CHAPTER 127
PRIVATISATION TRUST ACT

[PRINCIPAL LEGISLATION]

ARRANGEMENT OF SECTIONS

   Section

Title

PART I
PRELIMINARY PROVISIONS

   1.   Short title.

   2.   Interpretation.

PART II
ESTABLISHMENT OF THE PRIVATISATION TRUST

   3.   Establishment and life span of the Trust.

   4.   Objects and functions of the Trust.

   5.   Board of Trustees.

   6.   Meetings of the Board.

PART III
ADMINISTRATION OF THE TRUST

   7.   Receipt, holding and divestment of shares.

   8.   Disposal of undistributed shares.

   9.   Offer of shares in public corporation or newly privatised enterprises to the Board.

   10.   Power to acquire shares.

   11.   Board to have regard to Divestment Plan.

   12.   Board requirements in relation to Divestment Plan.

   13.   Holding of shares.

   14.   Amount available for distribution.

PART IV
MANAGEMENT OF THE TRUST

   15.   Management of the Trust.

   16.   Management fees.

PART V
FINANCIAL PROVISIONS

   17.   Valuation.

   18.   Financial year of the Trust.

   19.   Auditing and reporting.

   20.   Fees and expenses.

   21.   Costs and expenses of the Manager.

   22.   Taxation status of Trust.

   23.   Remuneration and indemnity of Trustees.

   24.   Money and banking.

   25.   Records and accounts.

   26.   Board’s duty to maintain report.

   27.   No power to borrow.

PART VI
GENERAL PROVISIONS

   28.   Disclosure of interests.

   29.   Confidentiality.

   30.   Exclusivity.

   31.   Conflicts and disclosures.

   32.   Ratification, indemnity and extent of liability.

   33.   No lien.

   34.   Agents.

   35.   Amendment to existing enactments.

   36.   Regulations.

   37.   Duration of this Act.

CHAPTER 127
THE PRIVATISATION TRUST ACT

An Act to provide for the establishment of the Privatisation Trust, to define its obligations and functions in relation to the promotion of broader share ownership by citizens of the United Republic of Tanzania, and for matters connected thereto.

[15th June, 1997]
[G.N. No. 334 of 1998]

Act No. 7 of 1997

PART I
PRELIMINARY PROVISIONS (ss 1-2)

1.   Short title

   This Act may be cited as the Privatisation Trust Act.

2.   Interpretation

   In this Act, unless the context otherwise requires–

   "accounting date" means the last working day of the month of March, June, September and December in any year during the Trust period;

   "auditors" means the auditors of the Privatisation Trust appointed under section 19;

   "Board" means the Board of Trustees established under section 5;

   "Commission" means the Presidential Parastatal Sector Reform Commission established under the Public Corporation Trust appointed under section 19;

   "Divestment Plan" means a plan prepared by the Manager and approved by the Board under section 12;

   "eligible institution" means an entity established in Tanzania which allows participation by the general public and which, in the opinion of the Trustees, have been established with the objective of benefiting citizens by investing its assets in among other things, equity securities effectively for the benefit of its members;

   "eligible investor" means a citizen of Tanzania or an eligible institution;

   "investee company" means a newly privatised enterprise in which the Trustees have acquired shares;

   "management contract" means the contract under which the manager is appointed to undertake the management of the Privatisation Trust;

   "Manager" includes a professional management company or merchant bank appointed under section 15;

   "Minister" means the Minister responsible for finance;

   "newly privatised enterprise" means a company which has been privatised by the transfer of shares carrying a majority of the voting rights in the company to a buyer or buyers none of which is an agent or instrumentality of the Government or a company in which the Government or any such agency or instrumentality holds less than thirty percent of the issued shares;

   "public corporation" means any corporation established under any written law and in which the Government or its agent owns majority of the shares or is the sole shareholder;

   "services" means the duties, powers and obligations of the Manager under the Management Contract;

   "shares" means the shares in newly privatised enterprises or any other securities derived therefrom acquired by the Trustees;

   "Special Fund" means a fund established under subsection (1) of section 34 of the Public Corporations Act *;

   "Trust" means the Privatisation Trust established under section 3;

   "Trustees" means the Trustees for the Trust;

   "Trust period" means the life of the Trust as prescribed in paragraph (d) of subsection (2) of section 3;

   "Trust property" means the shares selected and acquired by the Trustees together with income or other assets whether accruing from the shares, proceeds of sale of shares, or interest accruing on monies received by and held by the Trustees for the account of the Trust;

   "undistributed shares" means shares which at the end of the Trust period have not been sold or otherwise subject to a binding commitment to sell under the provisions of this Act.

PART II
ESTABLISHMENT OF THE PRIVATISATION TRUST (ss 3-6)

3.   Establishment and life span of the Trust

   (1) There is established a trust which shall be known as the Privatisation Trust.

   (2) The Trust shall–

   (a)   be a body corporate with a common seal and may sue or be sued in its corporate name;

   (b)   be an independent entity of the highest integrity and professionalism;

   (c)   for the purpose of discharging its functions under this Act have power to acquire, hold or dispose of any movable or immovable property or enter into any contract or transaction;

   (d)   subject to section 8, be in existence for five years from the first accounting date to occur following the coming into operation of this Act.

4.   Objects and functions of the Trust

   The objects and functions of the Trust shall be–

   (a)   to acquire shares in newly privatised enterprises for sale by public offering to achieve a wide distribution among citizens and to obtain sale proceeds which are reasonable in the circumstances prevailing from time to time;

   (b)   to encourage and facilitate wider participation by citizens in the ownership of privatised enterprises;

   (c)   to have responsibility on the disbursement of proceeds in accordance with this Act;

   (d)   to advise the Minister and the Commission on matters relating to the administration of this Act;

   (e)   to manage and administer the Trust with a view to ensure that the objectives of the Trust are achieved;

   (f)   to ensure that shares are sold or distributed; as the case may be, to any eligible investor.

5.   Board of Trustees

   (1) There shall be established a Board of Trustees which shall be the governing body of the Trust.

   (2) The Minister shall appoint the Trustees, and in appointing Trustees the Minister shall have regard to persons of good standing in the community, and who have a sound knowledge or experience on matters pertaining to the objects of the Trust.

   (3) The Board shall consist of not less than five and not more than seven members who shall work on part time basis.

   (4) A Chairman (or in his absence a Vice-Chairman) shall be elected by the Trustees every one year from the first meeting of the Board and shall be eligible for re-election.

   (5) A Trustee may cease to hold office if he–

   (a)   is disqualified from acting as a Trustee by virtue of the provisions of the Trustees' Incorporation Act *;

   (b)   becomes incapable by reason of mental disorder, illness or injury certified by an independent, qualified medical doctor, of managing and administering his affairs;

This section of the article is only available for our subscribers. Please click here to subscribe to a subscription plan to view this part of the article.