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{
    "id": 45835,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/45835/?format=api",
    "text_counter": 262,
    "type": "speech",
    "speaker_name": "Mr. Michuki",
    "speaker_title": "The Minister for Environment and Mineral Resources",
    "speaker": {
        "id": 183,
        "legal_name": "John Njoroge Michuki",
        "slug": "john-michuki"
    },
    "content": " Mr. Temporary Deputy Speaker, Sir, I rise to support this Bill that the Attorney-General has brought before this Parliament because time has come to continue making our laws current and relevant, following what we have done in this country in terms of having a new Constitution. The tabling of this Bill is very timely. I think this law will assist especially at a time when we are working very hard to attract investments and trade. Kenyans continue to manage and even form new companies in this country. The culture of management of companies is taken care of in this Bill. The responsibilities of directors whether they are shareholders or purely people of capability who have been appointed by shareholders--- The directors in every company must be prepared and, indeed, they must be forced by law to take their responsibilities seriously. This is to take care of the shareholders’ interests and properties and also to make sure that the bottom line is acceptable to the investors. Unless these conditions are met, and made by law very clear, that they are the basis on which businesses would thrive, it would not be proper for directors to be permitted to do things which are not in the interest of the shareholders as we have seen in many companies. This is particularly the companies that bought coffee farms and other farms with many cattle and other things. However, all those farms have now disappeared because of poor management. Mr. Temporary Deputy Speaker, Sir, not many people know that poor management has reduced the planted acreage of coffee in Kenya by 85,000 acres. This is roughly more than one-third of the coffee that used to be produced in Kenya. Consequently, the production of coffee at a time when the prices are the best ever is very low because coffee companies were mismanaged. However, we must continue to learn from the mistakes we make. The worst thing we could do is to repeat the same mistakes. The Companies Act must this time make it clear that where a company wants to borrow, that responsibility must not be placed on the directors. The lending institutions must examine the viability of the company and not depend on the guarantee of directors. I hope the Attorney-General will take note of the fact that no longer in future shall we have lending institutions requiring directors to pledge assets other than those that are the subject of that borrowing. This is because these have nothing to do with the business. Any borrowing that any bank or lending institution has to give must be based on the viability of the company and not on the guarantees of the directors. So, I would request the Attorney-General to make sure that the aspect of borrowing and the aspect of security are outlawed in this country so that companies do not depend on what assets Michuki has because of that guarantee, but more on the business that that company will conduct to ensure that the company will repay the loan. If they are not satisfied, then obviously it will be foolish on their part to lend just because they are guaranteed by directors. That is one point I would like to emphasize in so far as this law is concerned. Mr. Temporary Deputy Speaker, Sir, the existing law requires that if a company has to go public it must have published its accounts for not less than three years so that those who are investing can see and assess the performance of that company over that period. In my opinion, the period of three years is too short. I think companies should be required to publish their accounts for a period of five years before they qualify instead of three years. We need investments now than ever before. Our target within the Vision 2030 to create a society that no longer sings about poverty is a commendable one, but it must be supported by laws that encourage more and more assets and earnings. It should also encourage more and more people to get out of poverty."
}