KwaZulu-Natal Ithala Development Finance Corporation Act, 2013

Jurisdiction
South Africa · KwaZulu-Natal
Citation
Act 5 of 2013
Date
13 February 2014
Language
English
Type
Legislation
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KwaZulu-Natal
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KwaZulu-Natal Ithala Development Finance Corporation Act, 2013

Act 5 of 2013

ACTTo provide for the continued existence of the KwaZulu-Natal Ithala Development Finance Corporation Limited, formerly known as KwaZulu Finance and Investment Corporation Limited, with the primary purpose of promoting, supporting and facilitating sustainable socio-economic development in the Province of KwaZulu-Natal, in accordance with the growth and development strategy of the Province; to determine the objectives, powers, duties and functions of the KwaZulu-Natal Ithala Development Finance Corporation Limited; to determine the manner in which the KwaZulu-Natal Ithala Development Finance Corporation Limited is to be managed, staffed and financed; and to provide for matters incidental thereto.(English text signed by the Premier)BE IT ENACTED by the Provincial Legislature of the Province of KwaZulu-Natal, as follows:-

Chapter 1
Definitions

1. Definitions

In this Act, unless the context indicates otherwise-“Banks Act” means the Banks Act, 1990 (Act No. 94 of 1990), and any word or expression to which a meaning has been assigned in the Banks Act or the Regulations relating to Banks, bears the meaning so assigned thereto;“Board” means the Board of the Corporation appointed in terms of section 6;“Chief Executive Officer” means the Chief Executive Officer of the Corporation, appointed in terms of section 17;“Companies Act” means the Companies Act, 2008 (Act No. 71 of 2008);“Company” means the Ithala State-owned Company Limited, a subsidiary of the Ithala Development Finance Corporation Limited, being a state-owned company incorporated in terms of the Companies Act, 2008 (Act No. 71 of 2008);"Constitution" means the Constitution of the Republic of South Africa, 1996 (Act 108 of 1996);“Corporation” means the Ithala Development Finance Corporation Limited referred to in section 2;“Department” means the department in the Provincial Government of KwaZulu-Natal responsible for Economic Development;“deposit” means adeposit as defined in section 1 of the Banks Act;“Executive Council” means the Executive Council of the Province of KwaZulu-Natal contemplated in section 132 of the Constitution;“Gazette” means the official Provincial Gazette of KwaZulu-Natal;“Head of Department” means the person appointed as Head of the Department in terms of section 12 of the Public Service Act, 1994 (Proclamation No. 103 of 1994);“indirect interest” includes, but is not limited to, a personal financial interest as defined in section 1 of the Companies Act, of a related or interrelated person as contemplated in section 2 of the Companies Act;“interest” includes, but is not limited to, a personal financial interest as defined in section 1 of the Companies Act;“liquid asset” means a liquid asset as defined in section 1 of the Banks Act;“member” means a member of the Board of the Corporation appointed in terms of section 6;“Member of the Executive Council for Finance” means the Member of the Executive Council of the Province of KwaZulu-Natal responsible for Finance;“member of the public” includes a juristic person;“National Treasury” means the National Treasury established by section 5 of the Public Finance Management Act, 1999 (Act No. 1 of 1999);“Portfolio Committee” means the Portfolio Committee of the Provincial Legislature responsible for Economic Development;“Premier” means the Premier of the Province of KwaZulu-Natal referred to in section 125(1) of the Constitution:“Province” means the Province of KwaZulu-Natal contemplated in section 103 of the Constitution, and “provincial” has a corresponding meaning;“Provincial Government” means the Provincial Government of the Province of KwaZulu-Natal and, unless the context indicates otherwise, includes every Department in the Provincial Government;“Provincial Legislature” means the Legislature of the Province of KwaZulu-Natal referred to in section 105 of the Constitution and having the legislative authority for the Province as contemplated in section 104(1) of the Constitution;“Public Finance Management Act” means the Public Finance Management Act, 1999 (Act No. 1 of 1999);“Registrar of Banks” means the Registrar of Banks designated under section 4 of the Banks Act;“regulations” means regulations made in terms of section 33;“regulations relating to Banks” means the regulations in terms of section 90 of the Banks Act;“responsible Member of the Executive Council” means the Member of the Executive Council of the Province of KwaZulu-Natal responsible for Economic Development;“shares” means shares in the company contemplated in chapter 7;“share capital” means funds raised by issuing shares in return for cash or other considerations; and“this Act” includes the regulations.

Chapter 2
Ithala Development Finance Corporation

2. Ithala Development Finance Corporation

(1)The KwaZulu Finance and Investment Corporation Limited, established by Proclamation R. 73 of 1978, and subsequently renamed by the KwaZulu-Natal Ithala Development Corporation Act, 1999 (Act No. 2 of 1999), as Ithala Development Finance Corporation Limited, continues to exist and is to be known as the Ithala Development Finance Corporation Limited.
(2)The Corporation, referred to in subsection (1), continues to be a juristic person.
(3)The Corporation is a provincial public entity subject to the Public Finance Management Act.
(4)Any reference in any other law or document to-
(a)the Black Investment Corporation of South Africa Limited;
(b)the Corporation for Economic Development and Tourism Limited;
(c)the KwaZulu Development Corporation Limited; or
(d)the KwaZulu Finance and Investment Corporation Limited, must be construed as a reference to the Ithala Development Finance Corporation Limited.

3. Objects and area of operation of Corporation

The objects of the Corporation are to promote, support and facilitate social and economic development in the Province by-
(a)mobilising financial resources and providing financial and related support services to persons domiciled, ordinarily resident or carrying on business, within the Province;
(b)planning, executing, financing and monitoring the implementation of development projects and programmes in the Province;
(c)promoting, assisting and encouraging the development of the human resources and social, economic, financial and physical infrastructure of the Province;
(d)promoting, encouraging and facilitating private sector investment in the Province and the participation of the private sector and community organisations in development projects and programmes and in contributing to economic growth and development generally; and
(e)acting as the agent of the Provincial Government for performing any development-related functions and responsibilities which, in the opinion of the Provincial Government, may be more efficiently or effectively performed by a corporate entity.

4. Powers, duties and functions of Corporation

In attaining the objects contemplated in section 3 and subject to sections 54(2), 66 and 68 of the Public Finance Management Act, 1999, the Corporation may-
(a)raise funds and other resources from the public and private sectors by securing loans, soliciting and receiving grants and donations on such conditions as may be agreed upon and subject to any conditions that may be determined or prescribed by the responsible Member of the Executive Council;
(b)plan, facilitate, promote, carry out, finance, invest in, or underwrite any project, programme or enterprise aimed at furthering the social or economic development and tourism of the Province;
(c)furnish technical and other advice, training, information, guidance and generally offer such support and assistance as may be required for any project, programme, or enterprise contemplated in paragraph (b);
(d)through the Company, lend or advance money, with or without security, on such conditions as it deems fit, take such security as it deems fit in connection therewith, including-
(i)mortgage bonds;
(ii)notarial bonds;
(iii)pledges;
(iv)cessions;
(v)liens;
(vi)hypothecs;
(vii)guarantees;
(viii)deeds of suretyship; or
(ix)any other form of cover or security,
and take such steps as it deems necessary for the recovery of any debt and the protection and enforcement of any right in connection therewith;
(e)guarantee, underwrite, or stand surety for the debts or contractual obligations of any person, indemnify any person against any loss, damage and costs arising from the debts or other obligations of any other person and, for that purpose, enter into security bonds or furnish any other required form of security;
(f)acquire, hold, develop, improve, manage, deal with, hire, let, sell, transfer, donate, cede, hypothecate, or otherwise encumber or alienate movable or immovable property, whether corporeal or incorporeal;
(g)establish juristic persons or associations of persons capable of carrying out any object, power, function, or duty that the Corporation may carry out in terms of this Act, acquire an interest in any such juristic person and alienate any such interest, or subscribe to membership of any such association and terminate such membership;
(h)hold shares in the Company contemplated in Chapter 7;
(i)act as director, trustee, administrator, manager, executor, judicial manager, liquidator, agent or representative of any person, public body, estate or business and designate any representative to act for such purpose;
(j)charge and accept remuneration for any service rendered to, or on behalf of, any person, including the Provincial Government;
(k)pay all expenses in connection with its administration, open, operate and close banking accounts, overdraw such accounts, make, draw, accept, or endorse negotiable instruments, invest funds not immediately required for its affairs;
(l)create reserve funds, take all such steps as it considers necessary for the protection and preservation of its -
(i)investments; or
(ii)financial interests,
and generally do all things necessary for the management and administration of its financial affairs; and
(m)pay all expenses in connection with the protection, preservation and maintenance of its rights and assets;
(n)take all steps it considers necessary for-
(i)the recovery of any liability; or
(ii)the enforcement of any obligation owing to it by any person,
including the institution of such legal proceedings as it considers necessary; and
(o)employ, suspend, discharge, remunerate, train and house the staff members of the Corporation;
(p)provide the staff members of the Corporation with pension benefits, sick leave benefits, or other benefits of employment and generally do all things necessary to develop and maintain an adequate staff complement within the Corporation;
(q)have an official seal and use such seal for any purpose in the Province;
(r)generally, do all things necessary for-
(i)the attainment of its objects;
(ii)the exercise of its powers; or
(iii)the management and administration of its affairs; and
(s)do any other thing or attend to any other matter that the responsible Member of the Executive Council considers necessary for the proper implementation of this Act; and
(t)authorise the Company to accept, hold and invest deposits offered by any person, on such conditions as the Minister of Finance or the Registrar of Banks may determine.

5. Shares, share capital and shareholding

(1)At the date of commencement of this Act, the authorised share capital of the Corporation is its issued share capital as held by the Corporation in the Company.
(2)Subject to such conditions as the responsible Member of the Executive Council may prescribe, the Corporation may transfer all or part of the issued shares to any-
(a)juristic person;
(b)association of persons; or
(c)public or private sector body, whose objects are not inconsistent with those of the Corporation: Provided that individual natural persons may not become shareholders of the Corporation.
(3)The Board, with the approval of-
(a)the responsible Member of the Executive Council; and
(b)where shares have been transferred to shareholders as contemplated in subsection (2), the shareholders voting in general meeting, may, from time to time-
(a)increase the share capital of the Corporation, to the extent the Board considers expedient, by the creation of-
(i)ordinary or preference shares; or
(ii)shares of any other type or class it may decide upon, and issue such shares on agreed terms; and
(b)change-
(i)the authorisation and classification of shares;
(ii)the numbers of authorised shares of each class; and
(iii)the preferences, rights, limitations and other terms associated with each class of shares.
(4)Any share in the Company may be issued with such preferred, deferred or other special rights, or subject to such restrictions as the Board may decide, whether in regard to dividends, voting, return of share capital, or otherwise.
(5)In the case of preference shares, the Board may decide-
(a)that the shareholders are not entitled to vote; or
(b)that such shares may be redeemed.
(6)Each issued share, regardless of its class, has associated with it one general voting right.
(7)Despite anything to the contrary in this Act, every share issued has associated with it an irrevocable right of the shareholder to vote on any proposal to amend the preferences, rights, limitations and other terms associated with that share.

Chapter 3
Board of Corporation

6. Composition of Board

(1)The Board consists of-
(a)at least seven, but not more than thirteen, members appointed by the responsible Member of the Executive Council; and
(b)the Chief Executive Officer, ex officio, as contemplated in section 17(5).
(2)Members of the Board must be fit and proper persons to serve the best interests of the Province, collectively possessing -
(a)appropriate knowledge or experience in organised constituencies within the business industry; and
(b)the following skills, expertise and qualifications-
(i)legal skills, experience and qualifications;
(ii)financial skills, experience and qualifications;
(iii)investment experience or qualifications;
(iv)marketing experience or qualifications;
(v)human resource or labour experience or qualifications; and
(vi)planning or development skills and experience.
(3)In appointing members to the Board, the responsible Member of the Executive Council must ensure that-
(a)historic imbalances are addressed;
(b)the Board, collectively, possesses the necessary and appropriate skills and expertise;
(c)the Board is representative of persons employed or involved in the import, trade and investment business enterprises in the Province; and
(d)municipal interests are represented on the Board in such a manner that equitable spatial representation of municipalities is achieved: Provided that no more than four persons may be appointed to the Board to give effect to the provisions of this subsection.
(4)The responsible Member of the Executive Council must designate-
(a)one of the members of the Board as the Chairperson of the Board; and
(b)one of the members of the Board as the Deputy Chairperson of the Board.
(5)The responsible Member of the Executive Council must, by notice in the Gazette, invite any interested parties within the Province to nominate candidates for appointment to the Board.
(6)The invitation for nomination must specify-
(a)the nomination procedure;
(b)the requirements for nomination; and
(c)the closing date for the nomination.
(7)The responsible Member of the Executive Council must appoint a nomination committee to make recommendations to the Responsible Member of the Executive Council for the members of the Board.
(8)The responsible Member of the Executive Council must cause the names of the persons appointed to the Board to be published in the Gazette and in at least two newspapers, immediately after such persons have been notified, in writing, of their appointment to the Board.
(9)The responsible Member of the Executive Council must, within two months after the appointment of members of the Board in terms of subsection (1), inform the Executive Council and the Portfolio Committee of the names of the appointed members, including the term of their appointment.
(10)This section applies, with the necessary changes, to the filling of a vacancy on the Board.

7. Disqualification from being appointed to Board

(1)A person is disqualified from being appointed to the Board or from remaining on the Board, by reason that he or she-
(a)is a member of Parliament, any provincial legislature or any municipal council;
(b)is or becomes an unrehabilitated insolvent;
(c)is or has been declared by a competent court to be of unsound mind;
(d)is directly or indirectly involved in any contract with the Corporation and fails to declare his or her involvement in such a contract and the nature thereof in the manner required by this Act;
(e)is a person under curatorship;
(f)has, at any time, been removed from an office of trust on account of misconduct involving theft or fraud;
(g)has been convicted and sentenced to a term of imprisonment without the option of a fine, except that the responsible Member of the Executive Council may, upon receipt of an affidavit disclosing full details of an offence by a person nominated for appointment, condone a conviction in a manner that is consistent with section 106(1)(e) of the Constitution: Provided that a disqualification in terms of this subsection ends five years after the sentence has been completed; and
(h)fails to disclose an interest contemplated in paragraph (d), or attended or participated in the proceedings of the Board while having an interest contemplated in the said paragraph.
(2)A person who is subjected to a disqualification contemplated in subsection (1)(a), (1)(b) or (1)(g) may be nominated for appointment as a member but may only be appointed, if at the time of such appointment, he or she is no longer subjected to that disqualification.

8. Declaration of financial or other interests of members of Board

(1)A person who has been nominated to serve on the Board in terms of section 6(5) must, within ten days of being nominated, submit a written declaration to the responsible Member of the Executive Council of all direct or indirect interests in any company or other business interests.
(2)Any failure by the nominee to disclose financial and other interests in terms of subsection (1) disqualifies such nominee in terms of section 7(1)(h) to be considered for the position of the member of the Board.
(3)Every member of the Board must, upon assuming office and at the beginning of every financial year of the Corporation, submit a written declaration to the responsible Member of the Executive Council of his or her direct or indirect interest in any company or other business.
(4)Where a member acquires an interest in any company or any other business interest, at any time during his or her tenure as a member of the Board, he or she must, within ten days of the date of the acquisition of such an interest, submit a written declaration to the responsible Member of the Executive Council of such an interest.
(5)Any failure on the part of the member to disclose his or her interest, as contemplated in subsections (3) and (4), constitutes a justifiable reason for the termination of appointment of such member in terms of section 10(2).
(6)The responsible Member of the Executive Council must keep an updated register of the interests of members of the Board disclosed in terms of this section.

9. Term of office and reappointment of member of Board

The persons appointed to the Board hold office for a term of three years, or such shorter period as the responsible Member of the Executive Council may determine, and are, subject to section 6, eligible for re-appointment at the expiry of such term: Provided that no person may be re-appointed after having served on the Board for three consecutive terms.

10. Vacancies, removal and resignation from office of members of Board

(1)A member ceases to be a member immediately upon becoming disqualified in terms of section 7.
(2)The responsible Member of the Executive Council may, after having afforded a member the opportunity to state his or her case, at any time terminate the term of office of such member if, in his or her opinion, there are justifiable and cogent reasons for doing so.
(3)A member must vacate office if he or she is absent, without a leave of absence having first been granted by the Board, from two consecutive meetings of the Board for which reasonable notice was given to that member in person or by post.
(4)A member may resign from office in writing by giving not less than 30 days’ notice to the responsible Member of the Executive Council: Provided that the responsible Member of the Executive Council may waive the resignation notice.
(5)Whenever a vacancy occurs on the Board and, other than a vacancy arising by virtue of the responsible Member of the Executive Council exercising his or her powers in terms of subsection (2), the responsible Member of the Executive Council must, subject to section 6, appoint a person to fill such vacancy for the unexpired portion of the period of office of the member in whose place such person is appointed.
(6)In the event that the responsible Member of the Executive Council exercises his or her powers in terms of subsection (2), he or she may, notwithstanding the procedure for the appointment of the members of the Board set out in section 6, but subject to sections 6(2) and 6(3), appoint persons to serve as members of the Board on an interim basis: Provided that -
(a)the persons appointed in terms of this subsection may not remain on the Board for a period of more than 60 days from the date of their appointment; and
(b)the responsible Member of the Executive Council must, within 60 days of the appointment contemplated in this subsection and subject to section 6, appoint the members of the Board for a term as contemplated in section 9.

11. Temporary suspension of member of Board

The responsible Member of the Executive Council may suspend a member of the Board whilst the responsible Member of the Executive Council is investigating allegations which, if found to be correct, could result in the appointment of the member being terminated in terms of section 10(2).

12. Meetings and procedures at meetings of Board

(1)Any meeting of the Board must be held at a venue, on a date and at a time determined by the chairperson of the Board.
(2)The quorum for a meeting of the Board is the majority of the members.
(3)The proceedings at a meeting of the Board must, subject to the provisions of this section, be determined by the chairperson of the Board.
(4)The chairperson of the Board must preside at all meetings of the Board: Provided that in his or her absence the deputy chairperson of the Board must preside and, in the event that neither the chairperson nor the deputy chairperson is present at a meeting of the Board, the members then present may elect, from their own number, a person to act as the chairperson of the Board for the duration of that particular meeting.
(5)A decision of the Board must be taken by a majority of the votes of the members present at a meeting and, in the event of an equality of votes on any matter, the chairperson of the Board has a casting vote in addition to his or her deliberative vote.
(6)The Board must keep minutes of its meetings.
(7)No decision of the Board is invalid merely by reason of a vacancy on the Board: Provided that the decision is taken by the required majority of the members of the Board then present and entitled to sit as members.
(8)A majority of the Board may call an extraordinary meeting of the Board.
(9)The Board may, in its discretion, allow members of the public to attend any meeting of the Board.

13. Recusal of member from meetings and proceedings of Board

(1)A member of the Board must recuse himself or herself from a matter being investigated, considered or voted upon by the Board if one or more of the following prevail-
(a)if he or she has a direct or indirect interest; or
(b)if there is a possibility that a direct or indirect interest might arise.
(2)
(a)If, at any stage during the course of any proceedings before the Board, it appears that a member who is present at that meeting has, or may have, an interest contemplated in subsection (1), such a member must forthwith disclose the nature of his or her interest and leave the meeting.
(b)The member contemplated in subsection (2)(a) may not participate in any voting connected with a matter in which he or she has or may have an interest contemplated in subsection (1).
(3)Any disclosure made in terms of subsection (1) must be recorded in the minutes of the meeting in question.
(4)Where it emerges that the Board took a decision on a matter in respect of which a member has an undisclosed interest and voted, such decision is voidable.
(5)The decision contemplated in subsection (4) may-
(a)subject to approval by the responsible Member of the Executive Council, be ratified by a resolution of the Board following disclosure of such interest; or
(b)be declared to be valid by a court of law.

14. Remuneration of members of Board

(1)
(a)A member of the Board may be paid from the funds of the Corporation such remuneration and allowances as may be determined by the responsible Member of the Executive Council in consultation with the Member of the Executive Council for Finance.
(b)A member of the Board, who receives remuneration, allowances or other benefits by virtue of his or her post or employment in-
(i)the National Government;
(ii)a provincial government;
(iii)a municipality; or
(iv)a corporation, body or institution in which the National or a provincial government has a controlling interest,
and who continues to receive such remuneration, allowances or other benefits while serving as a member of the Board, may only receive remuneration and allowances referred to in subsection (1)(a) to the extent required to place such member in the financial position in which he or she would have been were it not for such post or employment.
(2)
(a)A member of the Board may, in respect of his or her functions as a member or co-opted member, receive reimbursement from the funds of the Corporation for reasonable actual subsistence and travelling expenses necessitated by the actual attendance of a meeting of the Board.
(b)The Member of the Executive Council for Finance must determine procedures, including control measures, for the management, handling and processing of claims for subsistence and travelling expenses contemplated in subsection (2)(a).

15. Establishment of committees to assist Board

(1)The Board may establish committees consisting of one or more of its members to-
(a)assist the Board in the performance of any of the powers, duties or functions of the Corporation contemplated in section 4; or
(b)enquire or conduct research into any matter falling within the mandate of the Board in terms of this Act.
(2)The Board must establish-
(a)an audit committee, in accordance with the provisions of the Public Finance Management Act; and
(b)a remuneration committee, which is responsible for-
(i)making recommendations regarding remuneration allowances and other benefits of the persons contemplated in section 25(2)(a); and
(ii)determining procedures, including control measures for the management, handling and processing of claims for subsistence and travelling expenses.
(3)When establishing a committee contemplated in subsection (1), the Board must-
(a)determine the terms of reference of such committee including, but not limited to, whether or not such committee ceases to exist once it has completed the task or tasks allocated to it by the Board;
(b)appoint a chairperson of such committee who must be a member of the Board; and
(c)determine whether or not such committee may co-opt persons who are not members of the Board and, if so, on what terms and conditions.
(4)The Board may, at any time, terminate the existence of a committee or any mandate given to a committee, irrespective of whether or not such committee has completed the task or tasks allocated to it by the Board.
(5)
(a)The Chief Executive Officer may attend and take part in, but may not vote, at a meeting of a committee contemplated in subsections (1) and (2).
(b)A staff member of the Corporation may, by invitation from the relevant committee, attend a meeting of that committee, but may not vote.

16. Co-opting of persons to Board or committees of Board

(1)The Board may, if it is of the opinion that a particular person is able to assist it in regard to any of its functions and powers, co-opt such person for that purpose.
(2)A person co-opted in terms of subsection (1) is not entitled to vote at any meeting of the Board or a committee of the Board.
(3)A person co-opted in terms of subsection (1) may be paid such remuneration and allowances from the funds of the Corporation as may be determined by the Board, in consultation with the Member of the Executive Council for Finance.

Chapter 4
Chief Executive Officer and staff of Corporation

17. Chief Executive Officer of Corporation

(1)The Board must, in consultation with the responsible Member of the Executive Council, appoint the Chief Executive Officer of the Corporation.
(2)
(a)The Chief Executive Officer is appointed for a period not exceeding five years.
(b)The Chief Executive Officer may be re-appointed for one additional term of office not exceeding five years.
(3)
(a)The appointment of the Chief Executive Officer is subject to the conclusion of a written performance agreement entered into between that person and the Corporation.
(b)The Corporation and the Chief Executive Officer may, in writing and by agreement, amend the performance agreement contemplated in subsection (3)(a).
(4)For purposes of the declaration of financial or other interests, the provisions of section 8 apply, with the necessary changes, to the Chief Executive Officer, except that the Chief Executive Officer must declare his or her interests to the Board.
(5)The Chief Executive Officer is an ex officio member of the Board but does not have the right to vote at its meetings.

18. Functions of Chief Executive Officer

(1)The Chief Executive Officer is responsible for-
(a)the administrative and financial management of the Corporation in accordance with the Public Finance Management Act, under the direction of the Board;
(b)the appointment of members of staff of the Corporation contemplated in section 20(1), after consultation with the Board;
(c)the determination of a code of conduct applicable to the Chief Executive Officer and all members of staff of the Corporation, with the approval of the Board, to ensure-
(i)compliance with applicable law, including this Act;
(ii)the effective, efficient and economical use of the funds of the Corporation and resources;
(iii)the promotion and maintenance of a high standard of professional ethics;
(iv)the prevention of conflicts of interest;
(v)the protection of confidential information held by the Corporation; and
(vi)professional, honest, impartial, fair, ethical and equitable service; and
(d)the maintenance of discipline of the members of staff of the Corporation appointed in terms of subsection (1)(b);
(e)the keeping and maintenance of the register of interests declared by members of staff of the Corporation; and
(f)ensuring compliance with the provisions of the Public Finance Management Act, and any other applicable legislation by the Board.
(2)If the Chief Executive Officer is, for any reason, unable to perform any of his or her functions, the Board must, in consultation with the responsible Member of the Executive Council, appoint any suitable candidate from the staff members of the Corporation as Acting Chief Executive Officer until the Chief Executive Officer is able to resume his or her functions.

19. Resignation and removal from office of Chief Executive Officer

(1)The Chief Executive Officer vacates office-
(a)in the case of resignation, when the resignation takes effect;
(b)when he or she becomes disqualified in terms of section 7; and
(c)upon having been removed from office in terms of subsection (2).
(2)The Board may, in consultation with the responsible Member of the Executive Council, terminate the employment of the Chief Executive Officer in accordance with applicable employment and labour law.

20. Staff of Corporation

(1)The Chief Executive Officer must, subject to section 18(1)(b) and subsection (2), employ members of staff of the Corporation as may be reasonably necessary-
(a)to assist him or her in fulfilling his or her functions in terms of this Act; and
(b)to assist the Board with work incidental to the performance of its functions.
(2)The Board must, subject to section 25(4), determine a human resources policy for members of staff of the Corporation, including the Chief Executive Officer.
(3)For purposes of the declaration of financial or other interests, and subject to section 18(1)(e), the provisions of section 8(3), (4) and (5) apply, with the necessary changes, to members of staff of the Corporation.
(4)The Chief Executive Officer must keep an updated register of the interests of members of staff of the Corporation disclosed in terms of subsection (3).

21. Secondment or transfer of staff to Corporation

The Corporation may utilise the services of persons seconded or transferred from the public service in accordance with the provisions of the Public Service Act, 1994 (Proclamation No. 103 of 1994).

Chapter 5
Policy directives and corporate plan

22. Policy directives to Board

(1)The Responsible Member of the Executive Council, after consultation with the Board and the Portfolio Committee, and in consultation with the Premier in Executive Council, may set strategic guidelines for the pursuit of the Corporation’s objects by issuing policy directives to the Board.
(2)The responsible Member of the Executive Council may, similarly, withdraw or amend any policy directive contemplated in subsection (1).
(3)The responsible Member of the Executive Council may not issue any policy directive inconsistent with the provisions of this Act or any other law binding on the Corporation.
(4)A policy directive contemplated in subsection (1) must be-
(a)in writing;
(b)signed by the Member of the Executive Council; and
(c)addressed to the Chairperson of the Board.
(5)The Board must ensure-
(a)that a record is kept of all current policy directives; and
(b)that members of the public have the right of access to this record.
(6)The Board must report to the responsible Member of the Executive Council on the extent of its compliance or non-compliance with all existing policy directives in its annual report.

23. Corporate plan of Corporation

The Board must ensure that a corporate plan is developed and implemented in accordance with the provisions of the Public Finance Management Act.

24. Prohibitions and restrictions on distribution of Corporation’s profits

The Member of the Executive Council may, by notice in the Gazette, impose such prohibitions and restrictions on-
(a)the distribution of the profits of the Corporation; and
(b)the disposal of the major assets of the Corporation, as he or she considers necessary for the good governance of the Corporation.

Chapter 6
Funding and financial management of Corporation

25. Funds of Corporation

(1)The funds of the Corporation consist of-
(a)money appropriated by the Provincial Legislature;
(b)interest on investments of the Corporation; and
(c)income lawfully derived from any other source.
(2)The Corporation must utilise its funds-
(a)for the payment of remuneration, allowances and subsistence and travelling expenses of-
(i)the members;
(ii)the co-opted members of the Board or the members of the committees of the Board;
(iii)the Chief Executive Officer; and
(iv)the members of staff of the Corporation; and
(b)to cover costs in connection with-
(i)the day to day operation and administration of the Corporation; and
(ii)the performance of the duties and functions of the Corporation and the exercise of its powers in terms of this Act.
(3)The Chief Executive Officer must, with the concurrence of the Board-
(a)open an account in the name of the Corporation with a company or an institution registered as a bank in terms of the Banks Act; and
(b)deposit therein all moneys received in terms of subsection (1).
(4)The Board, after consultation with the responsible Member of the Executive Council, must determine-
(a)the remuneration and conditions of service; and
(b)the pension and retirement benefits, of the Chief Executive Officer and all members of staff of the Corporation.
(5)The Corporation may invest moneys deposited into its account which are not required for immediate use: Provided that the Board must take reasonable steps to ensure that the investment is not of a speculative nature.

26. Financial management

(1)The Chief Executive Officer must cause full and proper books of account of the Corporation and all the necessary records of the Corporation in relation thereto to be kept.
(2)The Chief Executive Officer must ensure that the annual budgets, corporate plans, annual reports and audited financial statements of the Corporation are prepared and submitted in accordance with the Public Finance Management Act.
(3)The Chief Executive Officer must, within three months before the end of each financial year, submit to the Board for approval-
(a)a business plan for the Corporation: containing measurable objectives and the other information contemplated in section 27(3)(b) and (c); and
(b)a statement of the estimated income and expenditure of the Corporation, in respect of the following three financial years.
(4)In any financial year the Chief Executive Officer may submit to the Board, for approval, adjusted or supplementary statements of the estimated income and expenditure of the Corporation for that financial year.
(5)The Corporation may not enter into any financial commitment beyond its approved budget and its accumulated reserves.
(6)The Chief Executive Officer may-
(a)with the approval of the Board, invest any unexpended portion of the Corporation funds with the Corporation for Public Deposits or any other institution categorised or listed from time to time by the National Treasury as a Category “A1” financial institution; or
(b)with the approval of the Board, dispose of that portion in any other manner.
(7)The Chief Executive Officer may, with the approval of the Board, establish reserve funds and deposit therein such amounts as the Board approves.

27. Audit and annual report

(1)The Auditor-General must audit the financial statements of the Corporation.
(2)
(a)The Board must table a report on the activities of the Corporation during a financial year in the Provincial Legislature within five months after the end of that financial year.
(b)Within five months after the report has been tabled, a delegation consisting of the chairperson of the Board and at least two other members of the Board must brief the Portfolio Committee on the annual report.
(3)The report must-
(a)include a balance sheet and a statement of income and expenditure certified by the Auditor-General;
(b)state the extent to which the Corporation has achieved or advanced its objects referred to in section 3 and the measurable objectives as set out in its business plan, as contemplated in section 26(3)(a), during the financial year concerned; and
(c)contain relevant performance information regarding the economic, efficient and effective application of resources and specifically a comparison between planned and actual performance indicators as set out in that business plan.

28. Establishment and administration of special funds

(1)The Corporation may, in consultation with the responsible Member of the Executive Council, establish and maintain special funds, including a fund for the bringing into the mainstream of investment the previously disadvantaged groups.
(2)The Corporation must administer such funds in the manner determined by the responsible Member of the Executive Council.

Chapter 7
Ithala State-owned Company Limited

29. Ithala State-owned Company Limited

At the commencement of this Act, the Corporation is the sole shareholder of the Company.

30. Powers of Company

(1)The Company has all the powers and capacity of a juristic person, except to the extent that the Banks Act, the Companies Act, or its Memorandum of Incorporation provides otherwise.
(2)Notwithstanding anything to the contrary contained in this Act, the Company has the power to accept, hold and invest deposits offered by any person on such conditions as the Minister of Finance or the Registrar of Banks may determine in terms of the Banks Act.

31. Compliance with requirements of Banks Act

For as long as the Company accepts deposits from the public, it must comply with any requirement or condition imposed by the Minister of Finance or the Registrar of Banks in terms of the Banks Act.

32. Winding-up of Company

(1)Where the Company operates as contemplated in section 31, the relevant provisions of the Banks Act apply in respect of the winding-up or deregistration of the Company.
(2)Subject to subsection (1), the Company may be wound up or deregistered in terms the Companies Act.
(3)On the date of the winding-up of the Company contemplated in subsection (2), all assets, liabilities, rights, duties and obligations, including any unspent portion of any funds accrued or received by the Company are transferred to, and vest in, the Corporation established in terms of section 3.
(4)Notwithstanding the disestablishment of the Corporation, the Company continues to exist as a separate legal entity registered in terms of the Companies Act.
(5)The winding up of any juristic person that is a shareholder in the Company does not affect the status of the Company.

Chapter 8
General provisions

33. Security of confidential information held by Corporation

(1)Subject to the Constitution and the Promotion of Access to Information Act, 2000 (Act No. 2 of 2000), no person may disclose any information submitted to the Corporation, unless-
(a)he or she is ordered to do so by a court of law; or
(b)the person who submitted such information consents thereto in writing.
(2)No person may disclose any information kept in the registers contemplated in sections 8(6) and 20(4), unless such disclosure is-
(a)in terms of any law that compels or authorises such disclosure;
(b)materially necessary for the proper functioning of the Corporation; or
(c)made for purposes of monitoring, evaluating, investigating or considering any activity relating to the Corporation, or any member of staff of the Corporation.
(3)No person may disclose or use, for personal gain or otherwise, any information of a confidential nature relating to the business of the Corporation, without the prior consent of the Corporation.

34. Dissolution of Corporation

The Corporation may not be wound-up except in terms of an Act of the Provincial Legislature.

35. Use of name of Corporation

(1)No person may, without the prior written authorisation of the Corporation, in any way represent or make use of the name, acronym, logos, designs or material used or owned by the Corporation.
(2)No person may falsely claim to be acting on behalf of the Corporation.

36. Delegations

(1)The responsible Member of the Executive Council may delegate to the Head of Department-
(a)any power conferred on the responsible Member of the Executive by this Act, except the power to make regulations in terms section 37; or
(b)any duty imposed on the responsible Member of the Executive Council by this Act, except any duty regarding the appointment, and termination of office, of the members contemplated in sections 6(3) and 10(2).
(2)The Chief Executive Officer may delegate to any member of staff of the Corporation any power or duty conferred or imposed on the Chief Executive Officer by this Act, except any duty as an ex officio member of the Board or accounting officer of the Corporation.
(3)Any power or duty delegated in terms of subsection (1) or (2) must be exercised or performed subject to such conditions as the person that made the delegation considers necessary.
(4)Any delegation referred to in subsection (1) or (2)-
(a)must be in writing;
(b)does not prohibit the person that made the delegation from exercising that power or performing that duty; and
(c)may, at any time, be withdrawn or amended, in writing, by that person.

37. Regulations

(1)The responsible Member of the Executive Council may, after consultation with the Board, the Portfolio Committee and any shareholders, who either solely or jointly hold twenty-five percent or more of the shares in the Company, make regulations regarding-
(a)the circumstances under which and conditions upon which the Corporation may borrow funds;
(b)the circumstances under which and conditions upon which the Corporation may dispose of any major assets;
(c)the circumstances under which and conditions upon which the Corporation may distribute any surplus funds;
(d)the voting rights of shareholders in the Company; or
(e)the holding of, and procedure at, meetings of shareholders and the taking of decisions by shareholders without holding a meeting.
(2)In addition to matters contemplated in subregulation (1), the responsible Member of the Executive Council may regulate on-
(a)the keeping of registers and records by the Board and right of the public to access any such register or record;
(b)the form and contents of the annual report of the Corporation;
(c)the location of the public office of the Corporation;
(d)the giving and receiving of notices by the Corporation;
(e)any other matter that the responsible Member of the Executive Council considers necessary for the proper implementation or the administration of this Act; or
(f)any administrative or procedural matter necessary to give effect to the provisions of this Act.
(3)Any regulation with financial implications must be made in consultation with the Member of the Executive Council responsible for Finance.

38. General offences

(1)Any member who wilfully or in a grossly negligent manner fails to comply with section 8(3), (4) or 13(2), or any former member who failed to comply with, or contravened, any of the sections contemplated in this subsection, while being a member, is guilty of an offence.
(2)Any person who wilfully or in a grossly negligent manner fails to comply with section 20(3) is guilty of an offence.
(3)Any person who wilfully or in a grossly negligent manner contravenes section 35 is guilty of an offence.
(4)Any person who wilfully or in a grossly negligent manner contravenes section 26(1), (2) and (3), is guilty of an offence.
(5)A person is guilty of an offence if he or she directly or indirectly accepts any bribe or corruptly receives any fee or reward from any person in connection with anything done or offered by the Corporation.
(6)A person is guilty of an offence if he or she, in respect of, or in connection with, anything done or offered by the Corporation, bribes or attempts to bribe or corruptly influence or attempts to corruptly influence any person employed by, or acting on behalf of, the Corporation.
(7)Any person who wilfully or in a grossly negligent way falsely claims that he or she is authorised to charge or collect fees, donations or contributions on behalf of, or by direction of, the Corporation, is guilty of an offence.

39. Penalties

Any person convicted of an offence in terms of this Act is liable to a fine or to imprisonment for a period not exceeding five years or to both such fine and imprisonment.

40. Repeal of law

The KwaZulu-Natal Ithala Development Corporation Act, 1999 (Act No. 2 of 1999), is hereby repealed.

41. Transitional arrangements and savings

Any act purported to have been done or performed in terms of a law repealed by this Act by the responsible Member of the Executive Council, the Corporation, a member or any employee of the Corporation before the commencement of this Act, and which may be done or performed in terms of this Act, must be regarded as having been done or performed in accordance with this Act.

42. Short title

This Act is called the KwaZulu-Natal Ithala Development Finance Corporation Act, 2013, and comes into operation on a date to be determined by the responsible Member of the Executive Council by notice in the Gazette.
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History of this document

22 September 2016
13 February 2014 this version
23 January 2014
Assented to