FOLLOWING various public discussions concerning the shareholding of the Zambia National Service (ZNS)’s private company, the Eagles Holdings Limited, the Patents and Companies Registration Agency (PACRA) has seen the need to clarify on the matter.
Last month, ZNS announced its official launch of Eagles Holdings Limited group of companies with an aim of diversifying its offerings beyond its core role in National development.
However, as welcoming as the news was to most sections of societies, some individuals such as the Socialist party did not fully welcome the company, especially that the ZNS Commander Lieutenant General Maliti Solochi was registered as one of the shareholders in Eagles Holdings Limited.
The move has received a lot of criticism from various stakeholders who argued that the Minister of finance, Situmbeko Musokotwane should have instead been registered as provided by the law.
But PACRA, through a statement issued by its Register and chief executive officer, Benson Mpalo has clarified that it is actually not mandatory for the Finance Minister to be listed as a shareholder in all private companies formed by government institutions, like in the case of Eagles Holdings.
He said whilst section 3 of the Minister of Finance (incorporation) Act, chapter 349 of the laws of Zambia declares the Minister of Finance as a corporation sole with power to hold shares in any company, the provision does not make it mandatory for him to be a shareholder in all private companies incorporated by government agencies.
“Further, the Companies Act, No. 10 of 2017 provides that a shareholder must be a person and the word ‘person’ according to the Interpretation and General Provisions Act, Chapter 2 of the Laws of Zambia, includes not only a natural person but also “any company or association or body or persons, corporate or unincorporate,” said Mpalo.
Mpalo added that in view of the foregoing, where government institutions seeking to incorporate a private company are in doubt of who must hold shares, PACRA has always guided that the Minister of Finance, being a corporation sole, should be considered an option.
He explainec that this does not entail that it is mandatory for the Minister of Finance to be listed as a shareholder in all companies registered by a Government institution.
“PACRA would like to clarify further that concerns relating to such matters as dividends or transfer of shares upon vacation of office by individuals holding shares in a company where Government has an interest can be addressed in the Articles of Association or through a Shareholders’ Agreement at the incorporation stage,” stated Mpalo.
By Buumba Mwitumwa
Kalemba June 6, 2024
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