President seeks better property management
Over 20% of state-controlled companies are bankrupt
Victor Yushchenko has sent his proposals on how to manage state property more efficiently to the government, Oleksandr Shlapak, Head of the Secretariat Department for Social and Economic Development, told a news conference on Thursday, according to the President`s press-office.
The President suggests amending legislation on joint stock companies and the national depository system, assessing last year’s performance of state-controlled companies and investigating each instance of the state losing its shares.
Mr. Shlapak said Mr. Yushchenko had to veto a law on joint stock companies, which stipulates that a quorum can be decreased from 60% to 50%, and also insisted that this issue be considered along with plans to protect minority shareholders.
The President suggests that the government assess last year’s performance of directors of state-owned companies, not extending their contracts if their work proves unsatisfactory. The government should also assess the performance of its representatives in supervisory boards of these companies, he added.
Mr. Yushchenko wants to find out why the government loses some of its companies. He demands that government representatives in supervisory boards and government ministers together decide to increase statutory funds of these companies.
Mr. Shlapak complained that problems in the state property sector “have been mounting in the past several years.”
He said inefficient performance of state-controlled companies was the biggest problem. He added that incomes of companies belonging to the State Property Fund had fallen by two times last year and salary debts and budget debts had grown by six times and 1.5 times, respectively.
He described the control over how state property is managed as "totally inefficient." Most of the restructured companies failed to achieve expected results and over 20% of state-controlled companies are bankrupt, he explained.
Mr. Yushchenko believes these problems are very serious and important, he said. Mr. Shlapak said the President “hopes we will stop the negative trends in cooperation with the government and work much better in this direction in 2007.”