Parliament breathes life into Press Trust
Parliament yesterday passed the Press Trust Reconstruction Act (Amendment) Bill which, among others, seeks to cut its financial distribution stake and empower it to retain more funds from its profits for re-investment.
The Bill also enables the trust to support its investments by “borrowing or guaranteeing borrowing by its subsidiary and associate companies”.
Presenting the Bill, Minister of Justice Titus Mvalo said the proposed law will provide an enabling legislation for Press Trust Limited to enhance its capacity of implementing its mandate.
He said: “During the years that the Act has been in force, successive trustees have noted some challenges and limitations that have restricted Press Trust from meaningfully taking advantage of opportunities that become available.
“They include excessive distribution of income of Press Trust, in that at present Press Trust distributes 66 percent of profits to social development programmes which leaves very little resources, if any, for re-investment in the emerging commercial sector of the economy.”
The amended law will empower Press Trust to distribute 50 percent of its earnings, effectively increasing its retained earnings by 16 percent.
Debating the proposed law, members of Parliament (MPs) said they hoped it will help the trust resurrect while also urging the conglomerate to resuscitate its extinct subsidiaries, including People’s Trading Centre (PTC), which also traded under the franchise People’s and Spar.
In his contribution, opposition Democratic Progressive Party (DPP) spokesperson on the Bill Yusuf Nthenda said the former governing party supported the profits sharing aspect of the law.
“The Bill deserves support from the DPP. It is talking about sharing the proceeds that companies under this trust are making so that 50 percent should go to the investments and 50 percent to the people of Malawi,” he said.
On her part, United Democratic Front president Lilian Patel said she had earlier perceived that the Bill was terrible and positioned Malawi Congress Party, Press Trust former owner, to claim it back.
But after consultations, the Mangochi South parliamentarian said the amendment was crucial as it will resuscitate the conglomerate.
Government enacted the Press Trust Reconstruction Act in 1995 at the onset of multiparty dispensation to clarify its status.
The Bill also reduces trustees’ term of office from six to five years and “make provision for reasonable allowances to be paid to trustees in recognition of the time and effort they devote in administering the trust.”
Press Trust was formed in 1982 by founding president Hastings Kamuzu Banda as a platform to provide charitable donations which are in the interest of Malawians, including the advancement of their education, health, social welfare and housing.
