Belarusbank and cheque privatization
In carrying out its activities of providing cheque circulation services, the Bank is guided by the legislation of the Republic of Belarus and acts as an agent on the respective transactions.
PROCEDURE OF CIRCULATION AND USE OF REGISTERED PRIVATIZATION PROPERTY CHEQUES (CHEKI "IMUSHCHESTVO")
The Decree No. 852 of the Council of Ministers of the Republic of Belarus "On Terms of Circulation of Registered Privatization Property Cheques" dated 29.06.2007 determines the term of their circulation until 30.06.2010.
Until that date citizens of the Republic of Belarus who own cheques can use them in accordance with Article 11 of the Law of the Republic of Belarus "On Registered Privatization Cheques of the Republic of Belarus", i.e. to:
- sell;
- transfer to a trustee;
- inherit and bequeath in the manner prescribed by the legislation of the Republic of Belarus;
- use to purchase state-owned assets subject to privatization (shares or interests in such assets).
When one chooses how to use the cheques, the person needs to visit the outlet of Belarusbank at the place where the registered privatization property cheques certificate was issued to carry out the transaction.
Once decided to exchange the cheques for corporate shares, you can have a look at the list of enterprises under privatization on the informational stand of Belarusbank's outlet and carry out the exchange operation. To carry out the exchange operation, the purchaser should produce the passport or another identity document and the property cheques certificate. The prospectuses which contain the detailed information about activities of these enterprises are also available at Belarusbank's informational stand.
The following property cheques are subject to exchange for shares:
- assigned to a citizen in accordance with Article 7 of the Law of the Republic of Belarus "On Registered Privatization Cheques of the Republic of Belarus" (personal property quota) and inherited;
- assigned to a citizen as a private property quota and used in accordance with Article 11 of the Law of the Republic of Belarus "On Registered Privatization Cheques of the Republic of Belarus" and then returned in the same amount to his special cheque account because of failed transactions, terminated contracts, liquidated companies including the cheques returned from specialized investment funds (SIF);
- received by the citizen from close relatives (parents, children, spouses, siblings, grandchildren, grandparents, parents-in-law), assigned to the above mentioned relatives as a private property quota, but in the amount of not more than 250 cheques in total during the whole period of gratuitous privatization. The cheques received are exchanged at the request of a citizen who has to specify who transferred the cheques without presenting the documents which prove the kinship relationship. If the citizen's request provides false information on property cheques, the transaction may be invalidated.
The Bank currently exchanges cheques for shares of approximately 160 joint stock companies. Shares are distributed between subdivisions of the Bank by the State Property Fund of the Ministry of Economy of the Republic of Belarus taking into account such criteria as the location of a joint stock company, the number of shares to be exchanged, the number of citizens who have received the property cheques certificates by region.
The legislation of the Republic of Belarus does not provide for the payment of money equivalent for the cheques unused during the property cheques circulation period. However, in accordance with Article 13 of the Law of the Republic of Belarus "On the Registered Privatization Cheques of the Republic of Belarus", upon expiration of the property cheques circulation period the cheques received as a private property quota and not used by the owner can be presented for payment and compensation. The procedure and dates for payment of compensation are determined by the Council of Ministers subject to approval by the President of the Republic of Belarus, and are not currently determined.
For more information on specific issues regarding property cheques, please contact consultants of Belarusbank's operational divisions.
For additional information on the cheque privatization process we offer the answers to the most typical questions asked by citizens about the exchange of property cheques for shares by the State Property Fund of the Ministry of Economy of the Republic of Belarus.
1. Is it possible to return property cheques which were previously exchanged for shares?
In accordance with the Law of the Republic of Belarus "On Registered Privatization Cheques of the Republic of Belarus" the purpose of property cheques is their exchange for the privatized public property (shares of joint stock companies). Citizens voluntarily used their registered privatization property cheques, having exchanged them for shares. The shares acquired are owned by them and now they are shareholders of the company, the shares of which they have purchased. The property cheques transferred to the privatization body's account in payment for shares are considered as have been used.
2. Is it possible to present as a gift or to sell the cheques acquired by citizens?
The current legislation sets restrictions for disposal (sale) of shares acquired during the privatization process.
The shares acquired by citizens in exchange for property cheques and for cash as well as received in exchange for the shares in the assets of collective (public) enterprises during their reorganization into joint stock companies cannot be disposed during the period of gratuitous privatization.
This restriction does not apply to:
- transfer of ownership rights in connection with the death of a shareholder of the respective legal entity or in connection with his departure for the permanent residence outside the Republic of Belarus;
- disposal of the above mentioned shares for the benefit of the Republic of Belarus or its administrative and territorial unit.
The decision on the purchase of the above mentioned shares is made by the President of the Republic of Belarus or by the local executive and administrative body, respectively.
3. What are the rights of a citizen who purchased the shares and became a shareholder?
In accordance with Article 11 of the Law of the Republic of Belarus "On Joint Stock Companies, Limited Liability Companies and Additional Liability Companies" a participant of the company has the right:
- to participate in the management of the company in the manner prescribed by the charter;
- manage of his shares in the manner and within the limits prescribed by the law and the charter;
- receive a share of the company's profit (if there is a profit and the stockholders' meeting decided to allocate part of the profit for payment of dividends to shareholders);
- receive part of the property in case of liquidation of the company;
- receive information about the company's activities as well as accounting and reporting data and other documentation in the manner prescribed by the charter.
The participant of the company may have other rights specified by the charter of the company.
All shareholders have equal rights, differences may only be based on the quantity and category of the company's shares they own.
Explanations as to the circulation of registered privatization property cheques - press release of the Ministry of the Economy of the Republic of Belarus.
The circulation of registered privatization property cheques means their indexation, reissuing, use in accordance with Articles 6,10 and 11 of the Law of the Republic of Belarus "On Registered Privatization Cheques of the Republic of Belarus" and the Regulation on the Circulation of Registered Privatization Property Cheques.
Prolongation of the circulation term of property cheques means the prolongation of the gratuitous privatization regarding the exchange of property cheques owned by the citizens of the Republic of Belarus for the shares of joint stock companies established during reorganization of state enterprises.
During the period of gratuitous privatization up to 50% of the shares of joint stock companies owned by the state and established during reorganization of state enterprises are exchanged in the prescribed manner for property cheques to:
- employees of joint stock companies and similar persons - on a priority basis within 5 months from the date of state registration of shares on the basis of the lists drawn up by the commission for the company's reorganization into a joint stock company;
- citizens of the Republic of Belarus - through structural units of Belarusbank in the prescribed manner;
- other subjects of privatization - through specialized cheque auctions.
The shares are exchanged for property cheques by the privatization body itself or its legal representatives acting on behalf of the privatization body. If property cheques are exchanged for the shares of a joint stock company through Belarusbank the joint stock company itself acts as a legal representative being represented by its top management / CEO.
The citizens of the Republic of Belarus may use property cheques owned in accordance with Article 11 of the Law of the Republic of Belarus "On Registered Privatization Cheques of the Republic of Belarus" (to sell, transfer to trustees, bequeath, inherit, exchange for state-owned shares). In some cases citizens transferred the cheques received under the deed of gift to close relatives who had the right to exchange cheques for the shares of a joint stock company as employees of this company established during reorganization of a state-owned enterprise. However, if property cheques were not subsequently exchanged and were returned to these persons under the deed of gift due to changes in legislation, they may also be used in accordance with Article 11 of the Law.
The following property cheques may be exchanged for shares through Belarusbank:
- assigned to a citizen in accordance with Article 7 of the Law of the Republic of Belarus "On Registered Privatization Cheques of the Republic of Belarus" (personal property quota) and inherited;
- assigned to a citizen as a personal property quota and used by him in accordance with Article 11 of the Law of the Republic of Belarus "On Registered Privatization Cheques of the Republic of Belarus" and then returned in the same amount to his special cheque account due to failed transactions, terminated contracts, liquidated companies, including cheques returned from specialized investment funds (SIF);
- received by a citizen from close relatives (parents, children, spouses, siblings, grandchildren, grandparents, parents-in-law), assigned to the relatives mentioned above as a personal property quota but in the total amount of not more than 250 cheques within the whole period of gratuitous privatization.
It is necessary to note that if during the liquidation of SIFs citizens were returned not only property cheques previously received by them as a private property quota, but also cheques received from close relatives and then exchanged for the shares of SIFs, such cheques may be returned to these relatives.
As of 01.07.2007 the shares of 157 joint stock companies for the sum of about 41 mln cheques were subject to exchange through Belarusbank. These were enterprises of building and construction materials industry, machine building and metal working, light and woodworking industry, transport sector.
From July 1, 2007 the exchange of property cheques for state-owned shares through Belarusbank is prolonged until June 30, 2010.
The shares acquired in exchange for property cheques during the process of gratuitous privatization, i.e. before July 1, 2010, cannot be disposed of, except for cases specified by the legislation.
