11 Dec 2013

Minister of Finance and Development Planning, Mr Kenneth Matambo has called for the transition of the National Development Bank into a company under companies Act.

Presenting the National Development Bank (transition) Bill No.26 of 2013 in Parliament on Tuesday, December 10, Minister Matambo said that the Bill seeks to repeal the National Development Bank Act (cap .74;05, 1963) upon conversion of NDB into a company.

The intention, he said is to enable NDB, which was established under the NDB Act, to transit from being a statutory corporate into a company limited by shares under the Companies Act, and to continue to exist as if it has always been incorporated under the Companies Act. He said NDB would then use the name ‘National Development Bank Limited (NDBL)’ as its company name once it has been incorporated under the said Act.

Minister Matambo indicated that government would upon transition retain the controlling stake of 51 per cent of the NDB shares while 30 per cent would be offered to citizens only, 14 per cent to both citizens and non-citizens investors and five per cent of the shares would be allotted to citizen employees of NDB through the employees share ownership plan.

Furthermore, he said there are salient clauses of the Bill which include clause three which allows NDB to apply to the registrar of companies to be registered as a public company under the Companies Act. Clause five , he said also allows for the establishment of an Employee Shares Ownership Plan (ESOP) and reservation of a percentage of the shares of the company for citizen employees of the bank, for allotment to the ESOP.

He said clause six exempts from tax, any transaction done in order to give effect to the conversion of the NDB from a statutory corporation to a public company, and clause seven provides that, from the conversion date, the bank shall continue to undertake the business for which it was doing before conversion, until it was issued with a banking license by Bank of Botswana, so that it could start to provide commercial banking services.

Clauses nine to eleven, he said, deal with transitional provisions such as repealing of the NDB Act as well as maintaining certain acts or agreements entered into, before conversion date adding that the board of the bank shall serve as directors of the company unless the minister determines otherwise. ENDS