The committee was briefed by the Companies and Intellectual Properties Commission (CIPC) and the National Credit Regulator (NCR) on their contribution to the government’s Covid-19 response. The CIPC was mandated by the government to develop a system for essential service applications by companies a day after President Cyril Ramaphosa announced the ongoing nationwide lockdown. 

To date, approximately 440,000 companies have applied and received their essential service certificates for levels 5 and 4 of the lockdown. 

The committee also heard that the system developed by the CIPC does not accept any other form of business, including a sole proprietor, trading trust, industry body and partnership. The CIPC’s legal mandate only extends to companies in terms of the law, as there is no way to cross-reference information for the above-mentioned entities. 

The Department of Small Business Development and municipalities were advised to handle other business types.

Around 1,300 certificates have been revoked, and Parliament said this situation continues as more information becomes available. 

Regarding reckless trading, the committee noted that in terms of the practice note issued on March 24, and for the duration of the Covid-19 national disaster, the CIPC will not invoke the reckless-trading provisions, provided it has reason to believe that the companies are temporarily insolvent due to the national disaster. 

The NCR told the meeting that it had issued circulars on extension of business for credit providers, debt counsellors and credit bureaus with regard to the submission of statutory reports and other functions to be performed by debt counsellors. A proposal was also made to the Department of Trade, Industry and Competition for a waiver and extension of renewal of registration fees for registrants. 

Regarding the compliance on monitoring post the lockdown, the committee heard this will include credit agreements entered into with consumers, to intensify compliance monitoring through inspections, complaints assessments and treatment of credit information as a result of the relief provided through Covid-19 measures. 

It will further conduct raids in smaller towns, townships and rural areas for illegal collection methods, such as the retention of bank cards, Sassa cards and ID books, and analyse the performance of loan books of credit providers to monitor the impact of Covid-19 on consumers. 

A focus will also be on debt collection practices, for example repossessions, because those are prohibited at this stage. 

Committee chairperson, Duma Nkosi, said this does not mean that those who are able to service loans should not be doing so. 

“Loans are still payable by those who are in a position to do so. We will continue to monitor the commitments and engage with entities to ensure they remain on track,” said Nkosi.

African News Agency