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{
    "id": 575516,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/575516/?format=api",
    "text_counter": 339,
    "type": "other",
    "speaker_name": "",
    "speaker_title": "",
    "speaker": null,
    "content": "General (AG) has also been mandated to apply to court to liquidate a company on grounds of public interest. Where a company is suspected of commission of offences, or where information has been obtained from the Capital Markets Authority under the Capital Markets Act, or the Registrar of Companies or directors are convicted of offences involving fraud, the AG can apply for these companies to be liquidated. As you have heard in the past, there are companies which have been trading in very suspicious commodities, famously known as cocaine and the rest. If those companies are found to be trading in those commodities, the AG can apply for direct liquidation from court, so that those companies can cease causing a lot of trouble in this country. The mandate of the Official Receiver has been expanded. The Bill has placed upon the Official Receiver the duty to conduct investigation into the failure of a company. If need be, the Official Receiver can apply to court to have any person examined in court. For the first time, this provision has been introduced to ensure that companies, as you mentioned earlier, will practise good governance. The Kenya Airways Limited (KQ), for instance, came out of serious financial problems in the past but it has again gone into problems. Now, this particular Bill will ensure that past Managing Directors (MDs) and past Chief Finance Officers (CFOs) will be held to account. As we may have seen recently, the Senate is purporting to carry out some investigation in which they have no role. This is a matter which should have been handled by the Departmental Committee on Finance, Planning and Trade, or the Public Investments Committee of this House, so that we can make sound decisions in terms of resolutions that can be implemented. As it is right now, that will be more of a talk show as opposed to seeking solutions to resuscitate KQ. Clause 474 is new to our laws. It makes it possible for an unsecured creditor to share in the assets of a company under liquidation where there is a floating charge on the company’s property. This provision will place a holder of a floating charge in the same position as an unsecured creditor in sharing the company’s assets. The Bill also gives power to the courts to rescind contracts entered into by a company in liquidation before liquidation. Questionable contracts may be set aside, thereby ensuring the financial viability of companies. This protects people who do good business from those who seek to take advantage of their positions in which they have been declared insolvent. The Bill also seeks to give power to the liquidator to transfer assets of the company to its employees, provided the company’s liabilities have been fully satisfied. As it is right now, there is no provision for this. When a company is wound up and there are some assets still, monies cannot be transferred to the employees who have worked very hard to ensure that that company gets to where it is. This power is, however, subject to authorisation by a resolution of the company and/or the company’s articles must provide for it. However, the law is also there to assist and ensure that that is done. In Clause 487, it exempts documents relating to a company in liquidation from stamp duty. This is so that companies that are in liquidation and need to transfer certain assets are exempted from stamp duty. The Bill also introduces new offences during the liquidation period. Previously offences related to before liquidation were exempted. However, there is a new law that ensures that those who commit offences during and before liquidation are held responsible. There are serious penalties that have been prescribed thereon. 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."
}