Why Article 60 Of The Constitution Is Developed Regarding The Sale Of The State Share Ownership, Measures Are Taken For Democratization And Other Provisions

Original Language Title: Por la cual se desarrolla el artículo 60 de la Constitución Política en cuanto a la enajenación de la propiedad accionaria estatal, se toman medidas para su democratización y se dictan otras disposiciones

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LAW 226
1995 (December 20)
Official Gazette No. 42,159, of December 21, 1995
Whereby Article 60 of the Constitution is developed regarding the transfer of stock ownership state, measures are taken for democratization and other provisions.
ARTICLE 1o. SCOPE. This law shall apply to the sale, total or partial in favor of individuals, of shares or bonds convertible into shares, owned by the state and, in general, their participation in the share capital of any company.
The ownership of state participation is determined either by the fact that the shares or shares are headed by public bodies or legal persons of which they are part, or because they were acquired with public funds or Treasury.
For the purposes of this Act, when referring to stock ownership or any operation mentioned above it is made, be construed as including the mandatory convertible bonds into shares, the same as any form of participation in the capital of a company . Effective Jurisprudence


Article 2.
. DEMOCRATIZATION. All natural or legal persons may have access to share ownership that alienates State. Consequently, in the processes of alienation mechanisms to ensure wide publicity and free competition and procedures that promote mass participation in share ownership will be used. Law 80 of 1993 does not apply to these processes of alienation equity.

ARTICLE 3. PREFERENCE. To ensure effective access to state property, special conditions will be granted to the sectors indicated in the following paragraph, aimed at facilitating the acquisition of state offered social participation, according to Article 60 of the Constitution.
Will be exclusive recipients of special conditions: active workers and pensioners of the entity being privatized and entities where the latter has a controlling interest; the former employees of the entity subject of privatization and entities which the latter is always majority stake and they have not been terminated for just cause by the employer; associations of employees or former employees of the entity to be privatized; labor unions; federations of trade unions and confederations of trade unions; employees funds; mutual funds: the unemployment funds and pension systems; and cooperative entities defined by the cooperative legislation. Effective Jurisprudence

ARTICLE 4. Protection of public property. The sale of the state shareholding will be able to safeguard public assets. The resource balance that the product of this alienation is constituted, be incorporated in the budget that owns the respective holder to comply with the development plans, except in the case that is part of the fiscal funds, in which event will allocate the object of the parafiscality same.

The 5th ITEM. CONTINUITY OF SERVICE. When the share ownership of an entity that provides services of public interest is disposed of, the measures necessary to ensure continuity of service will be taken.

ARTICLE 6o. The government will decide, in each case, the transfer of share ownership at the national level, to article 1 relates., Of this Act, adopting a disposal program designed for each particular event, which is subject to the provisions of this Act.

ARTICLE 7. It will be up to that holder or to which holders of social participation are attached or linked, in coordination with the Ministry of Finance and Public Credit, design the program respective transfer, directly or through appropriate public or private institutions Ministry, hired to the effect according to the rules of private law.
Equity disposal program will be made based on relevant technical studies, which include the assessment of the entity whose shares intends to dispose of. This assessment, in addition to the conditions and nature of the market, should consider the technical variables such as profitability of the institution, the market value of assets and liabilities, the support of the nation, leading to the determination of the value for each case of alienation.

PARÁGRAFO. Programs sale of shares whose ownership corresponds to local authorities, societies teleasociadas mixed economy in which there is participation capital of Telecom, can be implemented only from 1o. January 1998.
design disposal program copy will be sent to the Ombudsman for it, if necessary, take the necessary measures to ensure its transparency.

Article 8. Minister of the respective branch and the Minister of Finance presented the draft program of disposal for consideration by the Council of Ministers. which, prior favorable opinion, forward it to the Government for approval.
PARÁGRAFO. The annual sale plan globally with their preliminary assessments should be presented for information to Congress during the first 60 days of the year.
The Ministry of Finance within a period of two months from the effective date of this Act, shall list the national state enterprises going through a bad economic moment to Congress. Effective Jurisprudence

Article 9. The sale of the stake will be done using mechanisms that address conditions of wide publicity and free competition.
When used hammer operations shall be conducted in accordance with the operating regulations of the hammers of the stock exchanges and the rules for its operation set by the Superintendencia de Valores.

ARTICLE 10. In addition to the provisions of the laws, the contents of the disposal program, in each particular case, include the following:
1. It will establish the stages of the procedure of disposal will take place, given that, privative way, the first stage will be aimed at recipients of the special conditions listed in Article 3o., of this Law.
2. It includes special conditions to which the following article refers this Law.
Provide the manner and terms of payment of the price of the shares.
Shall determine the minimum share price in program development alienation not be acquired by the recipients of the special conditions, which, in any case, may not be less than that determine such special conditions.
5. It will indicate other aspects for the proper implementation of the program of sale.

ARTICLE 11. The share sale to be approved for each particular case, include the following special conditions, which will be exclusive recipients referred to in article 3 of this Act.
One. They will be offered first exclusively and all the actions it intends to alienate.
2. They were set a fixed I drive it price equal to the price resulting from the assessment provided for in article 7., of this Law, which will have the same effect as that of the public offering, provided that, within it, had not existed interruptions. If any interruption or the expiry of the offer, you can adjust the price fixed by the government following the parameters indicated in that article 7.
3. The implementation of the program of disposal when the holder or one or more institutions will start. have established lines of credit or payment terms to finance the acquisition of shares for sale, involving funding available from no less credit, as a whole, 10% of the shares of the disposal program, which will the following characteristics:
a. The repayment period shall not be less than 5 years;
B. The rate of interest applicable to the acquirers recipients of the special conditions shall not exceed the current bank interest rate certified by the Banking Superintendency force at the time of lending,
c. The capital grace period shall not be less than one year. The interest accrued during the grace period will be capitalized for payment, together with repayment installments into capital;
D. will be eligible as collateral the shares acquired with proceeds of credit. The value of the shares, to determine warranty coverage will be fixed, or adjusted initial price of those sales.
4. When the buyers are individuals, they may use layoffs that have accumulated in order to acquire these shares. Effective Jurisprudence

ARTICLE 12. As a result of the implementation of the program:

1. It will proceed to change the statutes, if the case.
2. privileges are lost and terminate the obligations that the entity had, by sustaining the public amenity, according to the percentage of shares remaining in private hands.
3. It originated cease all responsibility for these actions by public bodies that supported their ownership, except those determined by law or has been expressly excepted in the disposal program.
4. other measures relating to the change of ownership of the shares will be taken.

ARTICLE 13. When the State decides to dispose of the shares of a company, the Government excluded from rights transfer program such entity has on foundations, works of art and general goods related to the historical and cultural heritage.
Such assets and rights will be transferred in favor of the Nation or public national entity determined by the Government.

ARTICLE 14. The disposal program for each case issued by the Government arrange appropriate measures to avoid behaviors that violate the general principles of this law. These measures may include restrictions on the negotiability of the shares, the recipients of special conditions, for up to 2 years from the date of sale: in case of disposal of such actions occur before the deadline gradual fines imposed according to the time between the acquisition of shares and the time of disposal time, these sanctions will be reflected in the program of disposal. Effective Jurisprudence

Without prejudice to the penal provisions that are applicable, if at any time it is determined that the acquisition was made in violation of these provisions that regulate or for each individual case on the beneficiary or actual purchaser, the business will be ineffective.
Notwithstanding the limitations that can be imposed on recipients of special conditions, charges the executive level of the organization in the privatization process, may acquire shares for a maximum of 5 times their annual remuneration. Effective Jurisprudence

ARTICLE 15. The absolute nullity of contracts of sale of shares of state entities may only be invoked by the contracting parties or by the Public Ministry. The relative nullity may invoke only one in whose favor it is established.
In case of ineffectiveness or declaration of nullity of contracts of sale of shares will only result in the refund of shares seller when the public body so requests. In any case, there will be no place to obtain restitution of shares are held by third parties in good faith. When there is no place to restitution may occur only rise to the corresponding pecuniary reparations.
These provisions, being of a procedural nature, are of immediate application. Effective Jurisprudence

ARTICLE 16. The disposal program for each case the Government is adopted will determine the body responsible for granting authorizations related to the acquisition of a certain percentage of the shares offered for sale and the conditions that should be fulfilled each potential acquirer, in order to preserve the continuity of service. OTHER PROVISIONS

ARTICLE 17. The territorial entities and decentralized, when they decide to dispose of the stake held by them shall be governed by the provisions of this Act, adapting them to the organization and conditions of each of these and those.
Municipal or District Councils or the departmental assemblies, as the case shall authorize, in the territorial order corresponding divestitures. Effective Jurisprudence

ARTICLE 18. Without prejudice to the provisions of this Act, in the case of the sale of state involvement or the Guarantee Fund of Financial Institutions in financial institutions or insurance companies, the provisions of the Organic Statute apply System Financial.
be included among the beneficiaries of special conditions parafiscal funds, agricultural and fishery funds, including livestock funds and the National Coffee Fund.

ARTICLE 20. The share sale that is made between state bodies not consistent with the procedure provided in this Act, but for this effect, existing administrative rules only apply procurement. Likewise, the sale of state assets other than shares or mandatory convertible bonds only be subject to the general rules of contract. Effective Jurisprudence

ARTICLE 21. In order to facilitate the processes of alienation of state property and equity securities brokerage, stock brokerage companies may have agents and agents for the development of its business, without prejudice to the Superintendency of values ​​determine the rules it deems necessary for its proper functioning.

ARTICLE 22. The share sale of the livestock funds shall comply with the provisions of the law governing the matter.
10% of the net proceeds from the sale of shares or mandatory convertible bonds into shares, excluding those for financial institutions, are invested by the government in the implementation of development projects in the same territorial regional, departmental or local entity in which the main activity of the company whose shares are disposed of is located. Effective Jurisprudence

ARTICLE 24. When court decisions declaring the nullity of contracts of sale of shares sold to individuals for reasons not attributable to purchasers events occur, the Government may take the measures it deems appropriate aimed at maintaining the stability of the company sold and may promote continuity of private participation in them.
The Government may take measures to provide trust and confidence to purchasers and to prevent damage resulting from the action of State for the events referred to in the preceding paragraph. Effective Jurisprudence

ARTICLE 25. The selling entities, directly or through specialized firms may undertake advocacy programs that disposal of this Act is to facilitate and organize the participation of the beneficiaries of special conditions in these programs . To ensure compliance with this purpose, the offers that are made to beneficiaries of the special conditions must be made for a minimum period of two (2) months.

Article 26. This Law governs from the date of its publication and repeals provisions that are contrary to, among others, the 3rd paragraph. Article 311 of Decree 663 of 1993

Republic of Colombia - National Government
published and execute.
Given in Bogota, DC, 20 December 1995.
The President of the Senate, JULIUS CAESAR
Tulena WAR.
The Secretary General of the Senate of the Republic,
The Speaker of the House of Representatives,
Rodrigo Rivera Salazar.
The Secretary General of the House of Representatives, DIEGO VIVAS

Ernesto Samper Pizano Minister of Finance and Public Credit, WILLIAM PERRY RUBIO