OREANDA-NEWS. July 09, 2014. The amendments are meant to bring the Law on Joint Stock Companies into compliance with the new provisions of the Law on Capital Market.

The document is intended to modernize and improve the legislation in the field of corporate management, increase the protection of rights and interests of investors, ensure the effective regulation for activities of joint stock companies depending on their type, simplify procedures and requirements related to corporate activities of joint stock companies and to enhance transparency. The document introduces a definition of “a transaction with conflict of interest” and optimizes the procedure for their conclusion, classifies joint stock companies, depending on an order in which their securities are kept and traded, lifts some requirements with regard to internal corporate activities of the joint stock companies.

The amendments eliminate ambiguous interpretations in the current Law, complement it with aspects concerning the possibility of the National Commission on Financial Market to specify an order of disclosing information about transactions with the shares of the company by persons in positions of responsibility, an order of preparing for, convening and holding general meetings of shareholders, the procedure of issuing reorganization permits. The amendments include the requirement to hold general shareholders meeting on the territory of Moldova unless the Regulations or a decision of the general meeting stipulates otherwise. To hold the meetings beyond Moldova, the unanimous support by all the shareholders is required. This measure is expected to protect interests and rights of the shareholders that are not able to take part in the meetings held abroad.

The amendments also replenish the requirements as for reconvening general meetings and electing the Board of Association. They stipulate that shares of the Association are liable to compulsory registration in the State Register of Securities, kept by the National Commission on Financial Market. If the Association is authorized to keep the register of shareholders independently, it must obtain the registration association license according to the procedure established by the National Commission on Financial Market. To identify a price offered for shares held by a minor shareholder, the market value of net assets per share must be calculated by the auditing committee without inviting a third-party appraiser. As a result, the redemption costs will shrink.

It should be noted that the 2011-2014 Non-banking Financial Market Development Strategy indicated a number of problems affecting interests of the shareholders and impossible to be resolved in accordance with the Corporate Governance Code. These problems included insufficient protection of interests of the company owners, the lack of personal responsibility of members of the Administrative Board for the decisions, etc. The adoption of the amendments to the Law on Joint Stock Companies is expected to improve Moldova's position in the World Bank's Doing Business as for the investment protection.