Eskom Conversion Act

Link to law: http://www.gov.za/documents/eskom-conversion-act
Published: 2001-08-03

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Eskom Conversion Act [No. 13 of 2001]
Government Gazette
REPUBLIC OF SOUTH AFRICA
Vol. 434 Cape Town 3 August 2001 No. 22545
THE PRESIDENCY
No. 721 3 August 2001
It is hereby notified that the President has assented to the following Act, which is hereby published for general information:–
No. 13 of 2001: Eskom Conversion Act, 2001

2 No. 22545 GOVERNMENT GAZETTE. 3 ALGUST 2001
Act No. 13, 2001 ESKOM CONVERSION ACT. 2001
(English text signed by the President.) (Assented to 30 J ~ l y 2001.)
ACT To provide for the conversion of Eskom into a public company having a share capital incorporated in terms of the Companies Act; and to provide for matters connected therewith.
B E IT ENACTED by the Parliament of the Republic of South Africa. as follows:- Definitions
1. In this Act, unless the context indicates otherwise- “Companies Act” means the Companies Act, 1973 (Act No. 61 of 1973); 5 “date of conversion” means the date determined in terms of section 3( I ) ; “Eskorn” means the juristic person referred to in section 2 of the Eskom Act and upon conversion means Eskom Holdings Limited; “Eskom Act” means the Eskom Act, 1987 (Act No. 40 of 1987); “Income Tax Act” means the Income Tax Act, 1962 (Act No. 58 of 1962); I O “Minister” means the Minister of Public Enterprises; “security” means any bill of exchange, promissory note or instrument issued by Eskom as security for any loan negotiated by it; “Shareholder compact” means the performance agreement to be entered into between Eskom and the government of the Republic of South Africa, including 15 annexures thereto. as amended from time to time.
Object of Act
2. The object of this Act is to convert Eskom into a public company having a share capital as contemplated in section 19( I)(a) of the Companies Act, with its entire share capital held by the State. 20
Conversion of Eskom
3. (1) Eskom is, with effect from a date determined by the Minister by notice in the Gccette. deemed to be a public company incorporated in terms of the Companies Act and is to be known as Eskom Holdings Limited from such date.
Companies Act do not apply to Eskom.
Effect of conversion
(2) The provisions of sections 32, 44( l) , 54(2), 59, 63(2), 64, 172 and 344(b) of the 25
4. ( 1 ) Subject to the provisions of this Act, the provisions of the Companies Act apply
( 2 ) For as long as the State is the sole or majority shareholder in Eskom, sections 60, 30
(3) The conversion of Eskom does not-
to Eskom with effect from the date of conversion.
66, 190 and 344(d) of the Companies Act do not apply to Eskom.
( a ) affect the continued corporate existence of Eskom as from the date of its first
ih) affect any of the rights, liabilities or obligations acquired or incurred by 35
(L,) affect the terms and conditions of service of its employees.
establishment;
Eskom, or on Eskom’s behalf, at any time before its conversion; and
GOVERNMENT GAZETIE, 3 AUGUST 2001 No. 22545 3
ESKOM CONVERSION ACT, 2001 Act No. 13,2001
Powers and duties of Eskom
5. In addition to the powers and duties of Eskom contained in the memorandum and
(a) may enter upon any land for the purpose of making plans and surveys thereof, but must give the owner at least seven days’ notice of such entry; 5
(b) must pay compensation for any damage caused by its officers or employees in the performance of their duties upon the land;
(c) may, irrespective of whether or not the owner of the land agrees, transfer to its subsidiary companies any servitude or other similar right in terms of which Eskom may effect improvements on or over such land, by way of a deed of 10 cession attested by a notary; and (i) the relevant registrar of deeds must make such entries or endorsements in
or on any relevant register, title deed or other document in the registrar’s office or submitted to the registrar as the registrar considers necessary to give effect to the provisions of this paragraph; 15
(ii) no fees or other levies are payable in respect of such entry or endorsement; and
(iii) the provisions of section 13 of the Electricity Act, 1987 (Act No. 41 of 1987), do not apply to a transfer referred to in this paragraph.
Memorandum and articles of association of Eskom 20
the articles of association and the Shareholder compact, Eskom-
6. (1) The Registrar of Companies, appointed in terms of section 7 of the Companies Act, must, on the date of conversion, register the memorandum and the articles of association of Eskom in terms of section 63(1) of the Companies Act, but no fee is payable in respect of such registration.
by the Minister.
comment and must table them before Parliament.
Limited. 30
of association, the Minister must take into account the following:
(2) The memorandum and the articles of association of Eskom must be as determined 25
(3) The Minister may publish such articles of association in the Gazette for public
(4) The Minister must enter into a Shareholder compact with Eskom Holdings
( 5 ) When entering into the Shareholder compact as well as in determining the articles
(a) The developmental role of Eskom Holdings Limited; and (b) the promotion of universal access to, and the provision of, affordable
electricity, taking into account the cost of electricity, financial sustainability 35 and the competitiveness of Eskom.
Borrowings secured by Eskom’s revenue and assets
7. (1) All borrowings effected by Eskom and any interest or other costs due or to become due in respect thereof must, unless otherwise agreed between Eskom and the lender, be a first charge against all revenues and assets of Eskom and on all moneys 40 recovered or to be recovered by it.
(2) (a) If any interest due in respect of any securities remains unpaid for three months after demand therefor in writing has been lodged with Eskom, the holder thereof may apply to a high court having jurisdiction for the appointment of a receiver of the revenues and assets referred to in subsection (1). 45
(i) make such order and give such directions as in the circumstances it may deem necessary for the raising and payment of the moneys due; and
(ii) in particular, order that any prices for electricity supplied or to be supplied be increased to meet the deficit, and for that purpose the receiver referred to in 50 paragraph (a) must exercise all such powers as Eskom might have exercised under the Eskom Act in respect of amending its prices for electricity, and the exercise of such powers does not require the sanction of any authority.
(3) If such default in payment of interest in whole or in part continues for a further period of three months, the holder of the securities may apply to a high court having 55 jurisdiction for a declaration that the outstanding principal sum for the time being has become due, and the court may make such declaration, together with any consequential order or declaration.
(4) In the event of default in payment of the principal sum of any security for one month after the date on which it is repayable, the provisions of subsections (2) and (3) 60 apply with the necessary changes.
(b) The court may-
1 No. 73545 GOVERNMENT GAZETTE, 3 AUGUST 200 I
.Act No. 13, ZOO1 ESKOkl CONVERSION ACT. 2001
Taxation of receipts and accruals of Eskom and subsidiaries
8. (1 ) The provisions of section IO( I ) (cAj of the Income Tax Act do not apply in respect of the receipts and accruals of-
(a i Eskom: and f h ) any association, corporation or company contemplated in paragraph (a) of the
definition of "company" in section I of the Income Tax Act, a majority of the shares of which are held by Eskom, if the operations of such association, corporation or company are ancillary or complementary to the objects of Eskom contained i n its Memorandum and Articles of Association referred to in section 6.
12) ( a ) The Minister of Finance must, after consultation with the Minister and the XIinister of Minerals and Energy, determine the tax values of the capital assets owned by Eskom and any company contemplated in subsection (l)(b) on 1 January 2000 for the purpose of calculating any wear and tear or depreciation allowance as contemplated in the Income Tax Act.
(6) The assets conternplated in paragraph (a) are, for the purposes of sections 1 1 ( e ) , 13C and I3 of the Income Tax Act. deemed to have been brought into use for the first time