Changes to the legislation to improve the protection of the rights of minority shareholders introduced
Tashkent, Uzbekistan (UzDaily.com) – On 22 January, President of Uzbekistan Shavkat Mirziyoyev approved a law of the Republic of Uzbekistan “On Amendments and Additions to Some Legislative Acts of the Republic of Uzbekistan”.
One of the clauses of this law envisages amendments to Articles 84 and 88 of the Law “On Joint-Stock Companies and the Protection of Shareholders’ Rights” to increase the protection of the rights of minority investors, in particular, the conclusion of major transactions.
As previously reported by the Agency, the change from 24 March establishes the procedure according to which a decision to conclude a major transaction is made with the obligatory study of the terms of the transaction by an independent external audit organization, taking into account the market value of the property determined by the appraisal organization.
Also, the corresponding procedure will be applied for decision-making by the supervisory board on the conclusion of a transaction with an affiliate of the company, the amount of which is ten or more percent of the value of the company’s net assets.
It should be noted that until today, in practice, there have been repeated cases of assets being withdrawn from joint stock companies at a lower cost, which is determined by the carrying amount of the asset. Such actions were contrary to the legitimate interests of minority shareholders and adversely affect the investment climate and the country’s image in the international arena.
The adoption of the law contributes to further improvement of corporate governance in joint-stock companies, namely, it will increase the protection of the rights and legitimate interests of minority shareholders by further improving the legislation in the field of corporate governance and eliminating norms that do not meet modern development conditions.
The adoption of the law also helps to improve the position of Uzbekistan in the annual ranking of the World Bank Group and the Doing Business 2021 International Finance Corporation according to the indicator “Protection of minority investors”.
The Agency for Development of the Capital Market of the Republic of Uzbekistan reminds shareholders and investors of its readiness to protect their rights and legitimate interests, and also asks them to contact the Agency in cases of violation of their rights and interests for timely adoption by the Agency of the necessary measures