Council of Ministers: No more cheap JSCs for sale

The Council of Ministers of Belarus prepared special calculation formulas.

The government of Belarus adopted ruling No. 285 of March 29, 2012, legitimating certain requirements and approaches proposed by Alyaksandr Lukashenka regarding the sales of state-owned joint stock companies, which main sense of existence is pumping as much money as possible out potential investors, AFN reports.

The document allows all joint stock companies to set a starting selling price on the basis of the market value, not the book one. Until now, the market value was used to set initial prices of shares of banks and stock companies owning land plots in Minsk and regional centres.

At the same time the document has a strict condition – the initial selling price must be the highest possible, for which the Council of Ministers worked out special formulas. Proposing to set the highest price may be explained by the fact that the authorities are prepared for different results of evaluations of a company – from the “real” evaluation, to “we think so” evaluation, “we'd like” evaluation or “at least $1 (30)bn” evaluation.

Besides, the ruling says the market value cannot be lower than the nominal value. The authorities seem to think Belarusian enterprises do not operate at a loss.

The ruling entitles all stock companies to use the novelty introduced last year – adjusting the initial price to the price index of manufacturers of industrial products for technical and industrial use. It means that the initial price of a share of a joint stock company set on January 1 of the current taxation period must be adjusted to the inflation rate as of the time of sales.