BUUMBA CHIMBULU writes
MEASURES should be put in place to ensure effective, proactive and timely monitoring of businesses that have significant impact on the economy, says a Consultant, Wala Chabala.
Dr Chabala, also former Security Exchange Commission, Chief Executive Officer, said this therefore called for declaring some business undertakings as Public Interest Entities (PIEs) to have better oversight and scrutiny of the activities of these entities.
He said in an interview that the notion of public interest entities was not completely unfamiliar in the Zambian economy.
The Banking Sector, he said, was a good case in point and the businesses in this sector could to a large extent already be viewed as PIEs.
“They are required to not only meet and maintain certain capital adequacy levels, but they also need to file quarterly performance statements as well as publishing the same in the media.
“What is more, there is currently differentiation between foreign owned and locally owned institutions in terms of capital adequacy requirements,” Dr Chabala said.
He however indicated that different jurisdictions had different approaches to deeming entities as PIEs.
Dr Chabala explained that some used sectors, revenue size or quantum of number of employees as well as entities already listed on a public exchange.
He said the challenge with some of these criteria was that an entity could deliberately put measures in place to circumvent them, which thought was not farfetched if considered the thieving conduct of some of the foreign investor owned entities operating in the country.
“But it is important to underscore that there is a difference between a State-Owned Enterprise (SOE) and a PIE. The latter is an entity owned, usually wholly, by government while the latter is a private company which is however deemed to be of critical significance to the public. “Hence the need to deem such entities Public Interest Entities, and the requirement that they “report” to the public, including having share participation of the public in them.” He said.
Dr Chabala said in addition to having regulatory oversight for some entities, there would be need to put in place measures for transparency in the conduct of businesses by PIEs.
