AfriForum criticises economically destructive Companies Amendment Bill
28 October 2021
The civil rights organisation AfriForum today submitted a written submission to the Department of Trade, Industry and Competition after Ebrahim Patel, Minister of the Department, published a call for comments on the Companies Amendment Bill 2021 in the Government Gazette Nr. 45250 of 1 October 2021.
AfriForum wishes to state categorically that it recognises and supports the object of 1) addressing South Africa’s extreme societal inequality and the need for greater transparency in public financial affairs, and 2) combatting corruption in all spheres of financial conduct. AfriForum argues that, although the objectives of the amendments seem to be noble at first glance, it will not achieve these aims, but will lead to a host of other problems that the Department did not consider. AfriForum addresses three major issues with the proposed amendment in its comment:
The Companies and Intellectual Properties Commission (CIPC) will be allowed to make the company shares register available to anyone “as prescribed”. Moreover, it will also keep a public register of all public shareholders in all registered companies. This opens the door to more government interference in the ownership of companies.
In terms of the proposed amendments, the Companies Tribunal will have the authority to hear cases on broad-based black economic empowerment (B-BBEE) that are referred from the B-BBEE Commission. The Companies Tribunal will therefore be able to make B-BBEE more binding and obligatory. This is cause for major concern.