“Golden share”: Private business under total control

Officials can block any decision of shareholders of private companies.

Economist Barys Zhaliba spoke to charter97.org about the decision of the “house of representatives” on adopting a draft law that gives authorities the right to interfere with the activity of joint stock companies.

“Under the adopted draft law, the authorities resume control in the joint stock companies without the state's share. It is direct interference with the activity of private business. The state didn't misuse the 'golden share' rule earlier. But this decision can scare away foreign investors. We don't need it taking into account the intention of the authorities to create a good business climate in Belarus. This measure can be called anti-market. Belarus needs to decrease the state's strong interference in economy. But this decision shows that the authorities continue to tighten control over the private sector. Officials will now have the right of veto to block any decisions of shareholders that don't fit the authorities or don't meet their understanding of the development of a company.

Of course, this decision can be called the return of the 'golden share' rule. Time will show how often it will be applied,” the economist said.

Barys Zhaliba is confident that the draft law was initiated by Lukashenka. The expert gave other examples of tightening the state's control over private business.

“It's clear that the idea of the new law belongs to Lukashenka. He probably receives information that these or those joint stock companies develop 'in the wrong direction'. We should also turn attention to the parallel process of decreasing the rate of shareholders owing stakes less than a controlling stake. The example is the situation of Sukno joint stock company. Two Russians, who together owned a controlling stake, had to apply to a court protesting against the artificial cutting of their stake due to an addition emission. Of course they lost the case. This draft law supports this trend. Its initiators want to have total control over everything and influence the work of all joint stock companies, including those without the state's stake,” Barys Zhaliba said.

The “house of representatives” has adopted the draft law allowing officials to interfere with the work of any joint stock company.

In accordance with the draft law, representatives of the state can suspend decisions of the general meeting of shareholders if “the implementation of such decisions stays in conflict with public interests, harms the environment and restricts rights and interests of other persons”.