The place of Ministerial statements and directives in the management of state owned enterprises

Abstract

In the governance of the affairs of the nation, Governments of the world pursue different economic policies with regards to sustaining the development of their respective countries. One such economic policy is establishment of SOEs. This paper has established that in Zambia SOEs are a feature of the post independence period and are incorporated under the Companies Act, Chapter 388 of the Laws of Zambia. As such the expectation is that they should run in accordance with the provisions of the Companies Act and the general principles of company law.However, the Government has in some instances issued various Ministerial statements and directives in the management of these SOEs. The purpose of this research is to ascertain the place of these Ministerial statements and directives in the management of SOEs. The first chapter introduces the concept of SOEs and briefly explains the historical background to the creation of SOEs bringing the problem into perspective. The next chapter highlights the issue of separate corporate personality in SOEs. It also addresses the issue of corporate governance in SOEs and argues that the interference by the State in the management of SOEs in the form of directives and statements is largely due to lack of good corporate governance in these enterprises. The Third Chapter explains the legal validity of these Ministerial statements and directives in the management of SOEs. In this regard, the case of Edgar Hamuwele and Another Ngenda Sipalo and Another is analysed to discuss the effects of a Ministerial statement purporting to dissolve a State Owned Company incorporated under the Companies Act. The last chapter sums up the findings of the place of Ministerial statements and directives in the management of SOEs. It goes further to outline some recommendations which can minimise the interference by the State in the management of parastatals. These include the incorporation of the OECD Guidelines on corporate governance in parastatals among others.In the governance of the affairs of the nation, Governments of the world pursue different economic policies with regards to sustaining the development of their respective countries. One such economic policy is establishment of SOEs. This paper has established that in Zambia SOEs are a feature of the post independence period and are incorporated under the Companies Act, Chapter 388 of the Laws of Zambia. As such the expectation is that they should run in accordance with the provisions of the Companies Act and the general principles of company law. However, the Government has in some instances issued various Ministerial statements and directives in the management of these SOEs. The purpose of this research is to ascertain the place of these Ministerial statements and directives in the management of SOEs. The first chapter introduces the concept of SOEs and briefly explains the historical background to the creation of SOEs bringing the problem into perspective. The next chapter highlights the issue of separate corporate personality in SOEs. It also addresses the issue of corporate governance in SOEs and argues that the interference by the State in the management of SOEs in the form of directives and statements is largely due to lack of good corporate governance in these enterprises. The Third Chapter explains the legal validity of these Ministerial statements and directives in the management of SOEs. In this regard, the case of Edgar Hamuwele and Another V. Ngenda Sipalo and Another is analysed to discuss the effects of a Ministerial statement purporting to dissolve a State Owned Company incorporated under the Companies Act. The last chapter sums up the findings of the place of Ministerial statements and directives in the management of SOEs. It goes further to outline some recommendations which can minimise the interference by the State in the management of parastatals. These include the incorporation of the OECD Guidelines on corporate governance in parastatals among others.