this is the thrust that we have as a country.  We want to minimize all the hurdles that may prevent someone to do something that is formal.  This is simply promoting formalizing of doing business.  Let us make it easy for our people to do business.  Why can we not designate Bindura, Marondera, Mutare, Gweru and Masvingo as these towns are busy and we are done Minister?  I think this is a very simple suggestion that you can just do right now.

          HON. NDUNA: Thank you Chairman Sir.  I believe that it should not be restrictive, It should be left open end as it is, giving discretion to the Minister, gives a lot of sense.  Where we have the Special Economic Zones Act that the Minister can use his or her discretion in tandem with the operation of the registration of the companies, aware there is need to look at empirical evidence in order to adjudicate on issues of promulgating a place to mean to have a lot of business; for example Chegutu’s GDP certainly far outweighs the other GDPs of other provincial capitals.  So, if we put in names, we impede upon such entities that can be designated as Special Economic Zones because on the amount of business that is generated in the localities.  So it is my fervent view and hope that you can give the Minister as enshrined in the current clause, the discretion to continue to be open ended and make sure that we are not unnecessarily left in the fringes of the economic benefit in the future because we are not as big as is thought in the current scenario.

          HON. MUSHORIWA: Thank you Mr. Chair. Already there is empirical evidence and the Registrar of Companies.  If you check all the places that I have actually mentioned, if you do not want to specific mention, but at least let it be said in each and every province.  If you check the number of companies that are registered here in Zimbabwe, all the places that I am talking of have got a lot of companies according to the Registrar of Companies. 

          More importantly, Mr. Chairman, there are two issues that we need to take cognizance of.  Firstly, Hon. Madzimure has said that this Government has been saying that we want to make sure that there is ease of doing business in Zimbabwe – [HON. MEMBERS: Inaudible interjections.] –

          THE CHAIRPERSON: Hon. Members, can we reduce the noise please and allow him to proceed.

          HON. MUSHORIWA: This Government has been saying that they want to have ease of doing business in this country. What they are doing here is actually making it difficult. We want a situation that the ease of doing business is not meant for foreign investors only, it is also meant for local investors.  Why should a person be forced to come to Harare if you want to lodge your company’s papers?  Secondly, Mr. Chairman, this Government has said that they are committed to the issue of devolution, if they are committed to the issue of devolution, let devolution start now.  We need to make sure that all the laws that we enact in this august House speak to the devolution agenda and there is no better way to start than making sure that all provincial capitals have got the Registrar of Companies offices so that each and every person who wants to register a company will be accommodated.

          THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): Thank you Hon. Chair. While I appreciate the concerns of the Hon. Members, I have indicated that provision for expansion is already provided in Clause 6 (2).  Government cannot commit itself expenditures involved in establishing additional offices at specified...

          Hon. Mliswa and Hon. Chinotimba having stood up exchanging inaudible words.

          THE CHAIRPERSON: Hon. Mliswa please, order Hon. Mliswa please. Can we have order please.

          HON. CHINOTIMBA:  On a point or order Hon. Chair.

          THE CHAIRPERSON: What is your point of order?

          HON. CHINOTIMBA: I do not know what I have done wrong, this man is shouting at me.

          HON. MLISWA: I am not talking to Hon. Chinotimba.

          THE CHAIRPERSON: Hon Mliswa, you are disturbing the floor and you are making a lot of noise please – [HON. CHINOTIMBA: He is not a ZANU PF member, why is he sitting there he must sit on the opposition side.] –

          Hon. Mliswa having stood up making inaudible utterances.

          THE CHAIRPERSON: Hon. Mliswa, please go back to your seat, allow us to proceed.  Hon. Minister please proceed.

          THE MINISTER OF JUSTICE, LEGAL AND PARLIAMETNARY AFFAIRS (HON. ZIYAMBI): Thank you Chair, like I said the moment we put the Government shall ensure that offices are in all the provincial capital, it means that we have to commit expenditures to establishing those.  The way it is couched, it means that from day one, we work progressively towards realizing establishment of offices in all the provincial capitals.  So I believe the way the Clause is couched ensures that in line with our ease of doing business mantra, we will progressively realise that, I thank you.

          HON. NDUNA: Thank you Chair.  You also realised that in the Bill it also deals with regulation of registration of companies in terms of computerization of the Registry. So it deals with e-governance. So, given that scenario, there is no need to have a plethora of office.  It is my thinking that we are open-ended as it is.  If we ask to have frameworks or rather physical infrastructure, it is now an archaic, moribund, rudimental and antiquated way of doing business.  We should now no longer behave like BBC - born before computers.  We now need to progress and have a CCN which is collaboration, coordination and networking and not leave company registration behind.  We now need to remove the issue of doing this integrated. I think in its present form, it is okay and let us embrace computerisation in the same way.  If the Minister commits to this Bill here in terms of computerisation and e-governance, I have no challenges completely in having the same infrastructure remain and being at the same status quo.

          Clause 6 put and greed to.

          Clause 7 put and agreed to.

          On Clause 8:

          HON. MUSHORIWA: Hon. Chair, on subsection 3 where it says, the Minister shall table before Parliament all reports submitted to him; I think we need to specify period because if you read paragraph 1, it says the Registrar will give the Minister within 60 days.  I think we should also say, the Minister shall table before Parliament within 90 days all reports submitted to him.  I think it should not just be open ended; we need a timeframe. So I propose that it should actually read within 90 days reports should be submitted to the House.

          THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): Thank you Hon. Mushoriwa. While I may be persuaded, you were supposed to have given notice, so I reject it.

          HON. MUSHORIWA: I think if the Minister is persuaded and he understands that it is correct, I think that amendment can actually be done with or without the notice.  We have done that before and there is no provision.

          HON. ZIYAMBI: Thank you Hon. Chair. I am advised that it is allowed so we set within 90 days.

          Clause 8 put and agreed to.

          Clauses 9 and 10 put and agreed to.

          On Clause 11:

THE MINISTER OF JUSTICE LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): I move the amendment standing in my name that Clause 11 is amended in line 14 by deletion of “may” and the substitution of “shall”.

Amendment to Clause 11 put and agreed to.

Clause 11 as amended, put and agreed to.

          On Clause 12:    

HON. MUSHORIWA: I need clarification from the Minister. If you read, it says if a person fails to submit or to lodge within the prescribed time, it then says the Registrar may extend it as long as it seems to him or her to be reasonable.  To just leave it as reasonable is dependent on the office bearer. Can it not be for instance 60 days or a period of some sort rather than to leave it as reasonable? My thinking will be to say if a person has failed to submit the papers or to lodge then that person should be given extension and I think 60 days should be appropriate.

          THE MINISTER OF JUSTICE LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): While I appreciate what Hon. Mushoriwa is saying, I think this is on a case by case basis. My circumstances of seeking an extension may be different from another person and so by prescribing to say that within 30 or 60 days, would not give the flexibility according to the application that would have been made by specific companies. I indulge him that as it is, it makes more sense. I thank you.

          Clause 12 put and agreed to.

          Clauses 13 to 20 put and agreed to.

          On Clause 21:

          HON. MUSHORIWA: The Bill says one payment of US$1. I would suggest to the Minister that it should be changed to say payment of an amount as the Minister may prescribe because as you are aware, we are in a multi currency economy. In any event, to continuously tie people to a US$ may not be the proper thing. I suggest that it should be on payment of an amount as the Minister may prescribe.

          THE MINISTER OF JUSTICE LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): While I appreciate what he is saying to say we are in a multi currency economy, I believe that to say that as the Minister may prescribe, he may prescribe exorbitant prices. Currently, we can use the cross bank rate. Alternatively, once we have our own currency we will then amend and ensure that all the Acts are amended accordingly. I believe the way it is, it is very flexible and it will not give a lot discretion. I thank you.

          HON. MUSHORIWA: This Bill has taken us so long and we should never make a mistake. Let us try and make sure that we do this thing once. There is nothing which is problematic Hon. Minister, to simply leave it and say payment of an amount the Minister may prescribe. What it does, it covers everything and there is no need for us to come up with an amendment. The Minister of Finance has been on record saying that within the next few months we are going to have our own currency. So, the best thing is to simply say, payment of an amount. When you say payment of an amount, it covers all whether it is going to be US$, RTGS$ or Zim$. That is the easiest way to do it because very soon we will not have the US$. In any event, most of our transactions at the moment are no longer in US$ terms.

          HON. ZIYAMBI: I want to thank Hon Mushoriwa. I think the way it is couched, your concerns are also taken care of. US$ is a minimum amount and it then goes to say or such reasonable greater amount as the Minister may prescribe for the purposes of this section. The way it is, your concerns are already covered in the way it is couched. It is giving a minimum amount of US$1. We should give comfort to everyone to say it is a US$1. Should the Minister want to prescribe any other amount the law is allowing that. Whatever your fears, they are already covered. I so submit that let us leave it as it is and we approve it.

          HON. MADZIMURE: The challenge is also that we now have the bank rate and we have the parallel market rate. It will still be difficult for even the officer receipting to say what is that equivalent to. If you look at the situation right now, I can go to the Deeds Office and say it is 3:1, someone will say it is 5:1. It poses a problem as far as the officer who is receipting is concerned because there is RTGS and bond. How are they going to determine at that particular time as you make the payment that this is the correct rate at which you must pa?. It confuses the whole situation.

          HON. ZIYAMBI: I think that can be covered in regulations where the Minister will publish the fees that can be paid from time to time as allowed by the Act.

          Clause 21, put and agreed to

          Clause 22 to 41 put and agreed to

          On Clause 42:

          HON. MUSHORIWA: I just want the Minister to clarify paragraph 2. I do not see the necessity of that paragraph. I actually think that the Registrar should, because already within the body of the Act, there is much provision and I think let the Registrar do his things. I do not see why we …

Hon. Ndebele and Hon. Matambanadzo having passed between the Chair and the Hon. Member speaking.

THE HON. CHAIRPERSON: Order, please can you go back and use the other door please.

HON. MUSHORIWA: My fear Hon. Minister is that this paragraph 2 which says, ‘whenever the Registrar’; the reading of it ‘whenever’ and whenever can actually be interpreted to mean every time. Whenever the Registrar intends to Act in terms of subsection 1(b), ‘he or she shall give adequate prior notice to the Minister of his or her intended action’. I think let us remove the word ‘shall’ and replace it with the word ‘may’.

HON. ZIYAMBI: Thank you Hon. Chair. I am not appreciating the mischief that he wants by removing the word ‘shall’. What is it that you feel uncomfortable by the Registrar notifying the Minister?

HON. MUSHORIWA: Hon. Chair, I think it will be wrong in my view to have the Registrar whenever he wants to act in terms of subsection 1 (b), he or she has to consult the Minister because the word ‘shall’ mandates the Registrar that he or she cannot do anything without notifying the Minister. My view is that we should actually give room to the Registrar that in certain cases and that is the reason why I am saying let us remove ‘shall’ and replace with ‘may’.

HON. ZIYAMBI:  I submit that the provision as it stands is good law in that sometimes the investigated company may be a foreign company registered which may involve sensitivities over foreign relations, and therefore, in that regard, putting this clause will ensure that we are covered in terms of our foreign relations. It is for the purposes of notifying so that the Minister is fully aware of what is happening and should there be any issues that may jeopardise foreign relations, then the Minister will be aware. I so submit.

HON. MUSHORIWA: Mr. Chair, I hear what the Hon. Minister is saying but my major fear is that we are going to have companies that are linked to powerful people in this country, politicians and the like, that will make it difficult for the Registrar to perform his or her work. This is the reason why I do not believe that everything has to go to the Minister. I have full respect for the Hon. Minister but we do not know tomorrow. Tomorrow the Hon. Minister may be someone and the company under investigation may belong to his or her friend. We should allow the Registrar sufficient independence to do the work.

HON. ZIYAMBI: Thank you Hon. Chair. I think what Hon. Mushoriwa must appreciate is that this provision relates to Section 42 (1) (b) but the Registrar also has powers in terms of Section 39. That is the reason why it says ‘without prejudice to what he has to do’. If he intends to do this and then assign another investigator, then there is need to inform the Minister but what you are worried about can be covered in terms of Section 39.  I thank you.

Clause 42 put and agreed to.

Clauses 43 to 59 put and agreed to.

On Clause 60:

THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI):  Thank you Hon. Chair. I move the amendment standing in my name. I wish to make amendments to Clause 60. On page 53 of the Bill, in line 1, to delete Section 60 “derivative actions” and substitute with the following “60 Direct actions by a member. A member of a private corporation or a company may bring an action in court in such person’s own name against any manager, officer or director referred to in Section 54 or 55 to enforce or recover damages caused to him or her caused by violation of a duty incumbent upon any such manager, officer or director under this act or any other act including laws against fraud or misappropriation.

(2) An action under subsection 1 may be brought by one person in the person’s own name or by two or more persons in their names acting together”.

Amendment to Clause 60 put and agreed to.

Clause 60 as amended, put and agreed to.

          On Clause 61:

THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): Thank you Hon. Chair.  I move the amendment standing in my name. I wish to include the following amendments again. On page 53 of the Bill, after Section 60, the following is inserted and the subsequent section will then be numbered accordingly.  So, this becomes Section 61 and the rest of the numbers will be numbered accordingly.  The next one which is the current 61 then becomes 62.  So I insert a new Section 61 “Derivative actions by a member on the entity’s behalf”

(1)            A member or shareholder of a company or private

 business corporation may bring an action in court in such person’s name and on the company’s behalf against any manager, officer or director referred to in Section 54 or 55 to enforce, or to recover that manager, officer or director, damages caused to the company by violation of duties owed by that manager, officer or director to the company under this Act or any other law including laws against fraud or misappropriation.

(2)            Such an action may be brought by one person in the

person’s own name and on the company’s behalf or by two or more persons in their names….

          The Hon. Minister having gone to verify with the Hon. Chair.

                    Thank you Hon. Chair.  I just wanted it to be captured correctly.  On page 53 of the Bill, after the new Section 60, the following will then be inserted to become Section 61 and there will be a new Section 62.  The rest will be numbered accordingly so the current section 61 becomes Section 62 but with changes.  So section 61 on page 53 of the Bill after Section 60, the following is inserted and the subsequent sections are numbered accordingly. 

         61   Derivative actions by a member on the entity’s behalf

         (1) A member or shareholder of a company or private business corporation may bring an action in court in such person’s name and on the company’s behalf against any manager, officer or director referred to in Sections 54 or 55 to enforce, or to recover from that manager, officer or director damages caused to the company by violation of, duties owed by that manager, officer or director to the company under this Act or any other law including laws against fraud or misappropriation.

         (2)   Such an action may be brought by one person in the person’s own name and on the company’s behalf or by two or more persons in their names acting together.

       (3)  An action may be brought under this section only in cases in which:

(a)  damage or a breach of duty to the company itself is claimed; and

(b)      the plaintiff was a member  or shareholder at the time of the acts which are complained of, or acquired that status as a result of a transfer of that person’s interest or shares from a person who had that status at that time; and

(c) the plaintiff holds interests or shares representing at least ten per centum of the private business corporation or  company’s voting power (which in the case of a private limited company or limited company shall mean ten per centum votes of the ordinary shares), and where two or more plaintiffs bring the action together the holdings of all of them shall be counted for this purpose; and

(d)           the plaintiff has previously requested  the manager or controlling members of the private business corporation or board of company in writing to rectify the acts which are complained of,  and that request was refused or not responded to within thirty-two days (but the court on good cause shown to it may dispense with this requirement).  

         (4)  Any complaint under this section shall include a copy of the request referred to in subsection (3) and details of all other efforts to have the private business corporation company itself bring the complaint, or shall state in detail why such a request should not succeed. 

         (5)  A complaint under this section may not be discontinued or settled between the plaintiff and the defendant without the court’s approval given after full disclosure of the details of the proposed discontinuance or settlement. 

         (6)  All damages received in a derivative case shall be the property of the company except that the plaintiffs who prevailed shall be paid their reasonable expenses, including legal fees, from the moneys paid by the defendants. 

         (7) The amount of such expenses under subsection (6) must be approved by the court.  The court may declare the entity not to be a juristic person with respect to the said abuses, acts or omissions and to imputes those abuses, acts or omissions to the persons responsible for them in their personal capacities.”  I so submit. 

Amendment to Clause 61 put and agreed to.

Clause 61 as amended, put and agreed to. 

On Clause 62:

THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI):  Thank you Mr. Chairman.  I now replace Clause 61 which is in the Bill and it becomes Clause 62 as follows: 

62   Court Remedies in Deadlock, Fraud, Oppression and Other Situations; Piercing the Corporate Veil  

(1)   In a legal action by a member of a private business corporation or a company, the court may order one or more of the remedies listed in paragraphs (2) and (3) of this section if it is established that: 

(a)   the managers or directors, or the member, of the entity are deadlocked, whether because of even division in their number or another reason, and irreparable injury to the entity is likely to be caused to the entity’s business or the business can no longer be conducted to the members’  advantage, or

(b)                        the managers, directors or any other persons in control of the entity have acted illegally, fraudulently or oppressively toward the petitioning member. 

         (2)   In an action under subsection (1) the court shall have the power to order one or more of the following remedies or similar remedies:  

(a)   dissolution or liquidation of the entity and if the court finds that the grounds stated above are curable, it may order a reasonable time period for cure;        

(b)                        the performance, variance or setting aside of any transaction or other action of the entity or its members, managers or directors;

(c)  the cancellation or amendment of a provision of the entity’s constitutive documents;

(d)                  the removal of any manager, director or officer, or the appointment of any person as a manager, director or officer;

(e)   an investigation of the financial effects of any matter in dispute, which may include a forensic audit;

(f)    the appointment of one or more inspectors to investigate the acts complained of or of a custodian to manage the business of the company for a term and under conditions determined by the court;

(g)the submission of the dispute to mediation or other non-binding alternative dispute resolution;

(h)                        the payment of dividends or other distributions;

(i)     the award of damages to any aggrieved party, or

(j)     the purchase by the company or another member or shareholder of all of the interests shares of the petitioning member or shareholder for their fair value as determined by the court.

      (3)  If the court finds that –

(a)    the juristic form of the private business corporation or company has been abused by the board , manager, director or officer or any one or more members of the company or private business corporation , for their own or some other person’s advantage; or

          (b)     any acts done or omitted to be done by or on behalf the private business corporation or company constitutes unconscionable abuse of the juristic person of the private business corporation or the company.

          The court may declare the entity not to be a juristic person with respect to the said abuses, act or omissions and to impute those abuses, acts or omissions to the persons responsible for them in their personal capacities.” I thank you Mr. Chairman.

          Amendment to Clause 62 put and agreed to.

          Clause 62 as amended, put and agreed to.

          Clauses 63 to 70 put and agreed to.

          On Clause 71:

          THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): There is amendment to Clause 71 by the insertion at the end of that Clause of item 9, 10, and 11 to read as follows: Clause 71 has subsection 1 to 8. So, I propose to insert Section to read as follows:

          (9)     With reference to subsection (2) (a) at the nominee of a beneficial owner shall disclose the name and relevant particulars of the beneficial owner to the company or private business corporation together with a written request that such beneficial owner and particular not appear on the face of the shares or in the share certificate in the certificate of interest or in the register of shareholders or interest holders. Whereupon such company or private business corporation shall comply with such request but keep a separate register containing the names and relevant particular of beneficial owners in question.

          (10)  The name and relevant particulars of the beneficial owners referred to in subsection (9) shall not be disclosed except with the consent of the nominee or by virtue of an order of a court of competent jurisdiction.

          (11) Any company or private business corporation that fails to keep the register of names and particulars of a beneficial owner referred to in subsection (9) shall be liable to category 4 civil penalty order at the instance of the Registrar.

          (12)  An agreement under section 298 may give standing to a foreign company registry to apply to a domestic court for an order referred to in subsection (10).

          (13)  Every company or private business corporation shall nominate a director or an officer who shall be responsible for maintaining the registers for beneficial owners, failure to comply with such shall render the company or private business corporation concerned liable to a category 4 civil penalty. I thank you Mr. Chairman.

          Amendment to Clause 71 put and agreed to.

          Clause 71 as amended, put and agreed to.

          On Clause 72:

          THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): Thank you Hon. Chair. I wish to insert before Clause 72 a new Clause which becomes the new Clause 72 which will read as follows: Obligations to Maintain and File Beneficial Ownership Information. Clause 72, subsection (1)     Every company shall maintain an accurate and up-to-date register of the beneficial owner or owners of the company, to be known as the register of beneficial owners which register shall-

(a)             be kept, within Zimbabwe at the same office at which the register of members is kept.

(b)            with respect to each director, record his or her first name and surname, any former first name and surname, an identification reference number appearing in his or her identity document, his or her full residential or business address and postal address and his or her nationality, as well as the nature and extent of his or her beneficial ownership in the company.

 (2) Every company shall file with the registrar, in prescribed form, accurate and up-to-date beneficial ownership information referred to in this section and shall within seven days of any change file updates as and when there is any material change to the information.

(3) Beneficial ownership information held and maintained in terms of this section, either by the company or by the registrar, shall be made available for inspection by the financial intelligence unit or by a law enforcement agency referred to in section 2 of the Money Laundering and Proceeds of Crime Act [Chapter 9:24].

(4) The company shall appoint a person, resident in Zimbabwe, who shall be responsible for keeping custody of the beneficial ownership information register and who shall be authorised to make the information available to the financial intelligence unit or law enforcement authorities, upon request.

(5) The names and sufficient contact details of the person referred to in subsection (4) shall be recorded in the form filed by the company with the registrar in terms of subsection (3).

(6) Beneficial ownership and other company information held by the registrar, shall be public information and shall be available for inspection, whether electronically or physically—

(a)   by members of the public; and

   (b)   by a financial institution or a designated non-financial business or profession referred to in section 2 and section 13, respectively, of the Money Laundering and Proceeds of Crime Act [Chapter 9:24].

   (7) The registrar or the financial intelligence unit may each, on its own behalf or on behalf of a law enforcement agency, seek beneficial ownership or other company information from their foreign counterparts, in respect of any company, and, likewise, may provide beneficial ownership or other company information to their foreign counterparts.

   (8) The registrar and the financial intelligence unit and any competent authority which, through them, requests beneficial ownership and other company information from other countries, shall monitor the quality of the assistance given by the foreign authorities and shall keep records of such requests and responses.

   (9) The company or its administrators, liquidators or other persons involved in the dissolution of the company, shall maintain beneficial ownership information records for a period of at least five years after the date on which the company is dissolved or otherwise ceases to exist.

         (10) Any person who fails to comply with the requirements of this section shall be guilty of an offence and shall be liable to a fine not exceeding level 14 or to imprisonment for a period not exceeding five or to both such fine and such imprisonment. I so submit.

         HON. NDUNA:  The amendment by the Hon. Minister is applauded.  However, it is my call Hon. Chair that the foregoing or the amendment that he has proposed should not be applied, in retrospect in particular where it talks about the beneficial information that needs to be kept either by the judicial manager, the liquidator or the re-constructer or the administrator, whichever applies to the situation that he is talking about.  It is my call, fervent view and hope that this application and this amendment, the ethos or values and what it speaks to should not be applied in retrospect.  It should be applied from the day this Bill is passed into law so that those people who have been liquidators of companies of two or three years back should not be hamstrung, incarcerated or be castigated because of this Bill that is being enacted this year or this time.  This is my call Hon. Chair.

          HON. ZIYAMBI: In our laws, what you are alluding to is taken care of.  There is no retrospectivity in terms of our laws and it will not apply.

          Amendment to new Clause 72 put and agreed to.

New Clause 72, as amended, put and agreed to.

Clauses 73 to 99 put and agreed to.

          On Clause 100;

          HON. NDUNA:  Thank you Hon. Chair.  I want to talk about this insolvency, if you go deeper in that clause, you will find that the Bill that we have here seeks to repeal the way insolvency was being dealt with in the past Companies Act and it seeks to replace the judicial management system with administrator, re-constructor or somebody who is going to make sure that the company is resuscitated.  I say this Hon. Chair because I seek that this Clause 100 in particular be refered in its values and operation to the Insolvency Act because the Act ventilates widely the operation of that clause. 

          The Insolvency Act deals with insolvency of a natural person partnership trust and all forms Mr. Chair.  It was put in place but I also want to say there are basic pieces of legislation that cover the insolvency regime.  So, if this section is dealt with in an isolated manner, it means the Insolvency Act that has been established deals with the Insolvency Act [Chapter 6:04], the current Companies Act [Chapter 24:03], the Estates Administrator’s Act [Chapter 27:20] and the Private Business Corporate Act [Chapter 20:11].  In addition, several provisions are set out in other laws that effect insolvency and creditors rights regime such as the Indigenisation and Economic Empowerment Act, the Banking Act, the Insurance Act and the Deeds Registration Act. So all these Hon. Chair have been taken care of by the Insolvency Act. I ask therefore Hon. Chair, that all this that now is embedded in the Insolvency Act and in a holistic manner; we do not re-invent the wheel in trying to prescribe a plethora or disintegrated pieces of legislation.

          This Bill also Hon. Chair, speaks to both aligning our legislation with the Constitution and also seeks to deal with the ease of doing business.  The judicial management entity for a very long time; I am quite alive to the issue of David Whitehead that it has not done justice to companies.  It is time using this clause, that the judicial management be made redundant and be a thing of the past.  By being appointed by the Master of High Court, the judicial manager in the past Companies Act section 306 in particular, would give unfettered access to the companies by the judicial manager based on the liabilities against the value of the companies assets. So it is my view Hon. Chair, that going forward, the objectives, ethos and the values of the judicial management process which was open-ended and which was subject to no timeframes and timelines becomes a thing of the past.  judicial management therefore which provided some ambiguity with regards to shareholders and stakeholders now therefore aligns itself to this Insolvency Act.

          So, this clause Hon. Chair, I request that it just be pointed out to the Insolvency Act in order that the judicial management process becomes a thing of the past.  Hon. Chair, I want to thank you for giving me this opportunity to completely annihilate the judicial management process because certainly, it was adding no value to the past Companies Act and that the judicial managers who have never performed completely become deregistered and do not take any part in any administration of any company in the future, in particular the one that administered the demise of David Whitehead Textiles.  I thank you. 

          HON. MADZIMURE: Thank you Mr. Chairman. I want to remind the Minister of something that I think is very important.  I do not know how a clause can be included that will protect especially the Government.  A lot of people get contracts using shelf companies and before they even meet their obligations they apply for insolvency.  On several occasions, they have got away with it where they have declared insolvency after having received millions of dollars from Government.  I have the opinion that the Government, under these circumstances must be protected.

          HON. ZIYAMBI: I would like to thank Hon. Nduna and Hon. Madzimure.  Clause 100 deals with insolvency and liquidity tests, it is not dealing with insolvency with solvency and liquidity test so that directors are kept conscious about the need to ensure that they check their companies whether they are solvent or not.  So, what you were refering to   both of you does not arise in terms of this clause.  The issues of insolvency are dealt with later and they are not part of this clause.  So, I so move that we pass it as it is. 

Clause 100 put and agreed to.

Clauses 101 to 134 put and agreed to

On Clause 135:

         HON. KASHIRI: I move the amendment standing in my name. Clause 135 is amended by the deletion of paragraph (c) of sub clause (1) and the substitution of the following—

           “(c) Subject to sub-section (2), when resolving to award a capitalisation share, the board may at the same time resolve to permit any shareholder entitled to receive such an award to elect to receive payment in cash, at a value determined by the board.”

         THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): Thank you Hon. Chair, I agree to the amendments by the Hon. Member.

          Amendment to Clause 135 put and agreed to.

          Clause 135 as amended, put and agreed to.

          On Clause 136:

          HON. NDUNA: We withdraw the amendment to Clause 136; that is in collaboration with the Minister.

          Clause 136 put and agreed to.

          Clauses 137 to 150 put and agreed to.

          On Clause 151:

          HON. KASHIRI: I move the amendment standing in my name that Clause 151 is amended by the deletion of sub-clause (4) and the substitution of the following –

          “(4) The signature of a director and secretary for the purpose of sub clause (3) may be affixed to the certificate by autographic, electronic or manual means”.

          Amendment to Clause 151 put and agreed to.

          Clause 151 as amended, put and agreed to.

          Clauses 152 to 180 put and agreed to.

*HON. CHINOTIMBA: Hon. Chair, we have read all these clauses and have understood them. I am saying if there is any Member of Parliament who may think they do not understand part of the clauses or they want to make some additions, they are free to add their views now because I think we are wasting time by saying yes or no. We read the whole of this document. Let us put to the point what we do not like and state that this is what we do not like about it instead of wasting all this precious time.

THE HON. CHAIRPERSON: Thank you Hon. Chinotimba. I think we need to go clause by clause. Each one of the clauses must be mentioned. Can we proceed? We are near the end.

Clauses 181 to 194 put and agreed to.

On Clause 195:

         HON. MATARANYIKA: I put the amendment standing in my name that Clause 195 is amended in sub clause (4)(b)(ii) by the deletion of  “(5) If the board of a company has made a decision in a manner that contravened this Act, as contemplated in subsection (3) (e)—”. Thank you.

         THE HON. MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): Thank you Hon. Member. I accept the amendment.

          Amendment to Clause 195 put and agreed to.

          Clause 195, as amended, put and agreed to.

Clauses 196 to 272 put and agreed to.

          HON. MLISWA: On a point of order Madam Chair.  While we appreciate the work that has to be done, I checked to see whether there was lunch. There is no lunch and people are eating sweets to survive in here.  Others are diabetic; others are on different medications.  It is important that we understand the way forward, whether we go and eat somewhere and come back or what. It is important that that issue is resolved.

          THE TEMPORARY CHAIRPERSON (HON. MAVETERA):  Thank you Hon. Mliswa for the matter of privilege.  That is being sorted out and lunch is going to be available – [HON. MEMBERS:  Inaudible interjections.] – Order in the House Hon. Members.  Let us continue so that we finish this Bill.

Clauses 273 to 276 put and agreed to.

On Clause 277:

THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI):  Thank you Madam Chair.  I think the amendment can be accepted; subject to the following revision.  I believe what they were saying is okay but I propose that it reads as follows:

“Any changes to constitutive document registered under this section must be notified to the Registrar within the prescribed time and in the prescribed manner in default of which the party responsible for the registration shall be liable to category 2 civil penalty”.  I so submit.

Amendment to Clause 277 put and agreed to.

Clause 277, as amended, put and agreed to.

Clauses 278 to 303 put and agreed to.

Schedules 1 to 10 put and agreed to.

          House resumed.

          Bill reported with amendments.

          Bill referred to the Parliamentary Legal Committee.

          On the motion of THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI), the House adjourned at Six Minutes to One o’clock p.m. until Tuesday, 21st May, 2019.  

 

 

 

 

 

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National Assembly Hansard NATIONAL ASSEMBLY HANSARD 17 MAY 2019 Vol 45 No 52