The Role and Function of Corporation Sole – Terence Bhagwatsingh

Report
“Corporate Governance Seminar–
Promoting Effective State Enterprise Management”
Ministry of Finance and the Economy
Investments Division
1
OUTLINE
• THE MINISTER OF FINANCE INCORPORATION ACT
• POWERs AND FUNCTIONS OF CORPORATION SOLE AS
DEFINED BY THE ACT
• POWER AND FUNCTIONS OF CORPORATION SOLE AS
DEFINED BY OTHER LEGISLATION
• THE STATE ENTERPRISE SECTOR
• ROLE AND FUNCTION OF THE INVESTMENTS DIVISION ON
BEHALF OF CORPORATION SOLE
Ministry of Finance and the Economy
Investments Division
2
THE MINISTER OF FINANCE
INCORPORATION ACT
• The Minister of Finance Incorporation Act, act No. 5
of 1973 (chapter 60:03) incorporated the Minister of
Finance as Corporation Sole. By virtue of the Act the
Minister of Finance holds all property transferred or
vested in trust for the State.
Ministry of Finance and the Economy
Investments Division
3
POWERS AND FUNCTIONS OF CORPORATION
SOLE AS DEFINED BY THE ACT
The Corporation sole has the same characteristics of a
corporation that is the separation of the rights and the
duties of the corporate body and perpetual succession.
Therefore:
• The benefit of all Deeds, contracts, bonds, securities
or things in action is vested in the person appointed
to the office of Minister of Finance.
• The benefits of this office is transferred to and vested
in the person appointed to the office.
Ministry of Finance and the Economy
Investments Division
4
POWERS AND FUNCTIONS OF CORPORATION SOLE AS
DEFINED BY THE ACT
• To hold property :
– vested by the Act
– by virtue of any other written law
– as may from time to time in any other way be
vested in it.
• To exercise corporate powers in a manner it thinks
fit, subject to the special or general directions of the
President from time to time.
Ministry of Finance and the Economy
Investments Division
5
POWERs AND FUNCTIONS OF CORPORATION SOLE AS
DEFINED BY THE ACT
• With the permission of the President the Corporation has
the power to:
– to acquire, purchase, take, hold and enjoy movable
and immovable property of every description
– to convey, assign, surrender and yield up, mortgage,
demise, re-assign, transfer or otherwise dispose of, or
deal with any movable or immovable property vested
in the Corporation upon such terms as to the
Corporation seems fit.
• To accept surrenders, assignments or reconveyances and
to exchange any property and enter into contracts.
Ministry of Finance and the Economy
Investments Division
6
POWERS AND FUNCTIONS OF CORPORATION SOLE AS
DEFINED BY OTHER LEGISLATION
The relevant Acts include:
• The Constitution on the Republic of Trinidad and Tobago
Section 66 A-D
• The Exchequer and Audit Act
Ministry of Finance and the Economy
Investments Division
7
COMPOSITION OF THE STATE ENTERPRISE
SECTOR
The Minister of Finance (Corporation Sole) is responsible for the
State’s portfolio of investments of which the State Enterprise
Sector is a major element. At present, the portfolio includes:
• Forty-seven (47) wholly-owned companies
• Seven (7) majority-owned companies
• Five (5) minority-owned (i.e. less than fifty percent
holdings); and
• Twenty - nine (29) companies held indirectly as subsidiaries of
wholly-owned companies
Ministry of Finance and the Economy
Investments Division
8
ROLE AND FUNCTION OF THE INVESTMENTS
DIVISION ON BEHALF OF CORPORATION SOLE
The Investments Division of the Ministry acts on behalf of the
Minister of Finance (Corporation Sole) and carries out corporate
functions such as:
• Monitoring and Evaluation
• Facilitation Exercises
• Management Activities
• Governance Activities
• Receiver of Revenue
• Auditing Activities
• Rationalization of the State Enterprise Sector
• Divestment Activities
Ministry of Finance and the Economy
Investments Division
9
MONITORING AND EVALUATION
The Investments Division monitors the performance of State
Enterprises. The Performance Monitoring Manual outlines the
monitoring activities of the Division and reporting requirements
of the State Enterprise Sector.
These activities include:
• Collation of information on the indebtedness of the sector
• Management of the loan repayment portfolio of specific state
enterprises
• Review of board minutes and internal audit reports
• Review of Annual Financial Statements
Ministry of Finance and the Economy
Investments Division
10
MONITORING AND EVALUATION
• Review of Cash Flow Statements
• Maintenance of a Share Register
• Classification of State Enterprises, Statutory Bodies and
Cabinet Appointed Committees
• Maintenance of Boards Database
• The development of policies and procedures appropriate for
the management of the risk of State Enterprises
Ministry of Finance and the Economy
Investments Division
11
FACILITATION EXERCISES
The Investments Division of the Ministry acts on behalf of the
Minister of Finance (Corporation Sole) and performs
corporate functions such as:
• Appointment of Directors
• Representing Corporation Sole’s interest at Annual General
Meetings
• Facilitation of subsidy payments, capital injections and
deficit financing;
• Establishing new State Enterprises as directed
Ministry of Finance and the Economy
Investments Division
12
MANAGEMENT ACTIVITIES
Activities in support of the management functions of Corporation Sole
include:

Appraisal of Government’s Investment portfolio

Capital Expenditure Appraisal

Preparation of the Supplementary Public Sector Investment
Programme (SPSIP) with a view to managing the State Enterprise
Sector for the National Budget.
Ministry of Finance and the Economy
Investments Division
13
GOVERNANCE ACTIVITIES
Government’s mandate of effective corporate
governance include:
• Submitting audited accounts to the Public Accounts
(Enterprises) Committee (PAEC)
• Providing recourse for National Insurance complainants
through the National Insurance Appeals Tribunal (NIAT)
Ministry of Finance and the Economy
Investments Division
14
RECEIVER OF REVENUE
The Permanent Secretary in the Ministry of Finance
(Investments Division) holds the position of
Receiver of Revenue and is charged with the
responsibility for receiving dividend payments from
State Enterprises.
In this regard, the Investments Division is guided by
the Dividend Policy of the Government of Trinidad
and Tobago.
Ministry of Finance and the Economy
Investments Division
15
AUDITING ACTIVITIES
• Exchequer and Audit Act
• The Central Audit Committee
– Evaluation of tender procedures and reviewing the
award of contracts in respect of all State Enterprises
– Conduct of systems and value for money audits of
selected State Agencies for compliance with relevant
laws, regulations and internal control procedures
Ministry of Finance and the Economy
Investments Division
16
RATIONALIZATION OF THE STATE
ENTERPRISE SECTOR
These activities include:
• Periodic review of the State Enterprises Sector in order to
inform divestment proposals
• Review of the mandate and operations of the State
Enterprises Sector to facilitate synergies and more efficient
and economic organizations
Ministry of Finance and the Economy
Investments Division
17
THE END
Thank you.
Ministry of Finance and the Economy
Investments Division
18

similar documents