August 31, 2023

On 14.08.2023 the Regulation on the activities of state representatives in enterprises with a state share was approved

The procedure for the participation of a representative of the state in general meetings of shareholders (participants) was determined.

On 14.08.2023, the Cabinet of Ministers adopted Resolution No. 373 “On measures to ensure the effective participation of state representatives in the management bodies of an enterprise with state participation”, which approved the Regulation on the activities of state representatives in enterprises with a state share. The Resolution will enter into force on 16.11.2023.

Preliminary coordination of the position on voting for a representative of the state with the relevant state body (State Assets Management Agency (SAMA), local authorities, and other specially authorized state bodies) is mandatory on the following issues on the agenda of the general meeting of shareholders (participants):

– reorganization or liquidation of the company;

– creation of subsidiaries and dependent enterprises;

– approval of the organizational structure;

– election, appointment, involvement of the executive body of the enterprise, and premature termination of its powers;

– determination of the maximum size of the declared shares;

– splitting and consolidation of shares;

– increase or decrease in the size of the authorized capital (authorized capital);

– transfer of property as collateral;

– conclusion of major transactions or transactions with affiliated persons of the enterprise;

– distribution of net profit and the direction of their part for dividends (agreed with the SAMA).

On other issues, the representative of the state makes a decision independently.

In the absence of a Supervisory Board at enterprises with a state share that has not been transferred to trust management, a power of attorney and instruction on the voting procedure on agenda items at the general meeting of shareholders (participants) must be issued to a representative of the state.