LEGISLATIVE CHAMBER CONSIDERS DRAFT LAWS TO IMPROVE CORPORATE GOVERNANCE

The Legislative Chamber of the Oliy Majlis of the Republic of Uzbekistan has held one of its regular sessions, where the deputies considered a number of draft laws aimed at further deepening of reforms in different spheres of society.

Members of parliament began their work with consideration of draft laws “On introducing amendments and addenda to the Law of the Republic of Uzbekistan “On joint-stock companies and protection of shareholders’ rights” and “On introducing amendments and addenda to some legislative acts of the Republic of Uzbekistan in connection with introduction of modern methods of corporate governance in joint stock companies”.

It was noted that the purpose of these normative-legal acts was to create favorable conditions for wide attraction of foreign direct investments to the economy, to improve the efficiency of joint-stock companies, to ensure their transparency, to introduce modern methods of corporate governance, to strengthen the role of shareholders in strategic management of enterprises. Specialists of relevant ministries and departments, representatives of joint-stock companies, shareholders, scientists, economists, lawyers and the public have actively participating in developing draft documents. Factions of political parties and the deputy group from the Ecological Movement of Uzbekistan discussed and worked out their positions by presenting suggestions and recommendations to the responsible committee, which have been considered in the preparation of draft laws for the second reading.

The session took place in a lively debate, which allowed thoroughly discuss the draft legal acts.

— Amendments and addenda to the Law “On joint-stock companies and protection of shareholders’ rights” provide for strengthening the protection of rights and interests of shareholders, especially minority shareholders, — said a member of the Committee on Budget and Economic Reforms Elder Tulyakov. — The clause on approval by the general meeting of shareholders, of a development strategy for the medium and long term allows all shareholders to have a say over the financial policy of the enterprise. Regular hearing of the report of the executive body and the supervisory council on the adopted measures to achieve the development strategy of the company will contribute to the openness and transparency of the company’s activities.

Participants of the meeting noted that currently many corporate enterprises, including joint ventures with foreign capital are organizing production process based on best practices of corporate governance. This allows to stimulate attraction of foreign investments to joint stock companies, to increase the role of shareholders, including minority shareholders in the management of the company.

— The significant innovation of the Law “On introducing amendments and addenda to some legislative acts of the Republic of Uzbekistan in connection with introduction of modern methods of corporate governance in joint stock companies” are the norms, defining the requirements for training and improving the professional skills of managerial staff on the basis of cooperation with leading foreign educational institutions, as well as attracting highly qualified foreign managers for management positions in joint-stock companies, — said member of the Committee on Budget and Economic Reforms Abdugani Umirov. — The draft legal act provides that the decision to appoint the head of the executive body is to be taken based on competitive recruitment, which is open to foreign managers as well. Extension of preferences for foreign investors is also envisaged in the document. For example, joint stock companies are exempted from paying the single social payment from the payroll of foreign workers involved as a managerial staff. Benefits on income tax for foreign experts, resulting from their activities as an administrative personnel are also included.

Following the discussion, deputies adopted the laws in the second reading.

Deputies also extensively discussed the draft law “On introducing amendments and addenda to some legislative acts in connection with the adoption of the Law “On stock exchanges and exchange activity” in new edition. It is aimed at further development of a financial sector, improving quality of market infrastructure.

UzA