Small shareholders are undesirable in Serbian companies and banks. They are no longer in AIK Bank, Sojaprotein, Veterinary Institute, Galenica, subsidiaries of Energoprojekt Holding, Imlek, Bambi, Cacanska banka, Valjaonici bakra, Jaffa, Umki, Avala and many other companies …
The last case that confirms that is Komercijalna banka. The current owner, Nova Ljubljanska banka (NLB), which is owned by the investment fund, wants to manage all 100 percent of the shares. This is clear from the recently published offer to take over the paper from small shareholders who own 16.77 percent of the capital. When the deadline for depositing shares ends on April 9, it will be known what percentage of ownership they added to the one bought from the state of 83.23 percent.
The majority owners do not become 100% shareholders of companies and banks only by “kindness”, but also by force. Because, when a company reaches 90 percent of ownership, according to the Law on Business Companies, it has the right to forcibly buy the remaining ten percent. This means that it is enough for NLB to sell its shares to 6.77 percent of shareholders, and they reach a 90 percent share when they can forcibly buy shares and acquire 100% ownership over Komercijalna Banka. The right of the majority owner to forcibly repurchase the shares of small shareholders is in accordance with the law.
An interesting example is the pharmaceutical factory “Galenika”, in which there were small shareholders, and the company itself was not listed on the stock exchange. Last summer, the new owner, the Brazilian company Aelius, forcibly bought 5.02 percent of the shares of small shareholders, which were distributed to current and former employees in 2008.
“No one had the right to take property by force. We have been waiting to go public to check the value, but the interests of corporate capital are obviously more important than ours,” states the former small shareholder of the drug factory.
Nenad Gujanicic, a broker at Momentum Securitis, says the current law is on the side of the majority owner.
“That best shows how much the rights of minority shareholders who are discriminated against on this issue are respected. The change in the law, which reduced the threshold for forced redemption of shares, was a key point that led to the current situation that the domestic stock market is on the brink of an abyss, with a rather limited chance of creating a somewhat normal market at any time. Companies have been moving out of the Belgrade Stock Exchange for years, and on the other hand, the stock exchange itself has failed to profile itself as a place where companies would raise capital, which is, after all, its purpose. So, the essential difference between the domestic and some regulated stock exchanges is the lack of interest here, neither of the state, which still controls a good part of the economy, nor of private entrepreneurs to list their companies,” believes Gujanicic.
In his opinion, more important than lowering the takeover threshold is the price at which the majority owners squeeze out the minority shareholders. In most cases, liquidity is faked on the stock exchange and payments at estimated or book value are avoided. These liquidity criteria are otherwise mitigated by the same law when the threshold for forced redemption was lowered from 95 to 90 percent.
And why don’t most business owners like the small ones?
“By forcible purchase, companies go into a lower form of organizational form, such as a limited liability company, which reduces their costs and obligations and simplifies the way they function. The same is the case with banks in terms of liabilities and costs, although they are more open given that they fall under the Banking Law. They remain JSCs, but they do not have to report all important events to the stock exchange and the Securities Commission, they do not have to officially publish the stock exchange prospectus and many other things,” our interlocutor answers.
The difference in the privatization of Komercijalna banka and NLB
The new Ljubljanska banka was privatized under pressure from the EU, as the Slovenian state “pumped” several billion euros to save the national banking system. This involuntary privatization was carried out through an initial offer of shares, and the Slovenian state retained 25 percent of the shares allowed by European regulators. A similar privatization program could have been implemented by our state, but it was never an option, considering that our economic policy makers are not too interested in the development of the stock exchange and the stock market, says Gujanicic, Politika reports.
