The Department of Trade, Industry & Competition is planning to amend the Companies Act to address the two-year time bar on applications to have a director declared delinquent. Such an amendment would allow applications to be lodged after the two-year cut-off, reports BusinessLIVE.

Minister of Trade, Industry & Competition Ebrahim Patel said in a briefing to a Parliamentary Committee yesterday that consideration would be given to making the measure retrospective. 

Chief Justice Raymond Zondo recommended in his report on state capture that Section 162 of the Companies Act be amended to allow applications for directors to be declared delinquent to be brought even after two years on good cause.

The two-year time limit, Patel said, would allow some directors of companies implicated in state capture to escape delinquent applications. He said his department had drafted amendments to the Companies Act.

‘It is being taken through the Cabinet process and is expected to be considered during June 2023. Two options are being considered: either to add the amendments to the Companies Amendment Bill or to consider this in the next Companies Act legislative review.’

The challenge, he said, was the public only commented on a draft Companies Amendment Bill that did not include such an amendment as the Zondo recommendations had come out after the publication of the draft. If the amendment was included in the Bill, Parliament would have to give the public an opportunity to comment on it.

Regarding a possible retrospective amendment, he said: ‘Obviously, for this to be effective, retrospectivity would need to be an element of it. We are consulting with legal advisers on the matter. In general our courts prefer that we don’t make actions retrospective. But there are unusual circumstances where this may be justified. We looking at an appropriate formulation.’

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