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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226 OF 1995

(December 20)

Official Journal No. 42.159 of 21 December 1995

By which article 60 of the Political Constitution is developed regarding the alienation of state ownership, measures are taken for its democratization and dictate other provisions.



ARTICLE 1o. APPLICATION FIELD. This law shall apply to the disposal, in whole or in part, in favour of individuals, shares or bonds obligatorily convertible into shares, owned by the State and in general, their participation in the social capital of any company.

The ownership of the state participation is determined either by the fact that the shares or the social stakes are in the head of the public bodies or the legal entities of which they are a party, or because they were acquired with public resources or from the Public Treasury.

For the purposes of this Law, when reference is made to the ownership property or any transaction that is mentioned above, it shall be understood to include bonds obligatorily convertible into shares, as well as any form of participation in a company's capital.

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ARTICLE 2o. DEMOCRATIZATION. All natural or legal persons may have access to the ownership property that the State enacts. As a result, mechanisms will be used in the disposal processes that guarantee wide publicity and free competition and procedures that promote the massive participation in the ownership of shares. The Act 80 of 1993 does not apply to these actions.

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ARTICLE 3o. PREVIEW. To ensure effective access to the State property, special conditions will be granted to the sectors indicated in the following indent, aimed at facilitating the acquisition of the state social participation offered, Article 60 constitutional.

They shall be recipients exclusive of the special conditions: the active and pensioners of the entity being privatised and of the entities where the latter has a majority holding; the former employees of the institution which is the subject of the privatization and the entities where the latter has majority participation as long as they have not been disengaged with just cause by the employer; the associations of employees or former employees of the entity that is privatised; unions of workers; federations of trade unions of workers and confederations of workers ' unions; employee funds; mutual funds for investment: the funds of cesanties and pensions; and the cooperative entities defined, by the cooperative legislation.

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ARTICLE 4. PROTECTION OF PUBLIC ASSETS. The disposal of state shareholding will be done under conditions that safeguard public assets. The resource of the balance sheet in which the proceeds of this disposal is constituted shall be incorporated in the budget to which the respective holder belongs in order to comply with the development plans, except in the case of making part of the funds parafiscal, in which event it will be used for the very object of the parafisquality.

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ARTICLE 5o. SERVICE CONTINUITY. When the ownership of an entity providing services of public interest is carried out, the necessary measures shall be taken to ensure the continuity of the service.


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ARTICLE 6o. The government shall decide, in each case, the disposal of the ownership of the national level, as referred to in Article 1, of this Law, by adopting a the disposal program, designed for each particular event, that will be subject to the provisions contained in this Law.

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ARTICLE 7o. Corresponding to the Ministry of Finance and to the Ministry of Finance and Public Credit, in coordination with the Ministry of Finance and Public Credit. the program of the respective disposal, directly or through suitable institutions, public or private, contracted for the effect according to the rules of private law.

The shareholding programme shall be carried out on the basis of corresponding technical studies, which shall include the valuation of the entity whose shares are intended to be used. This assessment, in addition to the conditions and nature of the market, should consider the technical variables such as the profitability of the institution, the commercial value of the assets and liabilities, the support of the Nation, which will lead to the determination of the value for each case of disposal.

PARAGRAFO. The programmes for the disposal of shares, the ownership of which corresponds to the territorial entities, of the tele-associated mixed-economy companies, in which there is a share of the capital of Telecom, may only be executed from 1o. of January 1998.

The design of the disposal program will be sent to the Ombudsman's Office so that it, if it deems it necessary, will take the necessary measures to guarantee the transparency of the program.

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ARTICLE 8o. The minister of the respective branch and the Minister of Finance and Public Credit will the draft of the program of disposal for consideration by the Council of Ministers. favourable, it shall forward it to the Government for further approval.

PARAGRAFO. The plan of annual disposal in a global way with their respective preliminary , must be presented to the Congress of the Republic for the first 60 days of the year.

The Ministry of Finance, within a period of two months from the time of this Law, will present to the Congress a list of the national state companies that are going through a bad economic moment.

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ARTICLE 9o. The disposal of the shareholding will be done using mechanisms that contemplate conditions of wide publicity and free competition.

When the hammer operations are used, they shall be carried out in accordance with the operating regulations of the hammers of the stock exchanges and the rules for their operation fixed by the Superintendency of Securities.

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ARTICLE 10. In addition to the legal provisions, the content of the disposal program, in each particular case, will comprise the following aspects:

1. It shall establish the stages in which the disposal procedure shall be carried out, taking into account that, in a private manner, the first stage shall be aimed at the addressees of the special conditions referred to in Article 3o. of this Law.

2. It shall include the special conditions referred to in the following Article of this Law.

You will have the form and payment terms of the share price.

It shall fix the minimum price of the shares which are not acquired by the recipients of the special conditions under the development of the disposal programme, which, in any event, may not be lower than those laid down by those special conditions.

5. It shall indicate the other aspects for the proper implementation of the sales programme.

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ARTICLE 11. The shareholding that is approved for each particular case, will comprise the following special conditions, of which the exclusive recipients will be those mentioned in the article 3o., of this Act:

1. They will be offered in the first place and exclusively the totality of the actions they intend to take.

2. A fixed share price shall be fixed equivalent to the price resulting from the valuation provided for in Article 7, of this Law, which shall have the same validity as that of the public offering, provided that, within it, there would have been no interruptions. In the event of an interruption or the end of the offer, the fixed price may be adjusted by the government following the parameters set out in that article 7or.

3. The execution of the disposal programme shall be initiated when the holder, or one or more institutions. have established credit lines or payment terms to finance the acquisition of the shares for sale, which involve an available financing of not less than, as a whole, 10% of the total of the shares covered by the programme Disposal, which shall have the following characteristics:

a. The amortisation period shall not be less than 5 years;

b. The interest rate applicable to the acquirers of the special conditions may not exceed the current bank interest rate certified by the Banking Superintendency, in force at the time of the granting of the credit,

c. The period of grace to capital may not be less than one year. Interest caused during that grace period may be capitalised, for payment, in conjunction with capital amortization fees;

d. Shares to be purchased with the credit product shall be eligible as collateral. The value of the shares, in order to determine the coverage of the guarantee, shall be the fixed, initial or adjusted price for the sale of the securities.

4. Where the acquirers are natural persons, they may use the assets they have accumulated in order to acquire such shares.

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ARTICLE 12. As a result of program execution:

1. The statutes will be changed, if applicable.

2. The privileges will be lost and the obligations that the entity had, to support the public's character, will be lost, according to the percentage of actions that remain in the hands of the individuals.

3. Any liability arising from such actions shall cease from the public bodies which supported their ownership, except that determined by the law or which has been expressly excepted in the programme of disposal.

4. The other measures corresponding to the change in ownership of the shares shall be taken.

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ARTICLE 13. When the State decides to dispose of the shares of a company, the government will exclude from the disposal program the rights that such an entity has on foundations, works of art and in general related to the historical and cultural heritage.

Such assets and rights will be transferred in favor of the Nation or the national public entity that the Government determines.


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ARTICLE 14. The program of disposal that will be issued by the Government for each case will have the corresponding measures to avoid the conduct that will be in the general principles of this law. These measures may include the limitation of the negotiability of the shares, to the recipients of special conditions, for up to 2 years from the date of disposal: in the event of the disposal of such shares before This time limit shall be imposed in accordance with the time elapsed between the acquisition of the shares and the time of disposal, the penalties shall be recorded in the disposal programme.

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Without prejudice to the applicable criminal provisions, if at any time it is determined that the acquisition was made in contravention of these provisions or those that regulate it for each particular case on the beneficiary or actual acquirer, the business will be ineffective.

Without prejudice to limitations that may be imposed on recipients of special conditions, charges on the management level of the entity in the privatisation process may only acquire shares up to a maximum of 5 times their value. annual remuneration.

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ARTICLE 15. The absolute nullity of the contracts for the sale of shares of state entities can only be invoked by the contracting parties or the Public Ministry. The relative nullity only can be invoked by the one in whose favor it is set.

In case of ineffectiveness or declaration of nullity of the stock purchase contracts,only will result in the return of the shares when the seller public authority so requests. In any event, there will be no place to obtain the restitution of shares held by third parties in good faith. Where there is no place for the refund, only the corresponding pecuniary repairs may be carried out.

These provisions, because of procedural character, are immediate application.

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ARTICLE 16. In the disposal program that is adopted for each case, the government will determine the authority responsible for granting the authorizations related to the acquisition of a given percentage of the shares offered for sale and the conditions to be met by each potential acquirer in order to preserve the continuity of the service.


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ARTICLE 17. The territorial entities and their decentralized entities, when they decide to alienate the participation of them, will be governed by the provisions of this Law, adapting them to the organization and conditions for each of these and those.

The Municipal or District Councils or the Departmental Assemblies, as the case may be, will authorize the corresponding enajenations in the territorial order.

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ARTICLE 18. Without prejudice to the provisions of this Law, in the case of the disposal of the participation of the State or the Fund of Guarantees of Financial Institutions in financial institutions or Insurance institutions shall apply the provisions of the Organic Statute of the Financial System.

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ARTICLE 19. The parafiscal funds, agricultural and agricultural funds, including the livestock funds and the National Coffee Fund, will not be included among the beneficiaries of special conditions.

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ARTICLE 20. The shareholding that is performed between state bodies does not conform to the procedure provided for in this Law, but for this purpose, only the contracting rules will apply. (i) Likewise, the sale of state assets other than shares or bonds obligatorily convertible into shares will only be subject to the general procurement rules.

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ARTICLE 21. For the purpose of facilitating the processes of the disposal of state ownership and the intermediation of securities, stock exchange companies may have agents and agents for the development of its activity, without prejudice to the fact that the Superintendency of Securities determines the rules it deems necessary for its proper functioning.

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ARTICLE 22. The shareholding of the cattlemen's funds shall be made in accordance with the provisions of the law governing the matter.

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ARTICLE 23. 10% of the net proceeds of the disposal of the shares or bonds obligatorily convertible into shares, excluding those corresponding to the financial institutions, shall be invested, on the part of the Government, in the execution of regional development projects in the same territorial, departmental or district entity in which the principal activity of the company whose shares are located is located.

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ARTICLE 24. When judicial decisions are made that declare the nullity of the contracts for the sale of shares to private individuals for facts not attributable to the buyers, the Government may adopt the measures it deems appropriate to maintain the stability of the company sold and will be able to promote the continuity of the private participation in them.

The government will be able to take measures to provide confidence and security for the acquirers and to prevent damages arising from the State's action for the events foreseen in the previous paragraph.

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ARTICLE 25. The selling entities, directly or through specialized firms, may carry out activities to promote the disposal of programs covered by this Law in order to facilitate and organise the participation of beneficiaries of special conditions in those programmes. In order to ensure compliance with this purpose, tenders to be made to the beneficiaries of the special conditions shall be made for a period of at least two (2) months.

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ARTICLE 26. This Law governs from the date of its publication and repeals the provisions that are contrary to it, inter alia, paragraph 3. Article 311 of Decree 663 of 1993.

Republic of Colombia-National Government

Publish and execute.

Dada en Santafe de Bogotá, D. C., at 20 December 1995.

The President of the Senate of the Republic,


The Secretary General of the Senate of the Republic,


The Speaker of the House of Representatives,


The Secretary General of the House of Representatives,



The Minister of Finance and Public Credit,


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