Republic of Lithuania Law On the Initial Privatization of State Proper

Republic of Lithuania Law On the Initial Privatization of State Property Chapter 1 General Provisions Article

The Objective of this Law
This law shall regulate the initial privatization of manufacturing industries, construction industry, transport, power engineering, commerce, consumer service and public catering establishments as well as institutions of culture,education, pharmacy, medicine and rehabilitation run on commercial basis, and of other stateowned property (hereinafter state-owned property subject to privatization shall be refferred to by the term "object of privatization").
The procedure and terms for the privatization of land and other natural resources, agriculture, forestry, communication establishments or their property, dwellings belonging to State and public housing funds shall be established by other laws of the Republic of Lithuania.
This law shall not regulate the restoration of property rights of natural persons whose property was nationalized, confiscated or otherwise taken into public sector against their will. Article 2.Further privatization of state enterprises under the Law on State Enterprise
Pursuant to the Laws on Initial Privatization of State- owned Property, state enterprise can be privatized only once. Enterprises can be further privatized under the Law on State Enterprise of the Republic of Lithuania only if they have already been privatized under the Law on the Initial Privatization of State-owned Property of the Republic of Lithuania.
Under the Law on State Enterprise, enterprises shall be sold to private owners only for Lithuanian currency (litas) or for any other convertible currency according to the established exchange rate if it is not otherwise provided by the laws of the Republic of Lithuania. Article
Information relating to privatization
During the period of privatization, special periodical publications -- information bulletins of privatization -- shall be issued.
Publishing procedure and periodicity of statewide and local government information bulletins of towns (districts) shall be established by the Government of the Republic of Lithuania.
When privatization of an object is being announced in relevant information bulletins, they must contain the following economic and technological data concerning the object of privatization: 1) type of business; 2) the amount and structure of authorised capital; 3) the amount of loan capital; 4) an enterprise's profitability over the preceding yearand the anticipated profitability in the coming year (a ratio between balance profit and business capital); 5) the proportion of imported machinery in the active fixed assets; 6) annual production volume (annual turnover), the proportion of goods produced (services rendered) for export; 7) the number of employees and the number of workers among them; 8) supply structure of basic materials and raw materials from the USSR and other foreign countries. On the decision of the Central Privatization Commission other information bearing upon the manner of privatization of an object shall be also included therein.
The list of all objects subject to privatization in the Republic of Lithuania and the programmes of privatization as well as data specified by this law must be published in advance in the national information bulletin. Chapter 2 Bodies of Privatization Article
The Structure of the Bodies of Privatization 1.The privatization of state-owned property shall be implemented by the Central Privatization Commission and by privatization commissions of towns and districts subordinate to it, on the basis of this and other laws of the Republic of Lithuania. Where the wording of this law is applied both to the Central Privatization Commission and to the privatization commissions of towns and districts, the term "privatization commissions" shall be used.
The Central Privatization Commission shall be appointed or dissolved by the Supreme Council of the Republic of Lithuania on the recommendation of the Prime Minister of the Republic of Lithuania. Privatization commissions of towns and districts shall be appointed by the Government (executive branch) of the Republic of Lithuania on the recommendation of the presidiums of the councils of local governments of higher level. On the recommendation of the Central Privatization Commission, a representative thereof may be appointed to these commissions. The procedure for the formation and functioning of these commissions shall be established by the Government (executive branch) of the Republic of Lithuania.
Privatization agencies shall be established under local governments of higher level. They shall be financed out of the resourses received by local governments of higher level through the privatization of state-owned property.
Privatization commissions and agencies shall be formed only for a specified period of time deemed necessary for the implementation of the objectives prescribed by this law. These commissions and agencies shall be dissolved on the decision of a body that has formed them. Article
The powers of privatization commissions
The powers of the Central Privatization Commission shall be specified by this law and by other legislative acts. Decisions adopted by the Central Privatization Commission shall be executed by those Ministries of the Republic of Lithuania under the supervision of which is an object of privatization, by privatization commissions of towns ( districts) and by privatization agencies of local governments as well as by administrative bodies of enterprises subject to privatization.
On the recommendation of a general meeting (conference) of employees of relevant Ministries of the Republic of Lithuania or of enterprises, the Central Privatization Commission shall approve privatization programmes of objects, with the exception of objects that are under the jurisdiction of local governments, as well as national privatization programme, and shall control the implementation of these programmes. Preparations for the privatization of objects that are under the Republic's jurisdiction shall be made by relevant Ministries of the Republic.
Privatization commissions of towns (districts), having coordinated the objects selected for privatization with the Central Privatizaton Commission, shall work out privatization programmes of objects that are under the jurisdiction of local governments, and in conjunction with the councils of local governments shall control how these programmes are being implemented.
Privatization commissions of towns (districts) shall have the right to give directions concerning the issues of privatization to those departments of the boards of local governments under the jurisdiction of which is the object subject to privatization, as well as to agencies and administrative bodies of enterprises under privatization which are under the jurisdiction of local governments.
Relevant privatization commissions or authorised by them administrative bodies of enterprises subject to privatization shall issue certificate of ownership to persons who have aquired the object under privatization (shares), after the result of the auction or of the subscription for shares have been affirmed according to the procedure established by this law. 6.In addition to powers provided by this law, a relevant privatizaton commission shall have the right : 1) in cases specified by this law to discount the object under privatization ( to reduce its intitial selling price), if the shares have not been subscribed for or if the object was not sold in the repeated auction. This provision shall not apply to the selling of objects designated as cultural heritage; 2) to compel an enterprise to purchase wholly or in part the state capital which it has available; 3) to sell out the shares of an enterprise which the bodies of the state power and government have available pursuant to the rules established by this law. Article
Rights and duties of privatization agencies
In their activities privatization agencies shall be guided by laws of the Republic of Lithuania, by the decrees of the Supreme Council and the Government (executive branch), and by the directives of relevant privatization commissions.
Privatization agencies shall accumulate information on the objects subject to privatization in towns (districts) and in the Republic in general, shall organize auctions and the subscription for shares, and shall arrange privatization documents. After an auction was held or after the shares were subscribed for, a privatization agency shall within five days furnish relevant documents to a local government and to an enterprise under privatization, as well as to a relevant privatization commission that affirms the results of an auction or of the subscription for shares. Results pertaining to the objects which are under the jurisdiction of local governments, shall be approved by the privatization commission of towns (districts), whereas the results pertaining to other objects shall be affirmed by the Central Privatization Commission.
Privatization agencies must enable each person enjoying the right to purchase an object (shares) under privatization, to get aquainted with the general list of objects under privatization in the Republic and with the list of objects under privatization in towns (districts ) as well as with their initial selling (subscription for shares) price, economic condition and programmes of privatization.
Appeals against the unlawful actions of privatization agencies may be filed with a privatization commission of town (district) within 10 days after the violation was uncovered but not later than within 20 days from the date the violation was committed. A privatization commission must consider the appeal within 7 days, and within 3 days it must notify the appellant about its decision. If the appelant is not satisfied with the decision, he may file within 10 days an appeal against such decision with the Central Privatization Commission. None of the provisions of this part shall be applied when criminal or administrative actions are instituted against guilty persons.
Upon the termination of privatization agencies , their employees shall have the right to get a job at a previous place of employment or they shall be employed at state ( local government) institutions and organizations, with the exception of cases when a privatization agency was dissolved or when its separate employees were dismissed from posts for the improper performance of their duties or violation of law. Chapter 3 Objects and Subjects of Privatization Article
Object of Privatization
An object of privatization means enterprise, institution, building or any other state-owned property drawn into privatization programmes. The following objects shall not be liable for privatization : 1) an enterprise that was not re-registered in accordance with the laws of the Republic of Lithuania regulating the activities of enterprises; 2) separate fixed assets (active assets) of an operating enterprise, with the exception of those fixed assets the list thereof shall be established by the Government (executive branch) of the Republic of Lithuania; 3) the property of the citizens of the Republic of Lithuania which was nationalised, confiscated or otherwise against their will transferred to the ownership of the state without awarding a compensation, and which may be returned to its owners or persons to whom the ownership has been transferred; 4) the state-owned property that was not re-appraised in accordance with the rules established by the Government (executive branch) of the Republic of Lithuania.
The list of objects under privatization sold only for convertible currency, shall be approved by the Supreme Council on the recommendation of the Government (executive branch) of the Republic of Lithuania.
Pursuant to the decrees of the Government (executive branch ) of the Republic of Lithuania as well as directives, adopted by local governments of the higher level on the basis of these decrees, also other objects that are under the jurisdiction of the Government or local governments may be designated as not liable for privatization. It may also be established that certain enterprises can operate only as state enterprises.
Objects of culture and education can be drawn into privatization programmes only upon the approval of the Ministry of Culture and Education of the Republic of Lithuania; objects of nature protected by the state,as well as sites can be included in privatization programmes only upon the approval of the Department of Environmental Protection of the Republic of Lithuania, after the list of said objects has been approved by the Government (executive branch) of the Republic of Lithuania. Pharmaceutical amd medical institutions can be drawn into privatization programmes only upon the approval of the Ministry of Health of the Republic of Lithuania, transport enterprises -- upon the approval of the Ministry of Transport, objects of energy -- upon the approval of the Ministry of Energy. Objects of landscape, urbiculture, architecture, archeology, history and art, built (or created) before 1940, as well as other objects which, according to the established procedure, have been designated as protected by the state, can be drawn into privatization programmes and appraised only upon the approval of the Cultural Heritage Inspectorate of the Republic of Lithuania and the Department of Environmental Protection.
Protection and maintenance contracts shall be concluded with persons who shall acquire objects of privatization which according to the procedure established by law have been designated as objects of cultural heritage.
Objects must be prepared for privatization by administrative bodies of enterprises and institutions, their founders, or by other bodies of state power and government under the jurisdiction of which is the object subject to privatization.The following documents must be prepared for objects under privatization: 1) certificate of property re-appraisal drawn up in accordance with the rules established by the Government of the Republic of Lithuania; 2) certificate issued by the board of an enterprise, testifying to the authorised capital of a state enterprise ( state joint-stock enterprise) and its structure, as well as justifying the formation of share capital; 3) other information bearing upon the objects under privatization specified by this law.
Monopolistic enterprise the goods and services of which supplied for national or local market account for more than 50 percent of this market output, when being privatized must be subdivided into separate objects of privatization (if it is possible from the technical point of view). If an enterprise cannot be subdivided, the procedure for its privatization shall be established by the Central Privatization Commission.
A board, council of observers, or general meeting (conference) of an enterprise that is not liable for privatization, shall have the right to recommend to a relevant privatization commission to privatize the said enterprise. A privatization commission must within 2 months make a decision and notify the said enterprise thereof. Article
Re-appraisal of Objects Subject to Privatization
The object under privatization shall be re-appraised (the residual value shall be re-appraised ) by the inventorying commission formed in accordance with the procedure established by the Ministry of Finance of the Republic of Lithuania. The act of property re-appraisal ( the amount of authorised capital ) shall be signed by the managing director of an enterprise (institution),chief accountant (book-keeper), chairman of the board of observers (auditing commission) and representative of an inventorying commission, and it shall be approved by the founder. If an object under privatization has no administrative bodies, its re-appraisal act shall be signed and approved by persons authorized by the body of state power and government under whose juridiction is an object of privatization. An object of privatization shall be re-appraised (the amount of its authorized capital shall be reassessed ) in accordance with the procedure established by the Government (executive branch) of the Republic of Lithuania and the regulations established in advance.
The price of objects designated as cultural heritage,that is assessed on the basis of its residual value, may be increased by the group of experts appointed by the Government of the Republic of Lithuania on the recommendation of the Cultural Heritage Inspectorate of the Republic of Lithuania.
The initial price (the amount of authorized capital) of objects of privatization which are included in a special list and shall be sold only for freely convertible currency pursuant to the procedure established by this law, may be increased by the Central Privatization Commission on the basis of the conclusions submitted by the commission of experts formed by the Government of the Republic of Lithuania.
After an enterprise has been privatized under this law, the amount of state-owned capital cannot be re-assessed or otherwise adjusted by changing property value of this enterprise.
The Ministry of Finance of the Republic of Lithuania shall have the right to compel to repeat stock-taking of an enterprise and readjustment of the amount of its authorised capital. Article 9.Persons Enjoying the Right to Acquire Property Subject to Privatization 1*.Objects of privatization (shares ) may be acquired by the citizens of the Republic of Lithuania. This provision shall not apply in acquiring appartments that belong to state and public housing funds.
Legal persons cannot acquire objects of privatization (shares) for roubles.
Natural and legal persons of the Lithuanian and of other states shall have the right to acquire for freely convertible currency objects of privatization (shares) included in a special list approved by the Supreme Council of the Republic of Lithuania.
Objects of privatization (shares) cannot be acquired by the institutions of sate power and government, state enterprises and state joint-stock companies, enterprises, institutions and organizations financed out the budget of the Republic of Lithuania or of local government budgets. Article
Representation A natural person ( a group of them) shall have the right to authorize another person by the notarised authorization who would represent him at auctions or subscriptions for shares and would perform appropriate legal actions. Members of boards of local governments, officers of ministries or other state (local government) institutions, employees of privatization agencies, members of privatization commissions, as well as members of the board and of the observers council of an enterprise under privatization, manager of its administration and chief accountant (book-keeper) cannot act as authorised persons if the authorization is related with the privatization of this enterprise. Representation relations shall be regulated by the civil code of the Republic of Lithuania. Chapter 4 Payments for the Purchased Object of Privatization Article 11.Means of and Procedure for payment in purchasing an object of privatization
Objects of privatization shall be sold for investment vouchers allocated by the state in accordance with the procedure set forth in Article 12 of this law, for money valid in the Republic of Lithuania or for freely convertible currency as well as for supplementary compensations earmarked for special purpose and allocated pursuant to other laws of the Republic of Lithuania.
Every person who under Article 9 of this law is entitled to the right to acquire state-owned property subject to privatization, for the acquisition thereof shall be permitted to use money (roubles). Their quotas shall be determined by the resolution of the Supreme Council of the Republic of Lithuania "On the Comming into Force of the Law on Initial Privatization of State-owned Property". A person may delegate this right only to his spouse, parents, children, brothers or sisters. Sums of money expended by the tenants for the acquisition of appartments belonging to state or public housing funds shall not be included into the fixed money quotas. If a person has deliberatly violated money quota determined for investment, unlawfully invested sum of money shall be recovered according to the procedure established by law and payed into the state Budget of the Republic of Lithuania. The Central Privatization Commission shall approve the list of objects of privatization which shall be sold without applying money (rouble) quotas. In this list can be included only those objects of privatization which remained unsold according to the procedure established by this law.
If an object of privatization is being purchased according to the procedure established by this law for freely convertible currency, money quotas shall not be applied.
An object of privatization (shares) may be sold by installments according to the procedure established by the Ministry of Finance, applying lower rate of interest.
For persons who have been allocated one-time investment vouchers or other compensations,shall be opened investment accounts with a bank, where sums of one-time allocations and of other supplementary compensations payed in accordance with the laws of the Republic of Lithuania, shall be deposited. Money (roubles) utilized for investment according to the fixed quotas, shall be placed to the same investment accounts. Sums of money (roubles) held in the investment account, which have not been expended on the acquisition of an object of privatization (shares), shall be transferred to the current accounts of persons who have deposited them.
The regulations governing the management of investment accounts and payments for the acquisition of an object of privatization, shall be established by the Ministry of Finance of the Republic of Lithuania and the Bank of Lithuania. Article 12.Terms and procedure for the allocation of one- time investment vouchers and agrarian compensations. 1.* One-time investment vouchers shall account for 2/3 of the value of property subject to privatization. 2/3 of the value of the total state-owned property ( with the exception of land) shall be privatized. The one-time investment vouchers shall be allocated to all the citizens of the Republic of Lithuania in the following portions: 1) for persons who on the 31st of December,1991 were 35 years of age--5 portions; 2) for persons who on the 31st of December, 1991 were 30 years of age--4portions; 3) for persons who on the 31st of December, 1991 were 25 years of age--3 portions; 4) for persons who on the 31st of December were 18 years of age--2 portions; 5) for persons who on the 31st of December, 1991 were under 18 years of age--1 portion. If one of the parents of a person was dead by the 31st of December, 1991, the said person shall be allocated the investment voucher under subparagraph 3, and if both parents were dead, he shall be allocated an investment voucher under subparagraph 1 of this paragraph; 6) the invalids of Group 1 and 2, regardless of their age, shall be allocated investment vouchers under subparagraph 1 of this paragraph. One-time investment vouchers shall not be allocated to : 1) persons found to have repeatedly committed serious crimes; 2) wards of the state found legally incapable and having no guardians. A monetary expression of one portion of a one-time allocation shall be computed and approved by the Government (executive branch ) of the Republic of Lithuania under the provisions set forth hereby.
Having taken into consideration the difference between the average wages of persons employed in national economy and of persons employed in agriculture , persons who were employed in agriculural sector after 1944 as well as persons who are employed in agriculture at the present moment, pursuant to the appropriate laws of the Republic of Lithuania shall be allocated additional agrarian compensations (agrarian vouchers).
A person who has been allocated a one-time investment voucher or other compensation, can transfer it only to his spouse, parents, children, brothers or sisters, by depositing these funds into their investment accounts. These allocations or compensations shall be inheritted according to the general procedure.
The procedure for the allocation of one-time investment vouchers shall be established by the Government (executive branch) of the Republic of Lithuania. Article 13.The utilization of one-time allocations or compensations earmarked for a special purpose
One-time allocations or other compensations shall be utilized only for the acquisition of objects of privatization (or shares), if the laws of the Republic of Lithuania do not provide otherwise.
A person upon acquisition of an object of privatization (or shares) for a one-time investment voucher, must pay in cash for 5 percent of the value of the acquired property. 3.The Government of the Republic of Lithuania shall fix the term for the utilization of one-time allocations or other compensations for acquiring an object of privatization (or shares) and shall make it available to the public no less than 3 months before the end of the term. Within this period the funds of one-time allocations and other compensations which had not been utilized by the citizens, shall be converted into terminable government (local government ) registered bonds according to the procedure and rate established by the Government of the Republic of Lithuania if the laws of the Republic of Lithuania do not provide otherwise. The Government (local government) shall repay the bond on maturity and on demand of a bondholder or his heir.
A holder of shares or of registered government (local government) bonds acquired for one-time allocations or other compensations shall have no right to sell or otherwise transfer them to the ownership of other person prior to July 1, 1992, with the exception of their conveyance to his spouse, parents, children, brothers or sisters. Such shareholders may be payed thedividends in cash only on and after January 1, 1992, if the laws of the Republic of Lithuania do not provide otherwise. Chapter 5 The Sale of Objects of Privatization Article
Methods of Initial Privatization
By virtue of this law the state-owned property shall be privatized by: 1) selling the objects subject to privatization at auctions; 2) announcing public subscription for shares.
An object of privatization (or shares) shall be sold to a natural person by the right of private property, to a group of natural persons by the right of common shared property or to spouses by theright of common joint property.
An object of privatization the initial selling price of which exceeds 500 000 roubles shall be sold only by announcing public subscription for shares. This provision shall not apply to objects sold for freely convertable currency. The sum of nominal values of issued bonds must be equal to the amount of state-owned capital (or to its portion subject to privatization) of the object under privatization computed according to the regulations established by the Government of the Republic of Lithuania.
State joint-stock and state enterprises possessing share capital shall be privatized only by announcing public subscription for shares.
If a functioning enterprise is being privatized in whole, i.e. not divided into separate objects of privatization, the natural persons who have acquired it as well as enterprises founded by them, shall take over all rights and obligations of the acquired enterprise. If the functioning enterprise is being privatized by splitting it into separate objects of privatization which may function as separate enterprises, the rights and obligations of an enterprise under privatization shall be distributed among the owners of privatized objects according to the regulations established by the Government of the Republic of Lithuania. The Government shall be entitled to repay the whole or a portion of the loans of an enterprise under privatization.
Shares of an enterprise hold by state power and government bodies, shall be sold only by announcing a public subscription for shares in the manner set forth by this law. If such shares are sold in 1991, a special permission issued by the relevant privatization commission must be obtained.
The state-owned property of a liquidated enterprise can be sold only at auctions according to the regulations provided for in Article 16 of this law.Article
The Utilization of Funds Received through the Selling of Objects of Privatization
Receipts for sold objects of privatization (or shares) shall be accumulated in privatization funds of the Republic and of local governments of the higher levels.
The privatization fund of the Republic shall be formed from the moneys received for sold objects of privatization (or shares) that are under the jurisdiction of the Government of the Republic of Lithuania and from the 70 percent of the funds received through the privatization of objects that are under the jurisdiction of local governments.
30 percent of moneys received through the privatization of objects (or shares) that are under the jurisdiction of local governments, shall be accumulated in the privatization funds of local governments of the higher level.
The funds of one-time allocations or other compensations used for the acquisition of state-owned property, shall not be transferred to the privatization funds.
the procedure for the utilization of privatization funds shall be established by the Supreme Council of the Republic of Lithuania. Article
The Procedure for Organizing Auctions
Auctions shall be organised by the agencies of privatization of local governments.Not later than 20 days before the auction is held, privatization agencies must provide in the information bulletins of privatization the following data: 1) the name of an object under privatization ( full name of an enterprise,its address); 2) time and location of an auction; 3) address, telephone number and business hours of an agencyfor organizing auctions; 4) economic and technological data specified in Article 3 of this law.The statewide privatization bulletin must contain data provided for in subparagrapgs 1 and 3 of this paragraph.
To take part in an auction may solvent natural persons who have been registered according to the procedure established in advance or groups of persons possessing a notarized foundation agreement of a group. The agreement concluded by a group of natural persons must contain the following data: 1) full names and addresses of the members of the group; 2) the amount of planned investment (installment) of the members of the group, their other duties and powers; 3) a representative of a group and his authorisation to take part in an auction; 4) the terms and procedure for the utilization of the property acquired at an auction. The property acquired by a group of natural persons shall belong by the right of partial ownership to the persons who have concluded an agreement.
An auction may be held if no less than two participants have been registered. Participants of an auction must register themselves at the agency for organizing an auction not later than 7 days before the auction and must pay 5 percent of the initial price of the object they wish to acquire to the account indicated by the agency as well as registration fee of 50 roubles.
Within 5 days after the auction, the purchaser must pay the difference between the price set at the auction (or its obligatory installment if the object is being purchased by installments) and the initial investment. If a purchaser fails to settle accounts when due, the auction shall be considered not to have taken place and the initial investment shall not be refunded.
Pursuant to the regulations established by the Ministry of Finance of the Republic of Lithuania, a natural person may acquire the object under privatization sold at an auction by installments. In this case, the purchaser within the term indicated in paragraph 4 of this Article must pay no less than 60 percent of the price of the object including one-time allocations or other compensations. The Central Privatization Commission shall be entitled to increase this percentage.
If the initial price at an auction has not been raised by at least 5 percent, the contract shall be considered not to have been concluded.
If the participants of the auction have not acquired the object of privatization, their initial investment shall be refunded within 7 days after the date of the auction. Article 17.Privatization of State Enterprises by Announcing Public subscription for Shares
The public subscription for shares shall be announced and conducted by privatization agencies of local governments on whose territory the object under privatization is located.
State enterprises and state joint-stock enterprises which have no private share capital formed from the investments of natural persons or private enterprises, or if it accounts for no more than 20 percent of their authorised capital, shall be privatized by issuing shares. Nominal value of shares planned to be issued must account for 25 percent of the authorised capital of an enterprise under privatization. The Central privatization Commission is entitled to change the said percentage (degree of privatization).
State joint-stock companies in which private share capital accounts for no more than 20 percent of the authorised capital , must be drawn into privatization programmes. The percentage of privatized capital shall be determined by the managing bodies of a company. They shall have no right to determine that less than 30 percent of the state capital held by an enterprise should be privatized, and that the part of state capital under privatization together with its private capital formed previously (by other means) should account for less than 50 percent of the total authorised capital of an enterprise. 4.When privatizing state capital under this law, only ordinary registered shares can be issued. The sum of nominal values of issued shares must be equal to the state capital planned to be privatized.
If only part of the state capital of an enterprise has been privatized, the amount of the remaining state capital must be equal to the difference between the state capital of an enterprise computed under the rules established by the Government of the Republic of Lithuania and the total nominal value of all shares issued (sold) by an enterprise.
An enterprise under privatization cannot issue more shares than it was established under the determined degree of its privatization. If more shares have been subscribed for than it was determined, and if pursuant to paragraph 3 of Article 18 of this law the subscription for shares is considered to have been made, the initial investment must be refunded for persons who subscribed for shares last. Article
Subscription for Shares
Subscription for shares and terms for the acquisition of shares shall be given public notice by privatization agencies of local government not later than 15 days before the subscription for shares begins . While announcing subscription for shares or terms for the acquisition of shares, the following data should be included in information bulletins of privatization : 1) the name and address of an enterprise (object); 2) the authorized capital of an enterprise, the number of shares planned to be issued and their par value; 3) the initial subscription price ; 4) the place, beginning and completion oft he subscription for shares according to different stages; 5) the economic condition and technical data of an object of privatization provided for in Article 3 of this Law. The data set forth in subparagraphs 1-4 of this paragraph, shall be published in statewide information bulletins of privatization.
Subscription for shares shall be an agreement between the state (local government), represented by privatization agencies and the natural person or their group, or, in cases provided for by this Law, the legal person. By this agreement one party shall bind itself to supply with a certain number of shares, and the other party shall bind itself to pay full issuance price of the of subscribed shares. The agreement shall be considered to have been concluded if more than 80 percent of shares planned to be issued have been subscribed for and the subscription for shares has been approved by the relevant privatization comission.
Subscription for shares shall be made in several stages. During the first stage which lasts for 30 days, shares shall be subscribed for at their initial price fixed by a privatization agency.The initial price for subscription for shares shall be higher than their par value. If more than 80 but not more than 110 percent of shares planned to be issued have been subscribed for at their initial subscription price,the subscription for shares shall be considered to have been made. In this case the issuance price of shares shall be equal to the initial subscription price.
If more than 110 percent of planned to be issued shares have been subscribed for at their initial price, a new subscription for shares shall be announced at the initial price increased by not less than 10 percent. In this case every person who has subscribed for shares shall have the right to demand that his payment would be refunded without any deductions.
If not more than 80 percent of shares planned to be issued are subscribed for during the first stage of subscription , then their initial price shall be reduced by 10 percent during the subsequent stages of subscription but not more frequently than every 10 days, until more than 80 percent of shares planned to be issued are subscribed for.
Having reduced the price of shares, persons who have subscribed for them earlier at a higher price, must pay such price at which the last share of an enterprise has been subscribed for. Such price shall be deemed as issuance price of shares. Issuance price of shares cannot be lower than their par value.
A person shall have the right to refuse shares until announced time limit for subscription for shares has not expired. In this case he shall be refunded the sum he payed for the shares, having deducted from it 2.5 percent of the par value of the subscribed shares into the state budget.
If not more than 80 percent of shares are subscribed for at their par value, it is considered that the subscription for shares have not been made, and the information bulletins of privatization shall inform about this. In this case a relevant privatization commission shall devalue the state property held by an enterprise and not later than within 10 days shall announce a new subscription for shares or shall adopt a decision to refund initial payments to persons not later than within 7 days after the time limit for the subscription for shares has expired .
Upon subscribing for shares, not less than 25 percent of par value of shares must be payed immediately to the bank account indicated by the privatization agency. Not less than 5 percent of this sum must be payed in cash. If the relevant privatization commission has affirmed the subscription for shares, the persons who have acquired them must pay within 30 days the total issuance price of shares. If the shares are being purchased by installments, the persons who have acquired them must pay the total issuance price of shares in two years period.
If shares have not been payed for when due, on the decision of a relevant privatization commission the subscribed shares may be annulled and the initial payment may be transferred to the relevant fund of privatization. When after the shares have been annulled not more than 80 percent of subscribed shares remain, public subscription for the annulled shares must be announced. Claims against the decisions bearing upon the annulment of shares can be filed within 10 days with the Central Privatization Commission.
The subscription agreement submitted by the privatization agency shall contain the following information : 1) the name and address of an enterprise (or object); 2) the number and date of the decree adopted by a relevant privatization commission regarding the privatization of an enterprise (or object), the amount of private capital planned to be accumulated and the amount of the remaining state capital; 3) subscription price; 4) full name and address of a subscriber; 5) the number of subscribed shares.
Having affirmed the subcription for shares and having payed their total issuance price, except in the case when shares are purchased by installments, accumulated share capital (its increase) as well as state capital and appropriately adjusted bylaws of an enterprise shall be registered according to the procedure established by the laws of the Republic of Lithuania. Article 19.Invalidity of Contracts Concluded at Auctions, and of .Ssubscriptions for Shares
The court shall find the contract concluded at auctions or subscriptions for shares to be invalid if: 1) there was no public notice of the auction or the subscription for shares; 2) the object under sale has not been drawn into privatization programmes or was registered not in conformity with laws; 3) participation by persons entitled to take part in auctions or in subscriptions for shares was interfered with; 4) the object of privatization ( shares) has been purchased by a person who had no right to take part in an auction or to subscribe for shares; 5) the object of privatization (shares) has been sold violating the time limit fixed for conducting an auction of for subscribing for shares; 6) other rules governing the conducting and advertising of an auction or subscription for shares have been violated; 7) there are other invalidity terms of contracts provided for in the civil code.
If the court finds an auction or subscription for shares to be invalid through the fault of privatization agencies of local governments, all losses shall be reimbursed by the local government of the higher level. V. Landsbergis President Supreme Council Republic of Lithuania Vilnius 28 February,1991 No. I-1115 Note: The law includes all the amendments approved by the Supreme Council of the Republic of Lithuania on 14 March,
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Republic of Lithuania Law On the Initial Privatization of State Property Chapter 1 General Provisions Article 1. The Obj