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{
"id": 570555,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/570555/?format=api",
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"type": "speech",
"speaker_name": "Hon. Musimba",
"speaker_title": "",
"speaker": {
"id": 1804,
"legal_name": "Patrick Mweu Musimba",
"slug": "patrick-mweu-musimba"
},
"content": "which notable entrepreneurship grew. That was in the early 1950s, 1960s and 1970s. To name just but a few we had the late Njenga Karume, the late Phillip Ndegwa, Duncan Ndegwa and James Mwangi, who developed quite impressive empires. We have seen a lot of companies formed in the past. With this legal backing, we will grow more of them. The transition from Cap. 486 itself will herald a new kind of corporate governance, as I alluded to earlier on while commending the Chairman of the Departmental Committee on Justice and Legal Affairs for a job-well-done, I said that any company with share capital above Kshs5 million ought to have its directors getting corporate governance training. This will ensure that contracts, especially when it comes to getting procurement from Government entities, go to people who are thinking in the right way and not just thinking about briefcases, how they will get deals, go away and not measure up to the legacy that they leave behind. When it comes to our lawyers, our brother, Hon. T.J. Kajwang’ alluded that their work was only about stamps and making Kshs50,000. This Bill gives a great opportunity to lawyers because we will have more conveyancing agreements. In my experience, a lot of start-ups fail within three years largely because they lack proper advice, especially legally, because one approaches a lawyer and you think he is going to cost a lot, then you go ahead in your own wisdom, enter into a contract and you only know it has blown up when you are holding the wrong side of the carrot stick. When we limit the role of the company secretaries for companies below a certain level, that will reduce the cost burden of this particular cadre of advisors. We encourage strongly, through this Bill that each business adopts proper advice that will ensure that our start-ups succeed and the number of litigations within our courts drastically reduce. When it comes to take-overs and mergers, this Bill has done a great job in synchronising them with the Capital Markets Authority (CMA) Act. The whole essence of business is capital formation. If I start a particular business and grow it to look good, when I sell it and with ease of selling it, I will make money and transit through. With the adoption of equivocal international accounting standards within this Bill, you will, for the first time, compare mangoes to mangoes and bananas to bananas as opposed to looking at one set of accounts and wondering whether they are in congruence with accounting standards because everybody is reporting differently. That has been the way people have been hiding losses which could be the case when you look at companies like Mumias Sugar Company, which in a couple of years was making profits, then all of a sudden it went into losses and you wonder what went wrong. You will find it is in the application of standards. I hope this particular Bill will address that. We will finally have a measurable standard. This is when we talk about top 100 companies growing our knowledge, skills and attitudes among our entrepreneurs and the human capital which gets absorbed into this particular environment. By growing, we have brought ourselves to a world standard. As we embrace elements of e-commerce, and Hon. Millie Odhiambo alluded to this, the greatest threat worldwide is that of cyber-security. These are things which are very sensitive because your 100-year legacy can disappear overnight. We have global examples like the Barings Bank International, which went into futures trading, and all of a sudden a bank which had been in existence for over 100 years disappeared overnight leaving shareholders in quite a disastrous position. This Bill says that directors will be held liable for the losses which will be canvassed, so that you do not have a situation where directors have happy days and shareholders are really crying out because they are loading a lot more in terms of management expenses and The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
}