Advanced Search

Law No. 2003-051 Recasting Law No 96-011 Of 13 August 1996 On The Divestiture Of Public Sector Enterprises

Original Language Title: Loi n°2003-051 portant refonte de la Loi n°96-011 du 13 août 1996 portant désengagement de l’Etat des entreprises du secteur public

Subscribe to a Global-Regulation Premium Membership Today!

Key Benefits:

Subscribe Now for only USD$40 per month.
REPOBLIKAN'I MADAGASIKARA Tanindrazana - Fahafahana - Fandrosoana
Law No. 2003-051
recasting Law No. 96-011 of 13 August 1996
divestiture of public sector enterprises | EXPLANATORY MEMORANDUM ||
the divestiture in Madagascar has experienced various types of structures and miscellaneous set of concepts. The experiments were rewarding since the first "privatization" of reproducers Nurseries Centres 80s, passing through the privatizations carried out under the aegis of the Interministerial Committee for Public Enterprise Turnaround in collaboration with the Professional Association of Banks (ESR / PDB 1985- 89), the ad hoc Committee from 1989 to 1990 and by the General Delegation of the Government for the Reform of Public Enterprises Sector (DGGP).
With the 96-011 Act, a new statement and a new structure - the Privatization Committee - have emerged.
The practice of these diverse experiences, knowledge of the successes and failures of the various countries in privatization and above all a better definition of the Economic Policy Framework and best practice of liberalization and competition in a context of economic globalization leads today to highlight the following key points:
1 - Privatisation Act shall be governed by general principles respecting:
- the provisions of the Constitution; - The right of Companies and the Commercial Code (bankruptcy and judicial settlement, ...); - Statutes of the Company (statutory bodies, statutory procedures, statutory rights: preemption, right of access, ...).
- The law should clearly define:
- public company; - The concept of "national" (natural person or legal entity); - transparency.
3 The Act does not go into operational details that fall rather regulatory domain and that can be changed quickly depending on developments.
4- The divestiture program is an integral part of government policy.
The institutional organization of disengagement must favor the Government decision as a forum and implementing body of the policy defined by the Legislature.
The Government can not transmit this decision-making responsibility to "servant" not invested with political power and can not directly accountable to the legislature.
5- The Law must provide a structure (Technical Secretariat) in charge of ensuring a minimum balance mechanism, coordination and transparency and to safeguard the public interest during the disengagement.
The technical secretariat will recommend the withdrawal of measures to the Government in light of studies conducted by a working group of the skills of ministerial departments.
The transactions will be subject to specific regulations that guarantee the assignment, maximum yield for the state, a fair process for the public and ensuring that the purchaser is able to manage the business productively.
Considering all the above, the Government intends to advance the process of disengagement of the State of Public Enterprise Sector by a proposed law capitalizing on past experiences to improve and accelerate the conduct of the divestiture program of State.
This is the purpose of this Act.

2 REPOBLIKAN'I MADAGASIKARA Tanindrazana - Fahafahana - Fandrosoana
Law No. 2003-051
recasting Law No. 96-011 of 13 August 1996 disengagement
of State of public sector enterprises
the national Assembly and the Senate have adopted in their respective session dated 19 December 2003 and 23 December 2003, the Act which reads as follows:
.- this Article law defines the disengagement principles of the rule of the public enterprise sector. TITLE I DEFINITIONS

Art.2.- Are Public Enterprises within the meaning of this Act, all companies in which the State holds directly or indirectly more than half of the capital.
For the purposes of this Act, the Public Institutions are Public Enterprises.
However, the state can withdraw from activities entrusted to public establishments. In this case, the divestiture will be made according to the procedures defined by the statutes of these establishments, possibly suppléées or supplemented by regulations.

Art.3 .- For the purposes of this Act, the term "national" natural persons holders of Certificate of Malagasy nationality, or companies, legal persons, the majority of whose capital is owned by domestic shareholders.
Are considered legal persons domestic shareholders whose majority shareholding is owned by nationals.
However, a corporation can not be considered as "national" if its headquarters in Madagascar.

3 Art.4 .- For the purposes of this Act, the term "transparency" means the prior need of explanation in the specifications and advertising of all measures of favor or that restriction which 'they are about the ability of a person to acquire, that person whether natural or legal, national or foreign.
The "transparency" so defined must govern the drafting of specifications for there to be absolutely automaticity in auctions without the need for recourse to any interpretations.
Art. 5 .- For the purposes of this Act, the term "port" means the non-immediate payment to the State of certain shares sold to favored buyers whose quality will be fixed by regulation.
Art. 6 .- Direct or indirect minority stakes of state, current or following a disengagement operation will be managed and eventually sold under the common law and statutory provisions, except with regard to minority interests porting object.
Art. 7 .- Any acquisition of the additional state in companies where he is a shareholder directly or indirectly is prohibited if it has the effect of increasing the rate of participation in the company beyond half the capital.
TITLE II INITIATIVE OF WITHDRAWAL
Art. 8 .- The initiative of disengagement of the State Public Enterprise returns either the Government or the direct or indirect state representatives in the statutory bodies of the company, or by persons authorized by law in if normal or early dissolution.
The bankruptcy or judicial settlement will be in accordance with procedures prescribed by the law governing trade.
In any case, the Government should be notified and kept control decisions from the preparation to the closing of the Disengagement Transaction in accordance with the law and statutes.
Art. 9 .- The divestments of the State of Public Enterprises already decided before the entry into force of this Act will be prosecuted. The 4

disengagement practical arrangements will be adapted to this Act and its implementing regulations.
TITLE III MECHANISM DISENGAGEMENT
Art. 10 .- The mechanisms considered a divestiture is the sale of shares, asset sales, capital increases with waiver of the preferential rights of subscription of the State, directly or indirectly, issue of convertible bonds, the court or judicial liquidation, merger or demerger.
This list is not exhaustive, but in all cases, the leasing management is not considered a divestiture.
Art. 11 .- The public service concession following the dissolution of Public Establishments or abandonment by the state of the direct exercise of a public service activity under the jurisdiction of the Government on the initiative and with participation of the Ministry Technical Regulator.
PART IV WITHDRAWAL OF PRODUCTS
Art. 12 .- For the purposes of this Act, the products of the divestiture are net revenues obtained after full settlement of liabilities, payment of taxes on capital gains or other taxes, settlement of court costs, other expenses intermediation.
Art. 13 .- The products of the disengagement of the state on its direct holdings will be paid into a special account of the Treasury.
Art. 14 .- The products state of disengagement of Public Enterprises regarding its indirect interests remain the property of legal entities of public or private holders of securities.

5 TITLE V INSTITUTIONAL ORGANIZATION OF WITHDRAWAL
Art. 15 .- The Government is responsible for conducting the policy and implementation of the divestiture of Public Enterprises sector and public service activities.
To this end, the Government is assisted by a Technical Secretariat whose organization and operations are set by Order in Council of Government.

Art.16 .- The Technical Secretariat is also responsible for coordinating and monitoring the disengagement process.

TITLE VI INCOMPATIBILITIES Art. 17 .- In view of potential acquirers Public Enterprises, members of the private sector can not be part of any decision-making structure for the disengagement of the State that the Government could put in place.
Art. 18 .- Neither the members of the Technical Secretariat or their ascendants or descendants or their collateral or their spouse may not acquire assets or shares of Public Enterprises which the State disengages.
If they want to put in bids, they must resign their office from the beginning of the disengagement procedure of the State. TITLE VII DISPUTE

Art. 19 .- Any dispute arising directly or indirectly from the disengagement provided in this Act, State except with regard to the withdrawal from a legal proceeding is submitted to arbitration, with the exception of the courts repressive.
Art. 20 .- disengagement Acts must for this purpose include an arbitration clause. 6


PORTAGE TITLE VIII Art. 21 .- The payment by purchasers of asset prices or shares is done in cash.
However, national, natural or legal persons and employees of Public Enterprises which the State is withdrawing are eligible for up to 50% of the amounts payable, payment terms.
These deadlines and payment terms will be set by regulation.
Art. 22 .- The transfer of title can not be qu'auprès full payment of the assets. The proceeds of the operation and responsibility of the required assets for the benefit or expense of the purchaser from the physical transfer of assets.
Art. 23 .- The transfer of shares to the purchasers will make that as far as payment of the shares.
The dividends for the unpaid shares will be owned purchasers but they will not be paid before payment of such shares.
The rights of unpaid shares related votes are kept by the state to pay for such shares.
Art. 24 .- The porting management procedures defined in the preceding articles shall be determined by regulation.
TITLE IX MISCELLANEOUS PROVISIONS
Art. 25 .- The decrees lay down, as necessary, the procedures for implementing this Act.
Art. 26 .- All laws or regulations contrary to this Act are repealed laws including 96-011 and 96-012 of 13 August 1996 and their implementing regulations.
Art. 27 .- This Act applies upon its publication in any proceedings

7 disengagement of the State with the exception of the banking sector.
Art. 28 .- The Government shall as appropriate all necessary measures to prevent any acts preventing the normal functioning of the Public Company for which the State is withdrawing.
The Public Enterprises which the State is withdrawing must receive notice of the Government for any sale of fixed assets, any lease of assets to third parties, any short loan consent means or long term, and any loan other than that covering normal Treasurer needs.
Art. 29 .- Due to the urgency and in accordance with Article 4 of Ordinance No. 62-041 of 19 September 1962 on general provisions of internal law and private international law, this Act comes immediately force and will be published by all means including through broadcast or display, regardless of its inclusion in the Official Gazette of the Republic.
It shall be enforced as State law.
Antananarivo, December 23, 2003
THE PRESIDENT OF THE NATIONAL ASSEMBLY, THE PRESIDENT OF THE SENATE,
Lahiniriko Jean Rajemison Rakotomaharo 8