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Amendments to privatization law restore «golden share» rule, IFC says

The International Finance Corporation (IFC) views a bill that would allow authorities to interfere in the management of privatized companies as a throwback to the “golden share” rule, Volha Shcherbina, head of the IFC's office in Belarus, said during a meeting of the National Club of Directors in Minsk on Thursday.

The enactment of the bill would damage Belarus’ investment climate and make foreign companies less interested in buying state assets, Ms. Shcherbina warned.

The House of Representatives gave first-reading approval to the bill of amendments to the Privatization Law in late June.

The draft legislation would allow the government to appoint its representatives to the boards of privatized companies where the government no longer has a stake. In addition, government officials would be given the right to represent minority stockholders in companies where the government holds a stake of less than 50 percent. In particular, government representatives would be entitled to vote on behalf of minority stockholders at meetings held by such companies' shareholders.

The bill would allow the government to suspend decisions made at a meeting of a company's stockholders "if the implementation of the decisions runs counter to public benefit and safety, damages the environment, violates other people's rights and interests protected by law."

The so-called golden share rule was used by the authorities between 1997 and 2008 to intervene in the management of any company formerly owned by the state. It was abolished in 2008 in an attempt to improve Belarus' investment climate.

International financial organizations, business associations and investors welcomed the abolition of the rule. //BelaPAN