New privatisation law — end of a years-long process
By Stefan Dobric
Privatisation in Serbia began in 2001, under the previous law, and 2,288 companies have been privatised to date. Numerous deficiencies of the law, which were somewhat to blame for the termination of as many as 684 contracts, have rendered efficient completion of the privatisation procedure for the remaining 584 companies impossible under the given models.
The new law came into force on 13 August 2014, and the deadline for privatisation of socially owned capital to be completed is 31 December 2015 — the ‘penalty’ if change of ownership over socially owned capital cannot be effected by then being bankruptcy or liquidation. Of course, it is highly unusual for a completely new law governing a specific area to be introduced towards the very end of the relevant process; the legislators are defending this precedent by arguing that an analysis of the privatisation subjects currently in the Privatization Agency’s portfolio has shown that only a new conceptual approach can ensure a transparent procedure with application of simple privatisation models under fair market conditions.
It seems that the current direction of legal protection is aimed, this time, at creditors of privatisation subjects, who were not focused on so far, so one of the primary goals of the new law is resolving the status of companies undergoing restructuring, and their creditors as well. Namely, for more than a decade creditors have been prohibited from enforcing their claims against companies undergoing restructuring, since their rights have been blocked. The new law rejects this category, removes this obstacle in the collection procedure and provides for privatisation of these companies through a new model based on the sale of property…
Click on the link below to read the rest of the JPM Jankovic Popovic Mitic briefing.
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News from JPM Jankovic Popovic Mitic
Briefings from JPM Jankovic Popovic Mitic
Burden of restitution of confiscated property is being transferred from the state to the investors.
After number of consultation rounds, the Draft Law on Investments was passed by the Serbian Parliament on 23 October.