Telecommunications firms may be declared "public interest companies" under the new Companies Act, now out as a discussion Bill.
Public interest companies have greater responsibility to a wider public and will be subject to more demanding disclosure and transparency provisions.
Tshediso Matona, director-general of trade and industry, yesterday told journalists at a briefing on the Bill that it was premature to identify specific companies as being in this category.
"It is not wise to anticipate which companies may be affected by this," he said after Department of Trade and Industry deputy director-general for consumer and corporate regulation Astrid Ludin said she believed essential infrastructure companies fell into this category. Companies mentioned in this regard included fixed-line and cellphone operators.
Section nine of the draft law defines a "public interest company" as any company, private or public, large or small, that "takes deposits from the public or exercises a public trust; has a substantial or significant impact on the environment; contributes to public health; or supplies or maintains essential goods, services or infrastructure".
The section also puts a threshold in place. To be included in the "public interest company" category, an entity must meet any two of the three criteria within a three-year rolling period: a turnover of R50 million, assets worth R25 million, or at least 250 employees.
"Public interest companies" will be required to appoint at least four directors, have in place an audit committee, comply with prescribed financial reporting standards and appoint an auditor, as well as receive an auditor's report on its financial statements.
These standards may be different from that of companies not deemed to be public interest entities. Such firms will also be required to have in place a "whistleblower" system and to periodically advertise how and to whom wrongdoing must be reported.
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