MPAHLWA, Minister of Trade and Industry, hereby, in terms of the Companies Act, 1973 (ACT No 61 of 1973), publish the Companies Amendment Bill for public comment.
The development and enforcement of financial reporting standards.
The promotion and maintenance of the independence of auditors.
The indemnification and imposition of a duty of confidentiality on inspectors.
Issues to be contained in the prospectus.
or fax 012-3942506 on or before 5 August 2005.
Words struck out and in square brackets indicate omissions from existing enactments.
Words underlined with a solid line indicate insertions to existing enactments.
To amend the Companies Act, 1973, so as to provide for the development and enforcement of financial reporting standards, to promote and maintain the independence of auditors, to update the requirements for registration of a prospectus, to further the objective and expedite the procedures of the Securities Regulation Panel, to indemnify and impose a duty of confidentiality on inspectors, and to provide for incidental matters.
"inspector" means a person appointed bv the Minister in terms of section 254. 257.
offer its shares to the public.
is not a subsidiarv or associate of, or joint venture with a public interest company, that is authorized bv unanimous consent of its members to operate as a limited purpose companv for purposes of this Act: movided c.
Neither the State, nor the Reqistrar. an inspector, or any officer or other person havinq duties to perform under this Act, shall be held liable for any loss sustained by or damaqe caused to any person as a result of any bona fide act or omission relatina to the is proved.
must be reqistered as a supplement to the prospectus, simultaneously published to known recipients of the prospectus and included with any future distribution of the prospectus.
Permission to withhold information the issuer's competitive or other interests. the Registrar mav.
shall be in writing and accompanied bv the prescribed fee.
There shall in addition be entered in the said register the name and date of appointment of the auditor of the company and, where the auditor is a firm, also of the nominated auditor specified in section 274(2), and, in each case, the date and particulars of any change of such name and date of appointment.
of the undertaking of the company; or the who-te or the greater part of the assets of the company.
unless it authorizes or ratifies in terms the specific transaction.
as a disposal by the holding company.
a court: or with the permission of the Minister.
reqistered auditors to be appointed be appointed auditor of a company unless that person is a reqistered auditor.
269A Audit committees for public interest comDanies of a company which, on the qualifvinq date, is a public interest company.
is an independent non-executive director if, except as a director and member of the audit committee, the director does not receive any remuneration or other benefit (whether direct or indirect).
to the board of directors is a reference to the board exclusive of anv director who, at the time of the appointment, is a member of audit committee of the company.
company shall at every annual general meeting appoint an auditor or auditors to hold office from the copclusion of that meeting until the conclusion of the next annual general meeting of the company.
he is not qualified for reappointment; or a resolution has been passed under section 278; or he has given the company and the Registrar notice in writing of his unwillingness to be reappointed at the next annual general meeting.
The provisions of subsection (2) shall not apply the tenure of an audit committee: or where notice of an intended resolution to appoint some person or persons in place of a retiring auditor has been duly given under section 279 but cannot be proceeded with by reason of the death, incapacity or disqualification of that person or of all those persons.
to receive and deal appropriatelv with any complaints (whether from within or outside the companv) relatinq either to the accountinq practices, includinq internal audit, of the company or to the content or auditinq of its financial statements or to anv related matter.
of subsection 1 with respect to the proposed auditor.
Neither the appointment nor the duties of an audit committee of a public interest company shall reduce the functions and duties of the board of directors of the company except with respect to the appointment, fees and terms of enqaqernent of the auditor.
A public interest company shall meet all expenses reasonablv incurred by its audit committee includinq, if the audit committee considers it appropriate, the fees of anv consultant or specialist ensased bv the audit committee to assist it in the performance of anv of its duties.
ascertain that the auditor does not.
consider undertaken bv the auditor: and whether the auditor's independence may appointment.
Except in the case of an appointment bv the Reqistrar, subsection (1 has effect subject to section 2 70A(2).
shall, if such auditor be the only incumbent, be filled by the directors within thirty days, and the provisions of section 271 shall mutatis mutandis apply in regard to the filling of such vacancy and the duty of the company; or may, if there be more than one incumbent, be filled by the directors, but while any such vacancy continues, the surviving or continuing auditor shall act as auditor of the company.
in the case of a vacancy in the office of auditor of a public interest company arisina durinq the tenure of an audit committee: and. in such a case, if the nominated auditor dies, or the auditor or nominated auditor becomes disaualified. resiqns or is removed. the directors shall within twenty to the audit committee a reqistered auditor to become the new auditor.
If, in such a case as is described in subsection 21, the former nominated auditor was a member of a firm and the firm itself is not disqualified or removed, onlv another member of the firm may be proposed to the audit committee to be the new nominated auditor.
If, within ten days of the making of a proposal to an audit committee under subsection (2).
the audit committee does not give notice in writins to the directors reiectinq the proposed auditor, the directors shall proceed to the appointment either bv appointinq the auditor or, as the case may require.
bv selecting the new nominated auditor.
In this Chapter "nominated auditor" means the individual mentioned in subsection 274(2).
This section applies where the reqistered auditor appointed as auditor of a companv is a firm.
The appointment of a firm as auditor of a public interest comoanv shall not be valid unless the appointment specifies, in addition to the name of the firm, the name of the individual reqistered auditor (beinq a member of the firm) who undertakes the audit.
In the case of a companv for which a firm is appointed as auditor for a financial year, a chanqe in the cornPosition of the members of the firm shall not of itself constitute a casual vacancv in the office of auditor for that vear, but if. bv comparison with the membership at the time of the appointment. less than one half of the members of the firm remain after any such chanqe, the occasion of that chanqe shall be taken as a resiqnation of the auditor and a casual vacancv shall be taken to have arisen accordinglv.
The same individual may not serve as the nominated auditor of a public for more than four consecutive financial vears.
Where an individual has served as the nominated auditor of a public interest company for two or more consecutive financial vears and then ceases to be the nominated auditor, the individual may not aaain become the nominated auditor of that company until of at least two further financial years.
by deleting the phrase if he is registered under the Public Accountants' and Auditors' Act, 1991 in subsection (3).
The Minister may prescribe further descriptions of services which an auditor may not perform for a public interest companv durinq a financial vear for which he is the nominated auditor.
does not affect the power of an audit committee under section 270AU)(d) to limit further the services which an auditor of a public interest companv may perform; and to any limitation imposed on an auditor in relation to a particular company bv virtue of section 21 of the Auditinq Profession Act 2004 (auditor havina financial interest in companv excluded from audit).
An auditor intending to resign shall deliver to the company and to the Registrar a written notification in the prescribed form to the effect that he has no reason to believe that in the conduct of the affairs of the company a reportable irregularity, within the meaning of section 22 of the Auditina Profession Act 2004 has taken place or is taking place which has caused or is likely to cause financial loss to the company or to any of its members or creditors, other than an irregularity (if any) which has been reported to the f%ibtk under that Act, and it shall not be necessary that such an auditor shall have carried out, for the purposes of such notification, a special audit subsequent to the date up to which the last annual financial statements on which he has already reported, were made up.
The directors of the company shall forthwith upon receipt of the said written notification w proceed to the appointment of an auditor in accordance with section 273 to fill the vacancy and shall lodge the said notification together with the return required under section 276 with the Registrar.
The resignation of an auditor shall become effective upon the receipt by the Registrar of the written notification referred to in subsection (2).
at the expiration of that period of three months was a director of the company or became a director of the company after that period has expired and before the filling of the vacancy; and was aware of the vacancy but failed to take all reasonable steps to ensure that it would be filled in accordance with subsection (3), shall together with the company be jointly and severally liable for all debts incurred by the company during the existence of the vacancy.
fin an ciaI re port in q issued in terms of section 440U(2).
"user" in relation to a financial reDort, means a shareholder, creditor, on information published bv the company.
Section 284 of the principal Act is hereby amended by deleting the word "annual" in the second last line of subsection (3).
a directors' report complying with the requirements of this Act; and an auditor's report as required by section 301.
b. by the deletion of subsection (3).
Not more than one month before the date of ah at which the board of directors of a public interest company will vote to approve the financial statements of the company for anv financial Vear-we-Wx the nominated auditor must attend a meetinq of the audit committee to consider to the auditor or the ba-d-audit committee to be of importance and relevant to the proposed financial statements and to the affairs of the company general Iv.
At everv annual qeneral meetinq of a public interest companv at which the financial statements of the companv for a financial vear are to be considered or aqreed. the nominated auditor must attend and respond to the best of his or her abilitv to anv question which is put to the auditor and is relevant to the audit of the financial statements.
If the nominated auditor fails to attend a meetinq as required bv subsection (1) or subsection (2).
the nominated auditor ensures that another individual who is a reqistered auditor attends the meetinq in place of the nominated auditor and carries out the duties of the nominated auditor at the meetinq; and if the nominated auditor is a member of a firm, the individual attendinq the meetinq in place of the nominated auditor is a member of that firm.
If, in the case of a companv other than a public interest comDanv due notice is qiven of the intention to move a resolution reauirinq the presence of the auditor at an annual qeneral meetinq of the companv at which financial statements of the company for any financial Year are to be considered, the auditor shall attend that meetinq and respond to the best of his or her abilitv to anv question which is put to the auditor and is relevant to the audit of the financial statements.
the nominated auditor is prevented bv circumstances beyond his or her control from attendinq the meetinq: and the auditor ensures that another individual who is a reqistered auditor attends the meeting in place of the nominated auditor and carries out the duties of the nominated auditor at the meetinq.
In this section "nominated auditor" has the meaninq qiven by section 274(3).
of company which d incomplete in any material particular or otherwise does not comply with the requirements of this Act, tsJa.4 issued, circulated or published, the company and every director or officer thereof who is a party to such issue, circulation or publication, shall be guilty of an offence.
For the purposes of subsection (1).
and in this subsection "scheme" includes any structure or form of words.
If a director or other officer of a company is found quiltv of an offence under section 287 in respect of an inaccuracv in or omission from anv financial statement, the director or other officer shall of an offence under this section in respect of the same inaccuracy or omission.
by the deletion of subsection (2); and by the deletion of the word "annual" in subsection (3)(a).
accordance with the financial reportinq standards referred to in section 286A(1).
b. by the deletion of subsection (2).
A limited purpose company need not consolidate financial statements.
directors required information about the state of affairs, business and profit or loss of the company and its subsidiaries would be presented more effectively and meaningfully in the manner v set out in subsection (2).
more than one set of consolidated annual financial statements, i.e.
Group financial statements may be whollv or partly incorporated in the company's own financial statements.
financial statements of a limited purpose company need not deal with a subsidiary if the directors of the company are of the opinion that it is impracticable or would be of no real value to members of the company, in view of the insignificant amounts involved, or would entail expense or delay out of proportion to the value to members of the company and, if the directors are of such opinion about each of the company's subsidiaries, group annual financial statements shall not be required.
the business of the company and that of a subsidiary are so different that they cannot reasonably be treated as a single undertaking or are of such opinion about each of the company's subsidiaries, group annual financial statements need not deal with that subsidiary, or, as the case may be, no group annual financial statements shall be required&Wie c. by deleting subsections (3) and (4).
and deleting the word "holding" before "company" in the first line.
Every public company having a share capital, other than a wholly owned subsidiary, shall not later than three months after the expiration of the first period of six months of its financial year send to every member and holder of debentures of the company an results1 of the company, or in the case of a holding company, of the company and its subsidiaries, during the said period of six months?
where a company has changed the end of its financial year under section 285 (2) (b) an additional interim report shall be made out for the period from the beginning of the financial year so changed to the date of the end of the financial year before it was so changed.
Every interim report and all provisional annual financial statements of a company shall be approved by the directors and signed on their behalf by two of the directors or. if there is onlv one director. bv that director.
(1 4) The panel may delegate any of its powers t+-&e which may be established by the panel.
b. by deleting the words "its executive committee or" in the first line of subsection (6).
at his request be allowed, at his own expense and under the supervision of the investigating officer, to make copies thereof or to take extracts therefrom at any reasonable time.
and who, without sufficient cause (the onus of proof of which shall rest upon him), fails to attend at the time and place specified in the summons or to remain in attendance until he is excused by the chairperson thereof from further attendance or, having attended, refuses to be sworn or to make an affirmation after he has been asked by the chairperson (or a person appointed by him) to do so or, having been sworn or having made affirmation, fails to answer fully and satisfactorily any question lawfully put to him, or fails to produce any book, document or other object in his possession or under his control which he has been summoned to produce, shall be guilty of an offence.
the executive director or the on any matter, knowing such evidence to be false or not believing it to be true, shall be guilty of an offence.
'regulator' means a statutory body with Dowers to or supervise companies or the tradinq of shares in companies and includes any self-requlatory orqanisation as defined in section 1 of the Securities Services Act, 2004 (Act of 2004). havina such powers.
Standards Council ("the Council").
The Council's obiective is to protect users of financial reports bv developing financial reportinq standards.
one person nominated bv the executive officer of the Financial Services Board: and one person each nominated bv every requirement.
The Council shall be autonomous and its members shall serve to promote the obiective of the Council.
and selected in terms of subsection (2).
who are not full-time emplovees appoint the chairperson and deputv chairperson of the Council.
shall be appointed everv three years and may not serve for more than six consecutive years.
at the time the Council is established. shall be former members of the Accountinq Practices Board: and at everv subseauent appointment. shall be former members of the Council.
who becomes insolvent.
serious misconduct: or conduct that undermines the intearitv or obiective of the Council.
time other than the close of a three Year cvcle shall be filled in the manner described in subsection (2).
meet at least three times a Year on dates set bv the chairperson.
Council at which at least ten members are present constitutes a decision of the Council.
The Council mav establish and appoint members to sub-committees to assist in performins the functions of the Council.
of the Council shall be open to the public.
public interest companies: and limited purpose companies.
Financial reportinq standards issued in terms of subsection (1) shall be in accordance with the International Reportinq Standards of the International Accountinq Standards Board or its successor bodv.
440T Interested persons in respect of Council wishinq to receive notice of vacancies on the Council, advance notice of meetinqs of the Council or drafts of anv prospective amendment to resister with the Council as an interested person.
prospective amendment of financial reporting standards.
submit financial reportins standards to the Minister.
The Minister shall issue financial reportinq standards on advice of the Council bv publication in the Gazette.
The Minister mav from time to time, after consultation with the Financial Services Board, specifv, proclamation in the Gazette, types or cateqories of companies to be monitored in terms of this section.
appear at a place desiqnated bv him or her to be questioned.
Investigations Panel ("the Panel").
and persons selected in terms of subsection (2).
not serve for more than six consecutive vears.
at the time the Panel is established, shall be members of the CAAP Monitorina at everv subsequent appointment, shall be former members of the Panel.
becomes insolvent. is certified mentallv unfit.
fails to disclose a conflict of interests; or incapacitated.
A vacancy arising at anv time other than the close of a three vear cvcle shall be filled in the manner described in subsection (2).
A person wishinq to receive notice of vacancies on the Panel mav reqister with the executive officer of the Panel as an interested person.
determine the procedures to be followed at its meeti nas determine the procedures to be followed bv an investiqation com meet at least twice a year on dates set bv the chairperson.
shall be in accordance with the Promotion of Administrative Justice Act, 2000.
Every member shall have one vote and the decision of eleven members at any meetinq of the Panel at which at least fourteen members are Dresent constitutes a decision of the Panel.
The Minister. the Resistrar. the Financial Services Board, and any other requlator or user who has reason to believe that a financial report of a public interest companv failed to complv with a financial reportinq standard, mav refer the matter to the executive officer of the Panel for investiqation.
the amount of the penaltv agreed won and how it was calculated.
The executive officer shall within five business davs of a matter beinq referred under subsection 1 1 assess whether the matter warrants investhation; and. if so submit to the chairperson of the Panel a statement of the reasons, with reference to the financial reportinq standards concerned.
serving on the committee would qive rise to any other conflict of interests.
a person qualified in law: and at least two persons qualified in accountinq.
within 18 business davs of its commencement, deliver a written report on the findinqs of its investiqation to the executive officer.
If the committee fails to conclude its investiqation within the 18 business davs provided, the committee shall deliver a provisional report. and the executive officer may then allow additional time or otherwise direct how the investiqation should proceed.
must record the different opinions.
submit written responses to questions appear at a place desiqnated bv the committee to be questioned.
member of an investiqation committee shall keep confidential the names of the other members of the committee and anv information disclosed to him or her durinq the course of an investiqation and not or use it for any purpose other than to discharue their duties under this Chapter or to comply with anv law.
Anv person who contravenes the provisions of subsection 1 shall be quiltv of an offence.
After due consideration of the response, the investiqation committee may amend the report and must within 14 business davs of receipt of the company's response. resubmit the report to the executive officer.
If no response was received bv the date specified in subsection (2).
within 2 business days of that date, or if a response was received, within 2 business davs of the resubmission of the report.
any the South African Institute of Chartered Accountants or other professional bodies: and the media.
Two months after its publication, a report shall become available for inspection bv the public at the office of the Resistrar.
revise and republish the financial report: or take any other remedial action, within a certain time.
shall be decided bv the nominated officer in consultation with the executive officer and the chairperson of the Panel.
If a company and the nominated officer do not reach aqreement under subsection (2).
or if the or take remedial action as aqreed. the nominated officer mav hand the matter over for prosecution.
A court shall not convict a companv or director of an offence under subsection (1 if it is satisfied that the companv has performed substantiallv in terms of an aqreement under subsection (2).
The Minister. in support of the Council and the Panel.
The Minister shall remunerate members appointed under sections 440Q 1 and 440X1 and reimburse reasonable expenses incurred in the performance of their duties.
to timing differences.
"material item" means any information relating with other information, could influence the economic decisions of users of the company's financial statements.
The whole of this Schedule amlies to Limited Purpose Companies.
Part 111 28.30-33, 36, 37.40 -42.45, 56 -60and 73 of Parts I.
and IV, from time to time bv the Financial Reportina Standards Council.
1 and the extent of outside owners' interest relating to these items.
Part I : E.
ExceDt in the case of the first financial statement, the correspondinq amounts for the precedinq period for all items shown in the statement of chanqes in eauitv shall be stated.
each item of income and expense for the period that, as reauired bv accountina standards to be recoqnized directly in eauitv.
and (b)), interest: and for each component of eauitv, the effects of chanqes in accountinq policies and corrections of errors.
the balance of retained earninqs i.e.
accumulated profit or loss at the beqinninq of the period and at the balance sheet date, and the chanqes durinq the period: and a reconciliation between the carrvinq amount of each class of contributed equity and each reserve at the beqinninq and the end of the period, separately disclosins each chanqe.
The Bill introduces a number of urgent amendments required prior to the anticipated completion of the corporate law reform process which is currently underway.
the objectives and expedite the procedures of the Securities Regulation Pane1;d amendments required to indemnify and impose a duty of confidentiality on inspectors; and an amendment required to effect a uniform standard of 1 iabilitv on officers performing duties under the Act.
Because investors make financial decisions based on information published by companies, it is necessary that this information be accurate and reliable.
As long as a variety of accounting methods are possible, companies are able to select the mode of accounting that presents their financial position in the most favourable light.
The amendments to Chapter XI of the Act will impose a uniform accounting standard to ensure that any financial information published by a company is calculated in accordance with generally accepted accounting practice ("GAAP").
This_ stadard will be developed and maintained by a Financial Reporting Standards Council ("the Council"), to be established under the new Chapter XVB.
The standard will need to be comparable with the international standards adopted from time to time by the International Accounting Standards Board. This will ensure a tight correlation between the accounting practices of South Africa and the international investment community -making our capital markets more accessible to foreign investment.
An officer within the Department of Trade and Industry will become responsible for monitoring compliance with prescribed accounting standards. Together with other regulators -such as the Financial Services Board -and investors, the Department may refer any apparent non-compliance with standards for investigation by a team of experts, to be drawn from a newly established Financial Reporting Investigations Panel.
If an investigation finds evidence of non-compliance, the Registrar may require the company to republish the information, take other remedial action or pay a penalty. If the company fails to co-operate, the matter may be handed over for prosecution in terms of a new offence created under the proposed section 440FF.
Where the Act has previously tried to create an accounting and disclosure framework through various of its provisions, these are both incomplete and outdated. Most of these provisions will be deleted in favour of the comprehensive new standard to be imposed by the Council. This also avoids the risk of discrepancies developing over time between the legislative requirements and the standard imposed by the Council.
Since the standard to be imposed is primarily for the benefit of investors, and since it is an onerous standard, it is necessary to make provision for closely held companies that do not offer their shares to the public. The amendments thus propose a category of company referred to as "limited purpose companies" -which will be allowed to deviate from the financial reporting standards imposed on other companies (viz. "public interest companies"), provided that all shareholders consent, and provided also that the deviation is noted and reasons given.
As a further concession, certain other options will be retained for limited purpose companies, while being repealed for public interest companies.
Schedule 4 of the Act has historically served as a detailed specification for disclosure in financial statements.
careful review of this schedule has identified those areas that are dealt with in current statements of GAAPand those provisions that are supplementary to GAAP. The supplementary provisions have been retained for all companies, whereas the other requirements have been retained for limited purpose companies only. This has the effect of maintaining a secondary, less onerous financial reporting standard for limited purpose companies.
Schedule brings about this distinction.
Schedule will dispense with various anachronisms and bring about a tighter correlation with GAAP.
Amendments to promote and maintain auditor independence.
These amendments are incidental to the provisions of the proposed Auditing Profession Bill ("the APB"), which aims to address recent failures by auditors to perform an independent assessment of the accounting records and policies of their clients. The APB will bring about a more stringent regulation of the auditing profession and make provision for an Independent Regulatory Board for Auditors and for a Standard-Setting Board for Auditor Ethics and Auditing. The APB will be submitted to Parliament concurrently with this Bill.
By virtue of the new section 2685 to the Companies Act, only auditors registered under the Auditing Profession Act may in hture be appointed as auditors of companies. This means that all audits of company accounts will henceforth be subject to the controls and safeguards of that Act.
Many cases of auditor malpractice seem to have stemmed from auditors having too close an association with their clients. Several measures are introduced to ensure that auditors will remain independent and not prone to "capture" by the company's Board of Directors.
The new section 269A'requires that auditors be nominated by an audit committee, which will also be responsible for setting the auditor's remuneration. By the new section 274A, a rotation of auditors will be required.
may be appointed to a company for more than 4 consecutive years. The new section 275A will preclude an auditor from performing certain non-audit services for the company.
The distinction created between "public interest companies" and "limited purpose companies" for purposes of compliance with accounting standards, will also apply in relation to audit committees and the rotation of auditors. These requirements will thus apply only to public interest companies, with the current less onerous standard prevailing for limited purpose companies.
A company's opportunity to remove an auditor, or for an auditor to simply resign and walk away, when an irregularity has been detected, is curtailed by the amendments to sections 277,278 and 280.
The new section 287A makes it an offence for any auditor or other person to be party to false or misleading information in the financial statements of a company.
The revised 3rd Schedule specifies more hlly the form and content of the prospectus.
Both the scope and detail of information required for a prospectus have been extended. This will close the current gap between the JSE listing requirements and the information to be provided in a prospectus. Because the ambit of information required in terms of the JSE listing requirements is so extensive, they make provision for an exemption from certain of the requirements -where publication of specific information may cause undue prejudice to the issuer. In view of the more onerous prospectus requirements introduced under the revised 3rd Schedule, it is considered necessary for the Act to provide the Registrar with a similar discretion.
The amended Schedule 3 requires disclosure in the prospectus of any dispensations obtained under section 148A.
The Companies Act contains a number of provision designed to protect minority shareholders of a company in the event of a takeover bid.
to regulate affected transactions.
Section 228 currently allows directors to dispose of the assets or greater part of the business of a company by an ordinary resolution of the shareholders. (A change of name, by contrast, would require a special resolution.
Section 228 is being used more and more often for purposes of effecting a takeover -as an alternative to section 440K which has more stringent requirements.
authorized 27 transactions in terms of section 228 and 33 transactions in terms of section 440K.
For the year ended February 2004, 17transactions were authorized in terms of section 228 and 16 in terms of section 440K.
) will require that the 1 disposal of the greater part of assets of the business of a company should henceforth require a special resolution.
"substantially the whole" in relation to the disposal of a business undertaking, in order to avoid the application of subsection 228(1).
is to henceforth apply the more objective test already used in respect of assets, namely "the greater part", also to the disposal of a business undertaking.
Certain legal opinions hold that a disposal by a wholly owned subsidiary does not fall within the jurisdiction of the SRP -no matter how material it is in relation to the consolidated balance sheet of the holding company. This is because the Securities Regulation Code applies only to public companies and private companies of which shareholder capital exceeds R 5 million and which have ten beneficial shareholders. (A wholly owned subsidiary only has one beneficial shareholder.
The objective to protect minority shareholders in the holding company is thus defeated in such circumstances.
Subsection 4 is inserted to remedy the current anomaly.
need to be attended to speedily. Long delays may have a negative impact on the prospects of the companies involved.
These sections provide for the establishment of an executive committee of the SRP to hear appeals against the decisions of the Executive Director before the appeal is heard by the full Panel. This delays the bringing of appeals to finality and increases the costs for all parties. (One such hearing was only finalized after a year, and the SRP alone incurred legal costs of approximately R 1 million.
The amendments will dispense with intermediate appeal to the executive committee in order to shorten the appeal process and reduce costs to all parties.