MEMBERS of Parliament (MPs) have passed the Companies Bill 2024, which ensures, among other things, that every registered company has at least one resident director who can be held accountable for any corporate wrongdoing.
The MPs are of the view that the legislation would go a long way towards preventing future incidents where investors would come to the country, siphon funds, and take advantage of local resources only to leave without being held accountable.
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They insisted that the law should prevent another incident similar to Ecsponent, where investor funds were allegedly siphoned through sister companies, leaving investors in limbo.
Another advantage of the Bill is the ease of doing business through the digitisation of company registration, aimed at increasing efficiency and reducing costs.
This was during the debate and adoption of the report of the Ministry of Commerce, Industry and Trade Portfolio Committee on the Companies Bill 2024 in the House of Assembly yesterday.
While motivating for the adoption of the report and passing of the Bill, Portfolio Committee Chairperson Masiphula Mamba said the law sought to digitise company registration.
He explained that this would enable Emaswati and investors to register companies in the comfort of their homes using mobile phones.
Mamba said this would increase efficiency, reduce costs, and boost economic activity.
“Some local and foreign investors were discouraged to register companies by bureaucracy, resulting in many operating in the shadow economy,” he said.
He added that the ease of doing business would also attract foreign direct investment (FDI), improve record-keeping, and enhance compliance in remitting taxes.
Kwaluseni MP Sifiso Shongwe, who seconded the Bill, said it would also ensure there was at least one resident director to be held accountable for corporate wrongdoing.
“In the past, some investors came to the country, operated businesses from their briefcases, and left without accounting for any wrongdoing,” he said.
Shongwe also noted that the Bill would help Eswatini meet anti-money laundering standards.
Lobamba Lomdzala MP Marwick Khumalo urged that the Bill should also compel government to pay companies on time, as many collapsed because they were owed by government, the biggest debtor.
“The Bill should include a specific time frame in which companies owed by government should be paid,” he said.
Mbabane East MP Welcome Dlamini said the law should ensure that incidents such as the Ecsponent saga, where E340 million was lost, are prevented. He stressed that in that case, local directors were involved yet not held to account.
Sigwe MP David “Cruiser” Ngcamphala said the Bill should also compel foreign investors to transfer skills to locals so that when they leave, businesses can survive.
He explained that this would ensure jobs are not lost once investors exit.
Ngcamphala further echoed concerns raised by colleagues that most businesses collapse because they are owed by government, while taxes and bank loan interests continue to rise.
He added that the law should protect the interests of local businesses.
The MPs passed the Bill following the debate.
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