Jordan Times
Thursday, August 26, 1999
Finance committee recommends rejection of
Companies Law amendments
By Dima Hamdan
AMMAN — The Upper House of Parliament's Economic and Finance Committee on Tuesday advised Parliament to reject controversial amendments to the Companies Law that could tighten the government's control over the private sector.
The committee report, which will be discussed in the first meeting of the Senate on Thursday, recommended the cancellation of three clauses in article 168 which allow the trade and industry minister to appoint a committee to run private companies for up to two years.
The original article in the law entitles the minister to dissolve the board of any company suffering substantial losses or that has financial and administrative irregularities.
In such a case, the minister would appoint a committee of “experienced specialists” to run the firm for six months, renewable only once, during which, he will also have to call for a meeting of the company's general assembly in order to elect a new board.
The committee report stated there was no need to extend the duration of the committee for a second year, as recommended in the draft, on grounds that a one-year period was “sufficient to pinpoint the flaws in the company's management”
The appointment of such a committee is “an exceptional situation that must be terminated at the earliest opportunity to return to a normal situation where the company is managed by an elected board,” the report said.
The report also proposed to cancel a clause to include limited liability companies in this article.
The committee recommendations already drew positive reactions from the independent Al Arab Al Yawm, which contended that the committee has carried out the wishes of His Majesty King Abdullah to achieve economic reform.
The daily previously slammed the government, and claimed that the draft contradicted calls for economic liberalisation.
The government, however, defended the draft on grounds that economic liberalisation and privatisation of major sectors entailed strict monitoring to detect corruption and attract reputable investors.
The committee approved draft amendments to the Intellectual Property Rights Law, which were prerequisites to joining the Trade Related Aspects of Intellectual Property Rights.
Meanwhile, the Lower House of Parliament on Wednesday endorsed a draft patent law, which is one in a series of legislations required to encourage foreign investment and to join the World Trade Organisation.