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Law No. 58 Of 14 August 1991 Concerning The Privatisation Of Companies

Original Language Title:  LEGE nr. 58 din 14 august 1991 privind privatizarea societăţilor comerciale

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LEGE No. 58 of 14 August 1991 on the privatisation of companies
ISSUER PARLIAMENT
Published in OFFICIAL MONITOR NO. 169 of 16 August 1991



The Romanian Parliament adopts this law In order to carry out the transfer of state property to the private sector, under the conditions of ensuring the distribution of the equivalent of 30% of the share capital of companies to the Romanian citizens entitled, the present law is adopted, which includes regulations on the sale of shares or assets of companies to natural or legal persons, Romanian or foreign. + Chapter 1 General provisions + Article 1 The law of privatization of companies establishes the legal framework corresponding to the transfer of state property into private property of individuals and legal entities. For this purpose, the law regulates: a) the procedure regarding the free distribution of property certificates to the entitled Romanian citizens; b) methods of privatization of companies; c) offer for sale of shares or assets of companies to their employees; d) participation of individuals and legal entities, Romanian or foreign, on sale-purchase of shares or assets of companies. + Article 2 The provisions of this law shall apply to limited liability companies, established in accordance with the provisions of Head. 3 3 of Law no. 15/1990 , as well as companies established by the association of companies with sole shareholder the Romanian state, under the terms of Law no. 31/1990, hereinafter referred to as commercial companies, and to autonomous kings that will transform, through Government decisions, into commercial companies. + Article 3 The privatization of companies is carried out by the free transfer of a part of the state's shares and by selling the remaining shares after the transfer, under the present law. Also, parts of the patrimony of some companies can be alienated in the direct form of the sale of assets, under the conditions provided by law. The free transfer takes place on the path of distribution of property certificates. Property certificates are shares in commercial companies of a financial nature, called Private Property Funds. Holders of property certificates have the right, under the conditions provided by law, to opt for: a) sale of property certificates; b) the change of ownership certificates in shares, on the basis of market conditions, to any commercial company to be privatized, at any time, within a period of no more than five years from the date of entry into force of this Law; c) the transformation of property certificates, remaining at the end of the five-year period, in shares in the Private Property Funds, after their organization in commercial companies of the type of mutual funds. The management and sale of the shares or shares held by the State shall be carried out through a public, commercial and financial institution, called the State Property Fund. The protection of holders of property certificates, employees and members of the management of companies, within the privatization process, as well as the conditions for participation of foreign investors, is carried out according to the laws. + Chapter 2 Establishment and organisation of Private Property Funds + Article 4 Five Funds of Private Property, stock companies, are established. The framework status of the Private Property Funds is proposed by the Government and approved by the Parliament. The status of each Private Property Fund will regulate the fund's rights and obligations and how to organize and operate it. + Article 5 The Private Property Funds initially hold, in total, 30% of the share capital of the companies organized according to the provisions Head. 3 3 of Law no. 15/1990 ,, with the exception of the share capital of the companies that are privatized under the conditions laid down by the head. 5 5 of this law. The distribution of 30% of the share capital of the companies between the five Private Property Funds will be carried out by the National Agency for Privatisation. + Article 6 Private Property Funds, as shareholders in companies, exercise in their relations with them all rights and obligations under the law. + Article 7 Private Property Funds meet the following main objectives: a) issue certificates of property under the conditions provided by law; b) aim to maximize the profits of the holders of the property certificates; c) examine and determine the modalities for the use of property certificates for obtaining shares of companies; d) provide brockerage services, in order to change the ownership certificates, which they have issued, in actions, based on market conditions; e) restructure the portfolio of shares and make new investments, in order to maximize the market value of the property certificates; f) initiates measures to accelerate the privatization of companies ' arondate companies, including by selling shares, regardless of whether they belong to the State Property Fund, and informs this fund on those measures. + Article 8 Each Private Property Fund will be run by a 7-member board of directors. The members of the first board of directors and the first censors of each fund will be proposed by the Government, recommended by the economic committees of the Assembly of Deputies and the Senate and approved by the two chambers, separately, for a five-year term. The members of the first board of directors and the first censors of each Private Property Fund will be chosen from persons with experience in the commercial, financial, legal or industrial fields. Members of the first board of directors and first censors of each Private Property Fund may be revoked by the authority that appointed them. A person can only be part of the board of directors of a single Private Property Fund and cannot be a member of a board of directors of any commercial company arondate to that fund. + Article 9 The Board of Directors of each Private Property Fund shall, among its members, elect a Chairperson and a Vice-Chair. + Article 10 Private Property Funds operate and make decisions on commercial principles, in compliance with the approved status of each fund. + Article 11 Each Private Property Fund uses the proceeds and profits made, in the proportions set by its board of directors, for the following purposes: a) distribution of dividends to holders of property certificates; b) deposits in interest-bearing accounts; c) cover all expenses necessary for the operation and any other commercial operations in connection with their object of activity. + Article 12 The Board of Directors of each Private Property Fund approves the annual activity report, which is published in the Official Gazette of Romania. The annual report will also include the measures taken by the Private Property Funds in order to accelerate the privatization process. The results of the work of each Private Property Fund will be brought to the public's attention and by means of mass information. + Article 13 The Board of Directors of each Private Property Fund approves the balance sheet and profit and loss account. + Article 14 The Private Property Funds will operate as commercial companies on shares, under the conditions provided by this Law and by Law no. 31/1990 31/1990 on companies, only for a period of five years from the date of entry into force of this Law. After the expiry of the period provided in 1, Private Property Funds are organized, by the effect of the law, in companies on common law actions, such as mutual funds. Persons who, at the date of organization of the companies referred to in 2, they still hold property certificates become shareholders of these companies. Property certificates are converted into shares in these companies and shareholders will decide on how to vote, which can be exercised directly, by proxy or by correspondence. + Article 15 Each Fund of Private Property issues, under the conditions provided by law, equally and free of charge, to all Romanian citizens, residing in Romania, who have reached 18 years until December 31, 1990, by a certificate of ownership, title of bearer value, with a nominal value determined by the ratio between the capital of each Private Property Fund and the number of citizens entitled to property certificates. The property certificates represent an individual participation of Romanian citizens in Private Property Funds. + Article 16 The list of Romanian citizens who have the right to receive property certificates is drawn up by the National Agency for Privatization, together with the prefectures and the City Hall of Bucharest, in collaboration with the Ministry of Interior. + Article 17 The National Agency for Privatization distributes property certificates with the support of local public administration bodies. The distribution of property certificates is carried out in compliance with the conditions established by the National Agency for Privatization, on the date and place announced by it in the Official Gazette of Romania and by means of mass information. + Article 18 Certificates of non-approved property within 180 days from the date announced by the National Agency for Privatization shall be cancelled by the Private Property Funds. + Article 19 Property certificates will be able to be negotiated on the stock exchange, under the conditions provided by the law on the organization and functioning of the stock exchange. + Article 20 Property certificates can be used for the change in shares of companies, in compliance with the procedures established by the board of directors of each Private Property Fund. + Article 21 Holders of property certificates have the following rights: a) receive annual dividends, which are paid under the conditions and data established by the Private Property Fund; b) to propose actions to improve the specific activity of each fund, to trigger financial control by censors or to request, motivated, the replacement of board members, provided that the proposals are appropriated by the holders of at least 10,000 property certificates; c) to buy shares of companies that are put into sale by the State Property Fund, within a limited period, prior to any public sale of shares, with a reduction of 10% compared to the price of the public offer, in a period of five years from the date of entry into force of the law, within the market value of the certificates held; d) obtain from the Private Property Funds brockerage services for the change of ownership certificates in shares, under market conditions, to any commercial company offered for privatization; e) any other rights provided by law for shareholders. + Article 22 Property certificates may not be alienated to individuals or foreign legal entities. + Chapter 3 Establishment and organization of the State Property Fund + Article 23 The State Property Fund, a public institution with legal personality, with a commercial and financial character, is established. + Article 24 The State Property Fund initially holds 70% of the share capital of the companies organized according to the provisions Head. 3 3 of Law no. 15/1990 ,, with the exception of the share capital of the companies that are privatized under the conditions laid down by the head. 5 5 of this law. + Article 25 The State Property Fund, as a shareholder, exercises with regard to companies all rights and obligations arising from this quality, according to the law. To this end, the State Property Fund has the following main obligations: a) take measures to reduce the state's participation in the share capital of companies, until their complete privatization; b) defines minimum performance criteria for the appreciation of companies, as well as the policy on the use of dividends due; c) take measures for the restructuring and rehabilitation of companies or, as the case may be, for the liquidation of unprofitable companies; d) participate in the implementation of the measures initiated by the Private Property Funds to accelerate the privatization process; e) meets, together with the Private Property Funds, the duties incumbent, according to the law, to the general meeting of shareholders. + Article 26 The State Property Fund operates and makes decisions based on commercial principles. The income of the State Property Fund will be used in the proportions established by the board of directors, for: a) depositing in interest-bearing accounts; b) making investments necessary for the restructuring, rehabilitation and profitability of companies, without increasing the proportion of state participation in their share capital; c) the granting of credits to individuals or legal entities, with private capital, novels, for the purchase of shares or assets of companies; d) financing of expenses related to the preparation and realization of privatization of companies e) any other commercial operations in connection with the object of activity of the State Property Fund. + Article 27 The State Property Fund, in the exercise of its duties according to the law, must: a) keep records, in compliance with the rules established for companies; b) to submit any disputes arising from its work towards the resolution of the competent courts; by commercial contracts concluded with foreign partners may agree that any disputes should be settled arbitrarily, in the country or abroad, or by the courts. The State Property Fund, for the entire work carried out, will not benefit from immunity from jurisdiction or enforcement. + Article 28 The State Property Fund is obliged to prepare annually a privatization program for the following year and a report on the activity carried out in the last 12 months. The programme will include proposals to privatise at least 10% of the shares originally held. The program and the activity report shall be presented to the Government, for information, and to the Parliament, The State Property Fund report and the profit and loss account shall be published in the Official Gazette of Romania, as well as in mass media. On the expiry of seven years from the start of the State Property Fund activity, based on the report presented to Parliament, it will decide, depending on the situation at that time, on the work of the State Property Fund and on procedures to be followed, with a view to managing the State's participation in companies + Article 29 The State Property Fund ceases, in law, its activity on the date of full realization of the privatization of companies with state capital. The asset held by the State Property Fund at the time of termination of the activity is made to the budget of the central state administration. The budget of the central state administration takes over the financial obligations of the State Property Fund from the date of termination of its activity. + Article 30 The State Property Fund will be run by a 17-member board of directors. The Management Board will consist of: a) 5 members appointed by the President of Romania between personalities with training and experience in the commercial, financial, legal or industrial field; b) 3 members appointed by the Permanent Bureau of the Senate; c) 3 members appointed by the Permanent Bureau of the Assembly; d) 5 members appointed by the Government between the governing bodies of the central bodies of the public administration; e) Secretary of State for privatization. + Article 31 The members of the board of directors will be appointed for a period of five years, and can be re-elected for one more term. Board members may be revoked by the authority that appointed them. The Board of Directors shall elect from among its members a Chairperson and a The secretary of state for privatization cannot occupy any of these functions. Board meetings will be conducted by the President or, in his absence, by the Vice President. + Article 32 The censors of the State Property Fund are called and revoked by the permanent offices of the two houses of the Parliament, at the proposal of the Ministry of Economy and Finance. + Article 33 The Organization and Functioning Regulation of the State Property Fund shall be drawn up by the Management Board and approved by the Government. + Article 34 The Management Board shall work in the presence of at least 12 of its members and shall take decisions valid with the vote of 3/4 of those present. + Article 35 The Board of Directors shall meet in meetings at least once a month. The Management Board may convene in extraordinary meetings by the President or at the request of at least 5 of its members. The meetings of the Management Board must be convened in writing, at least five days before the date fixed for their holding, and the convocation will be accompanied by the agenda. + Article 36 The Chairman of the Management Board shall carry out the decisions of the Management Board and shall, for that purpose, exercise the following main duties: a) sign or approve the conclusion of contracts by the State Property Fund, according to its object of activity; b) approve payment transactions and receipts on behalf of the State Property Fund; c) appoints and revokes the directors of the State Property Fund; d) employ and represent the State Property Fund in relations with individuals or legal entities, as well as before the jurisdictional courts; e) presents annually the privatization program, the revenue and expenditure budget, the activity report and the report on the implementation of the budget, prepared according to art. 28, for approval by the board. + Article 37 The current activity of the State Property Fund is led by an executive general manager, appointed by the chairman of the board, with the agreement of the board of directors. The Chairman of the Board may delegate to the Executive Director-General the right for him to hire and represent the State Property Fund in relations with individuals or legal persons as well as before the courts jurisdictional. The Executive Director-General shall operate under the control of the Chairman of the + Article 38 The State Property Fund, for the entire duration of activity, is exempt from the payment of corporate tax and is prohibited from any varsamint to the state central administration budget or to local budgets. + Chapter 4 Special provisions on general meetings and boards of companies + Article 39 The general meeting of the shareholders of the companies is represented by the representatives of the State Property Fund and the Private Property Fund to which the company is aronded. The state's attorney's councils will continue their work and represent the State Property Fund in the first general meeting of shareholders. The terms of appointment, revocation, resignation and remuneration of the representatives of the State Property Fund in the general meeting of the shareholders will be established by the organization and functioning regulation of the State Property Fund. + Article 40 The general meeting of shareholders appoints the board of directors, composed of 3-9 persons, of which one is the chairman of the board of directors and general manager or director of the company. The Private Property Fund has the right to appoint a number of members to the board of directors, in proportion to the share of capital held in that trading company. + Article 41 Art. 39 39 and art. 40 applies to companies as long as they have as shareholders only the State Property Fund and one or more of the Private Property Funds. + Chapter 5 Privatizations initiated before the organization of funds + Article 42 For the privatization of some companies by selling shares before the organization of the Private Property Funds and the State Property Fund, the National Agency for Privatization is empowered. The National Agency for Privatization, on the proposal of companies with state capital and on the basis of recommendations made by the relevant ministries, carries out the selection of companies for privatization, but not more than 0.5% of the total of the companies covered by this Law. + Article 43 The assessment of the share capital and the sale of shares of the companies before the organization of the funds is authorized by the councils of the state's If they buy shares put up for sale before the organization of funds, employees and members of the management of companies benefit from the rights provided in art. 48. + Article 44 Companies, which are privatized by selling shares before the organization of funds, can conclude specialized assistance contracts with Romanian or foreign companies, under conditions of competitiveness. The specialized assistance contract concluded with foreign companies is made with the agreement of the National Agency for Privatization. + Article 45 The amounts resulting from the sale of shares of companies before the organization of funds will be deposited in a interest-bearing account with the National Bank of Romania. Amounts provided in par. 1 70% return to the State Property Fund and 30% to the Private Property Funds, equally, on the date of their organization. + Chapter 6 Sale of shares of companies + Article 46 The shares of the companies owned by the Private Property Funds and the State Property Fund may be sold to individuals or legal entities, Romanian or foreign, by: a) offers of sale of shares to the public; b) sales of shares on the basis of open auction or auction with shortlisted participants; c) sales of shares through direct negotiation; d) any combination of the above procedures. + Article 47 Employees of companies and members of their management may participate in the purchase of shares through any of the procedures provided in art. 46. + Article 48 The shares of the companies put into sale by the State Property Fund, on the basis of the sale offer to the public or on the basis of auction, will be offered for purchase to the employees and members of the management of these companies, in preferential conditions as follows: a) in the case of a sale of shares by public offer, employees and members of the management have the right to buy, within a limited period, up to 10% of the shares put up for sale, with a reduction of 10% compared to the price of the public offer; b) in the case of a sale of shares by auction, any employee or member of the management, or an association of them will have the right to purchase the shares, in the situation in the book offer a price no more than 10% lower than the price higher offered in the tender and comply with the other conditions in the offer. On equal terms with other potential buyers, the shares of the companies put up for sale by direct negotiation by the State Property Fund will be attributed to the employees and members of the management of these companies. + Article 49 The State Property Fund may grant, under the conditions established by its board of directors and on commercial principles, facilities to employees and members of management, as well as pensioners, who buy shares of companies, as follows: a) credits; b) term payment; c) payment in installments; d) other facilities, taking into account the specifics of the actions and the concrete conditions for making the sale. + Article 50 The sale of shares by the State Property Fund shall be carried out in compliance with the procedures provided for in art. 46. The sale provided in par. 1 is carried out only with the approval of the National Agency for Privatization, if by sale the State Property Fund loses its status as a shareholder that has control within that commercial company. In order to obtain the approval, the State Property Fund has the obligation to submit, in writing, to the National Agency for Privatization, before the sale, the main conditions of sale. The National Agency for Privatization has the obligation to approve or, as the case may be, reject the proposal for sale within 30 days of its receipt. + Article 51 If individuals or legal entities, Romanian or foreign, will opt to buy 100% shares of a company, the State Property Fund will delegate to the Private Property Fund, to which the company is aronded, the right to negotiate, on his behalf, the conditions of sale. + Article 52 The conditions of organization and conduct of the sale of shares, the presentation of the proposals for sale, as well as the criteria on which the National Agency for Privatization will approve or, as the case may be, reject the proposals for sale will be established through methodological norms developed by the National Agency for Privatization and approved by Government decision. The methodological norms are published in the Official Gazette of Romania. + Chapter 7 Sale of companies ' assets + Article 53 Companies holding assets representing units that can be organised and operate independently have the right to sell such assets. + Article 54 Sale of assets provided in art. 53 shall be made on the basis of public auction or auction in the envelope, with the adjudication at the highest price. + Article 55 The sale of assets of companies on the basis of open auction or auction in envelope will be carried out in compliance with the legal provisions and methodological norms developed by the National Agency for Privatization and approved by decision of Government. The methodological norms are published in the Official Gazette of Romania. + Article 56 The National Agency for Privatization has the obligation to draw up, within 3 months, a list of assets of companies, which will be put up for sale in the first 12 months from the date of entry into force of this Law. + Article 57 On the purchase of assets of companies, individuals or legal entities, Romanian or foreign, may participate, according to the provisions of this law. Persons who buy assets, under the conditions of this law, will not have the right to sell them, to rent them or to transfer in any other way their use for a period of one year from the conclusion of the sale-purchase contract. + Article 58 Public institutions, autonomous regions and companies with sole shareholder the Romanian state do not have the right to participate in the purchase of assets provided in art. 53 53 of this law. + Article 59 At the sale of assets of companies, according to art. 54, have the right to participate and their employees, except for the members of the management of the selling companies, as well as the pensioners who had the last job at that company. If they offer equal terms of purchase with the other participants, the sale is made in favour of the employees, pensioners who had the last job at that company or of the Romanian citizens who have use these assets on the basis of management location contracts. + Article 60 The selling companies, with the approval of the National Agency for Privatization, Private Property Funds and the State Property Fund, under the conditions established by their boards, may grant facilities, on principles commercial, employees of the selling company and pensioners, if they buy assets, as follows: a) credits; b) term payment; c) payment in installments; d) other facilities, taking into account the specifics of the sold assets. + Article 61 The procedure for the sale of the assets of the company will be considered final on the date of conclusion, under the law, of the sale-purchase contract. + Article 62 The amounts resulting from the sale of the assets will be used by the company only for: a) making new investments; b) repayment of debts contracted from medium-and long-term loans for investments. + Chapter 8 The tasks of the National Agency for Privatisation + Article 63 The National Agency for Privatisation is the governmental body responsible for the coordination, guidance and control of the privatization process. + Article 64 The National Agency for Privatisation performs the following tasks: a) based on the framework statute, proposes for approval to the Government the statutes of Private Property Funds; b) publish in the Official Gazette of Romania the methodology for the distribution of property certificates; c) prepares the lists of Romanian citizens who have the right to receive property certificates; d) ensure the distribution of property certificates; e) establish the criteria for privatisation initiated before the funds are organised; f) approves the conclusion of specialized assistance contracts with foreign consulting firms; g) approves the sales of shares of the companies initiated before the organization of the funds; h) proposes for approval to the Government the methodological norms regarding the conditions of organization and conduct of sales of shares and assets; i) provide expert assistance to the companies involved in the privatization process; j) control the legality of legal acts concluded in application of this law; k) periodically edit an Newsletter; l) meets any other duties provided by law. In order to fulfill its duties, the National Agency for Privatization has the right to request data and information from the central and local bodies of the public administration, as well as from the companies. The central and local bodies of the public administration, as well as the companies, are obliged to respond to the requests of the National Agency for Privatization no later than 20 days. + Chapter 9 Sanctions + Article 65 It constitutes contravention to the rules on privatization of the following facts, if they are not enjoyed under such conditions, according to the criminal law, to constitute a crime: a) alienation by acts between the living of property certificates, in violation of the provisions of art. 22 22; b) the sale or transfer by natural persons or legal persons, Romanian or foreign, of the rights granted on the assets sold by the companies, before the expiry of the one-year period from the date of conclusion of the contract of sale-purchase; c) the conclusion of specialized assistance contracts with foreign companies for carrying out privatizations before the organization of funds, without the approval of the National Agency for Privatization; d) disclosure by employees of the National Agency for Privatization or of companies, as well as of any other persons with attributions in the privatization process, of any information not intended for advertising in connection with the sale of shares or assets of companies. + Article 66 The contraventions provided in art. 65 of this Law shall be sanctioned as follows: a) those of lit. a), b) and c), with a fine from 50 thousand lei to 100 thousand lei; b) the one provided in lett. d), with a fine from 150 thousand lei to 200 thousand lei. The penalty can also be applied to legal entities. + Article 67 The finding of contraventions and the application of sanctions shall be made by the authorized personnel of the National Agency for Privatization and financial control bodies. + Article 68 The contraventions provided by this law shall apply to the provisions of Law no 32/1968 on establishing and sanctioning contraventions. + Chapter 10 Final provisions + Article 69 The members of the boards of the Private Property Funds and the State Property Fund, their employees, as well as those of the National Agency for Privatization, as well as the members of the Government, dignitaries and parliamentarians of the country, involved in the application of this law, are required to declare their wealth at the beginning and at the end of their mandate or office + Article 70 The Private Property Funds and the State Property Fund may constitute, under the conditions provided by law, companies that have as their object of activity the promotion or acceleration of economic restructuring and privatization processes. + Article 71 The Private Property Funds and the State Property Fund have the right to contract, with individuals or legal entities, Romanian or foreign, specialized assistance services in the field of privatization and economic restructuring. + Article 72 Natural persons or foreign legal persons may participate, under the conditions provided by this law, to purchase operations of shares or assets of companies, without having the obligation to register, in advance, at the Agency Romanian for Development. If individuals or foreign legal entities buy shares or assets of companies, in compliance with this law, the Romanian Development Agency has the obligation to issue the investor certificate provided for in art. 24 24 of Law no. 35/1991 35/1991. + Article 73 Within 6 months from the date of entry into force of this Law, the Government will present the draft law on the organization and functioning of the stock exchange. + Article 74 The provisions of this law also apply to the sale of shares in limited liability companies. + Article 75 The share capital of companies, related to the shares issued under the conditions provided by art. 36 36 of Law no. 18/1991 on the land fund, shall be excluded from the mass of the capital subject to distribution to the Private Property Funds and the State Property Fund. + Article 76 For the purposes of this law, the members of the company management understand the representatives of the Private Property Funds and the State Property Fund in the general meetings of the shareholders, members of the boards and members steering committees or their assimilations. + Article 77 Repairs for goods taken over by the state improperly will be regulated by a special law. + Article 78 The premises of the Private Property Funds will be distributed in the territory according to the criteria for the arondation of companies at each fund. + Article 79 On the date of entry into force of this Law, art. 23 23 para. 2 2-8 of Law no. 15/1990 on the reorganisation of state economic units as autonomous kings and companies, and any other provisions to the contrary shall be repealed. This law was passed by the Senate at its July 31, 1991 meeting. p. SENATE PRESIDENT VASILE MOIS This law was adopted by the Assembly of Deputies at its meeting on July 31, 1991. p. PRESIDENT OF THE ASSEMBLY IONEL ROMAN Pursuant to art. 82 lit. m) of Decree-Law no. 92/1990 for the election of the Romanian Parliament and promulgam the Law on privatization of companies and we have its publication in the Official Gazette of Romania. ROMANIAN PRESIDENT ION ILIESCU ------------------