Банкеръ Weekly

Briefs

PRESIDENT PURVANOV GAINS POINTS AT THE EXPENSE OF PRIVATISATION

Never before have vaguer motives for imposing a veto been moved in, deputies comment wondering how they should revise the Privatisation and Post-privatisation Control Act next week. President Georgi Purvanov voiced his stance against the elimination of preferential shares, against the revocation of the 6-month term within which creditors can lay their claims to the enterprises to be privatized, and against the lifting of buyers' obligations in wartime and crisis situations. He also opposed the lack of a legal regulations for the rpivatisation of banks. This task (as until now) remains in the hands of the Bulgarian Consolidation Company's executives.Otherwise, most of President Purvanov's motives can be appraised as populism.The requirement for preferences to the small and medium-sized enterprise absolutely contradicts the spirit of the law. This is in fact reinstatement of the privileges for the management-employee buyout companies (MEBOs), but their names will be changed. The economic inefficiency of such a decison has already been experienced. Therefore, observers see in it a political motive - to win over the voters from the small business, who are at odds with the ruling circles due to the recent increase of patent taxes.The only somewhat reasonable motive is for keeping the 6-month term (beginning from the date of opening privatisation procedures) within which creditors should claim their receivables. If this provision is eliminated (as stipulated in the new law) investors might face the absurdity of huge debts emerging to the serface years after they have purchased a certain company, economists claim.Some observers believe that the veto, put by President Purvanov on the Privatisation and Post-privatisation Control Act, is a move of the Bulgarian Socialist Party, by which its seeks means to distance itself from teh ruling majority. Time will show if President Purvanov's motives are political or not.

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