adminconsideration and approval of financial statements, authorisation of programmes, review of the board composition, approval of remuneration policies, among other matters.
State Enterprises and Parastatals Minister Gorden Moyo said the AGMs were an integral component of corporate governance and should be a permanent feature on the State enterprises calendar.
“Out of a sample of 42 State Enterprises and parastatals which submitted their returns, 10 are required by law to hold AGMs. Only four were able to hold their AGMs, as provided for under the Companies Act,” said Minister Moyo.
“I am therefore emphasising (that) State enterprises and their subsidiaries should adhere to the provisions of the law in as far as holding AGM is concerned.”
Zimbabwe has 78 State enterprises with a capacity to contribute 40 percent to the gross domestic product, but most are underperforming.
Lack of poor corporate governance has reduced their creditworthiness and many have found it hard to access loans to recapitalise.
A number of them have for long operated without boards of directors while others have failed to publish financial accounts and reports.
The parastatals’ poor performance has resulted in poor service delivery, particularly in areas such as water, road, air transport and electricity.
Zimbabwe Leadership Forum chief executive Ms Tsitsi Mutasa said in an interview last week that the main reason for the parastatals’ non-compliance was that their boards were not being held accountable.
“The blame is on the Government which is not taking action,” she said. “The pillars of corporate governance are accountability and transparency and these cannot be achieved if companies do not hold AGMs.
“The shareholder (Government) needs to put in place systems in which directors will be held accountable for not holding statutory meetings.”
Minister Moyo said that best corporate governance practices required that the Government companies’ boards should always be properly constituted, appointed on time, and only competent, reliable people with the appropriate knowledge and experience are appointed.
In 2010, Government approved the restructuring of 10 State entities but so far there has been only little notable progress in Ziscosteel, now NewZim Steel, and the National Oil Company of Zimbabwe (Noczim), recently unbundled.
Government sold its 54 percent stake in Zisco to Indian firm Essar Global in a deal worth about US$750 million.
Minister Moyo blamed the slow progress on restructuring on huge debts and bureaucracy.
Online Reporter