Innovations of the Law 'On Joint-Stock Companies and Protection of shareholders rights' (the new edition) discussed
On May 14, the National Press Center of Uzbekistan hosted a press conference aimed at explaining the purpose, nature and content of the Law of the Republic of Uzbekistan "On joint-stock companies and protection of shareholders' rights" in the new edition which came into force on 7 May this year.
The event was organized by the State Competition Committee jointly with the Securities Market Coordination and Development Centre.
The press conference was attended by senior officials of the Committee and the Center, representatives of economic associations and joint stock companies, professional participants of the securities market and the media.
During the event it was stressed that the purpose of the new edition is to further develop the corporate governance system in the country based on the specification and refinement of the law in force, to raise shareholders legal protection, including minority shareholders, increasing the role and importance of management and control bodies of joint stock companies, as well as ensuring transparency of joint stock companies.
As noted in reports, the main innovations specified in the Law are:
- abolition of the division of joint stock companies into open and closed;
- reduction of the list of mandatory rules to be specified in the Company's Charter ;
- setting the maximum size of the nominal value of a share (5,000 soums);
- open subscription to shares exclusively on exchange and OTC market , as well as reducing the minimum amount of share placement (from 60% to 30%) to recognize the share issue accomplished;
- lowering the minimum quorum requirements of the shareholders (from 60% to 50%, and at the second convocation down to 40%);
- approval of JSC’s organizational structure by the shareholders general meeting;
- abolition of the requirement to hold general meeting of shareholders, if all common shares are owned by one shareholder;
- restrictions on payment and taking decision on payment of dividends , as well as establishment of the 3 year-term) for company to own unclaimed dividends;
- provision to Supervisory Board of authority to take decisions on transactions involving non-profit organizations, as well as audit (on apointing external auditor and the maximum amount of payment for its services );
- creation of company official web site and e- mail;
- creation of subsidiaries and affiliated companies only in the form of stock or LLC;
- revision of the definition of a major transaction and requirements for the making transactions with affiliates ;
- establishing a requirement for listed companies to disclose the required information on the website of the stock exchange and etc.
During the event, the officials of stock exchange, economic associations, scientific and academic communities also delivered speeches.
In the end of the press conference, the participants exchanged views, got satisfactory answers to all their questions.
Reference: As of May 1, 2014 the total circulating shares in Uzbekistan at the nominal value is equivalent to 11.3 trillion soums. In 2013 joint-stock companies issued primary and additional shares at par value amounting to 3.2 trillion soums, and in Q1 of this year this figure reached 1.4 trillion soums.