State Property Privatisation Policy and Company Management

The Ministry of Economy did a lot to analyse the legislation governing privatisation issues, drafting a number of government resolutions. To make the new regulations fully contribute to a more efficient process of privatisation and implementing the principles of transparency, clarity and openness, the Ministry closely cooperated with other state institutions when drafting legislation on general state property privatisation issues. In 2003, fourteen draft resolutions of the Lithuanian Government were drafted and submitted to the Government, of which nine were adopted, while the rest were adopted at the beginning of 2004. It should be noted that in 2003 the Regulations for Privatisation of Shares of Companies that Are Important Infrastructure or Dominating Entities in a Given Economy Sector were supplemented by listing electricity production and distribution companies that were founded after reorganisation of the special purpose company Lietuvos Energija and that should be subject to privatisation in line with these provisions. With regard to the purpose of privatisation of a given entity and circumstances of the process, the procedure for organising the tender was changed. The amended Regulations for Privatisation by Open and Direct Negotiated Procedure reduced the relative weighting of investments in the total result of tender evaluation when measuring the financial proposals of tender participants, allowing determination of the winning tender in a more objective manner. The Procedure for Preparation of Objects to Be Privatised for Privatisation set the dates for preparing privatisation programmes for the objects not included in the list of privatisation objects as they had not been established before. At the end of the year, draft amendments to the Government resolutions were presented regulating the methods of privatisation, proposing to set specific criteria for the reliability of potential buyers and the procedure for receiving and evaluating information or conclusions from relevant state institutions within their capacity and decision-making. The proposals were based on analysis of the issues related to the reliability criteria of potential buyers in the legislation governing privatisation, as well as on practical experience, and were intended for the implementation of the Lithuanian National Anti-Corruption Programme.

At the beginning of 2003, the Ministry represented the state in 14 active public and private limited liability companies, in one Russian private limited liability company with Lithuanian state capital, in 25 companies being liquidated or subject to bankruptcy proceedings, and carried out the functions of founder of nine state companies and one scientific institution as well as 36 public institutions. During the year shares of two public limited liability companies owned by the state were handed over to the State Property Fund, along with the functions of founder of the Russian private limited liability company Lietuvos Prekybos Namai ( Lithuanian Commerce Chamber ) and the public organisation Eiguliu Sporto Baz e ( Eiguliu Sports Facilities ).

The Ministry participated in 29 general meetings approving activity reports, annual financial statements of respective companies, profit distributions, decisions to increase the authorised capital of some companies and the selection of members of management bodies and audit companies. There were decisions made to reorganise by dividing two waste management companies in order to separate the management of hazardous waste from the management of utility waste as well as adoption of the terms of reorganisation. The decision was also made to liquidate the company Naftos Terminalas, and other issues falling within the capacity of a general meeting were solved.

In order to prevent possible employment and social problems in the city of Alytus resulting from the worsening economic situation of the company Alytaus Tekstile, the Ministry initiated the adoption of the Law on the Acquisition of Shares of Alytaus Tekstile Public Limited Liability Company . The law gave Lithuania the right to organise and invest state property to acquire the ordinary registered shares of Alytaus Tekstil e from natural and (or) private legal persons and set forth the terms of that investment.

The implementation of the Lithuanian Anti-Terrorism Programme resulted in the drafting of the Law Amending the Law on the Companies and Machinery of Strategic Importance to National Security and Other Companies Important in Ensuring National Security . A working group headed by the state secretary of the Ministry drafted the law. The draft law calls for supplementing the law with an article on the safety of companies and machinery of strategic importance to national security as well as other companies instrumental for ensuring national security, and urges the solving of practical issues related to application of the law.

In order to solve some of the problems of state property management the Ministry submitted for governmental consideration 34 Lithuanian Government draft resolutions.