Golden Share Research Articles

Konstytucyjna wolność przedsiębiorczości i prymat własności prywatnej a tak zwana złota akcja Skarbu Państwa

The subject of the study is the special privilege of the state in companies in which – having a minority of shares – they have golden share, and therefore the ability to exert an authoritative influence on significant decisions of the company, going beyond the capital position. This means limiting the freedom of enterprise and the primacy of private property. Golden share can be understood as an attempt to reconcile the interests of private owners with an important public interest in certain sectors of the economy where the interest of the state becomes particularly important. Since it is an exception to the equal position of shareholders, its use in economic policy should be extremely rare.

The Irony of the Golden Share

The Irony of the Golden Share

Origin and Concentration: Corporate Ownership, Control and Performance

We analyze the effects of different types and concentration of ownership on performance using a population of firms in a model transition economy after mass privatization. Specifications based on first-differences and unusual instrumental variables show that contrary to conventional wisdom, the effects of privatization and different types of ownership are limited and many types of private owners do not generate performance that is different from that of firms with state ownership. Concentrated ownership has a positive effect but only in some instances and a positive effect of foreign ownership is detectable primarily for majority ownership and foreign industrial firms. The effects of concentrated ownership support the agency theory and go against theories stressing the positive effects of managerial autonomy. Our results are also consistent with managers or stockholders “looting” the firms. The state as a holder of the golden share has a positive effect on employment and in some specifications also on output and profitability. Overall, our results suggest that the expectations and earlier findings of positive effects of privatization on performance were premature, with the effects of many types of ownership being indistinguishable from that of state ownership.

Business Trend Analysis of RMG Industry in Context of Bangladesh-A Case Study

Bangladesh has made a tremendous contribution to RMG (Ready Made Garment) sector since the 1970s. Textiles and apparels consider for about 85% of the total export earnings of Bangladesh. Though it’s quite difficult to mete out the dimension of performance and objection of the RMG sector in Bangladesh but to fulfill the task this study has made a search based on the study of attainable documents. The beauty of this study lies in its way of narration, a sequential way of description. The study discovers that since its inception, the RMG industry contributed significantly to our economy especially during the last three decades. The cross-check analysis has been conducted to compare the last three decades’ export of RMG, specific garments export, GDP, market share, etc to get a lucid idea of the business trend of the RMG industry. These initiatives focus more on the establishment of sound structure, skilled manpower, enhanced market access, access to finance at the competitive interest rate, adaptation with advanced technology as well as institutional development. Therefore, both public and private sectors need to take several preliminaries, independently and collaboratively to overcome these challenges. Moreover, to take control and reserve the golden share of RMG, assured branding needs to be expansive.

Serum albumin and nucleic acids biodistribution: From molecular aspects to biotechnological applications.

Serum albumin (SA) is the most abundant protein in plasma and represents the main carrier of endogenous and exogenous compounds. Several evidence supports the notion that SA binds single and double-stranded deoxynucleotides and ribonucleotides at two sites, with values of the dissociation equilibrium constant (i.e., Kd ) ranging from micromolar to nanomolar values. This can be relevant from a physiological and pathological point of view, as in human plasma circulates cell-free nucleic acids (cfNAs), released by different tissues via apoptosis, necrosis, and secretions, circulates as single and double-stranded NAs. Albeit SA shows low hydrolytic reactivity toward DNA and RNA, the high plasma concentration of this protein and the occurrence of several SA receptors may be pivotal for sequestering and hydrolyzing cfNAs. Therefore, pathological conditions like cancer, characterized by altered levels of human SA or by altered SA post-translational modifications, may influence cfNAs distribution and metabolism. Besides, the stability, solubility, biocompatibility, and low immunogenicity make SA a golden share for biotechnological applications related to the delivery of therapeutic NAs (TNAs). Indeed, pre-clinical studies report the therapeutic potential of SA:TNAs complexes in precision cancer therapy. Here, the molecular and biotechnological implications of SA:NAs interaction are discussed, highlighting new perspectives on SA plasmatic functions.

The Evolution of Privatization in Brazil: The Case of Embraer

State participation in the economy has been intensely debated over the past three decades. In Brazil, especially after the advent of the Federal Constitution in 1988. Privatization in Brazil, however, was instituted by Law 8.130/90, which established the National Plan for Privatization, aiming at transferring to the private sector activities unduly exploited by the public sector. In this article, we investigated one of the most significant privatizations in Brazilian history, the case of Embraer, the world's third largest civil aircraft manufacturer. Key findings pointed out a complex privatization process, including golden share vetoes and institutional challenges faced by Embraer, such as the first Brazilian company to adopt the International Financial Reporting Standards (IFRS) fully. In addition, the careful analysis suggested implications for the reduction of public debt. Also, the resumption of investments in companies and activities transferred to the private sector, modernization of the country's industrial park, increasing its competitiveness, and reinforcing business capacity in Embraer's jet C-series sector and military aircraft, for instance. Also, implications for the public administration to focus its efforts on actions where the State's presence is necessary for achieving national priorities. Finally, the strengthening of the capital market, as well as the democratization of the ownership of the capital of Embraer are topics to be debated in the present article.

Fool’s Gold? Constitution, Sovereignty and the Golden Share in Embraer-Boeing Case

The object of this article is to analyze the Golden Share (Ação de Classe Especial) as an instrument of economic sovereignty. It questions whether, legally, there is a possibility of imposing on the Executive Branch the use of the veto power inherent to the golden share in cases where a joint venture of a foreign company with a state-owned company represents a risk to national sovereignty. The hypothesis is that based on the principle of economic sovereignty (art. 170, I), there is an express obligation to the administration to veto in the case where a joint venture of a foreign company with a national company harms the domestic market (art. 219). It concludes that in the mentioned cases there is the possibility of imposing the use of the veto power to the Executive Branch, in case of omission, it is competence of the National Congress, and subsidiarily to the Judiciary Branch, due to the imposing nature of the constitutional principle of economic sovereignty.

Contradictions between corporate and state sectoral management in russian regions’ oil industry: digital solutions

Currently, the key and budget-forming sector of the Russian economy is still the oil industry, which includes the production, processing, transportation and sale of oil and oil products. The share of the oil industry in the country’s GDP amounted to above 40%, and, taking into account the petrochemical and manufacturing industries, exceeds 50%. In this aspect, an important task is to study the institutional environment of the operation of enterprises and organizations of the oil industry, as well as the mechanisms and tools of state sectoral management, because not only the activities of individual companies, corporations and enterprises, but also the level of socio-economic development of the country as a whole. The main forms of state participation in the regulation of such industries remain direct ownership of shares, including a controlling stake or “golden share”, delegation of government representatives to corporate boards of directors, as well as the creation of various forms of organizations with state participation. At the same time, there are a number of contradictions between the state, economic entities of the oil industry and public and expert organizations, which are expressed in different interpretations of short-term and long-term goals, the presence of not always coordinated concepts and strategies for the development of individual industries and areas, inconsistency of a number of state programs, projects, etc. These contradictions lead to a decrease in the efficiency of the system of state regulation of strategic sectors of the economy, which is expressed in a significant lag in labor productivity.

Why We Need a National Investment Authority

This brief memorandum lays out the case for a National Investment Authority (NIA): a permanent federal instrumentality tasked with devising and implementing a long-term national strategy of economic and infrastructural development. The memorandum emphasizes the proposed NIA’s potential to provide an indispensable—and presently lacking—institutional platform for effective coordination of the nation’s response to systemic crises like the COVID-19 pandemic. It outlines how the NIA would: (1) coordinate nationwide production mobilization efforts, (2) execute emergency financial relief and corporate bailout measures, and (3) manage public stakes in bailed-out private firms (through a novel “golden share” regime)—and do so in a transparent, democratically accountable, and distributionally just manner.

Золотая акция как нетипичный механизм гражданско-правовых отношений

Золотая акция как нетипичный механизм гражданско-правовых отношений

Dopuszczalność „złotej akcji” w polskim systemie prawa spółek

The admissibility of the “golden share” in Polish stock companyThe present article is devoted to admissibility of the “golden share” in Polish stock company. The current legislation does not explicitly allow or prohibit the existence of this statutory instrument. The article considered the possibility of granting such special privileges both as a shareholding privilege and as a personal right granted to a shareholder. The admissibility of these concepts has been assessed on the basis of the rules and common rules of company law, as well as the concepts incompatible with them has been criticised. In addition, the issue of statutory “gold shares” of the State Treasury, which grants the relevant minister a right to object to the specific decisions of the company, is outlined. Regulations and concepts under the current and previous law has been compared, as well as the above solutions were compared with the general rules and principles of company law.

PUBLICZNOPRAWNE ASPEKTY KONSTRUKCJI „ZŁOTEJ AKCJI”

PUBLIC ASPECTS OF GOLDEN SHARE CONSTRUCTION Summary In this paper I have tried to show the aspects of public law involved in the construction of a golden share. In view of the numerous privatisation processes which companies of strategic importance for the public order and security of a given state have undergone, the institution of the golden share has been made subject to public law. The literature I refer to presents the components of public law applicable to the golden share. The solutions prescribed in the Polish act of 2010 and in the legislation of other EU countries confirm that currently the connections of this institution with commercial law are becoming more and more tenuous.

"Golden Share" and the Limits of its Application

The paper deals with the issues concerning the limits of implementing a specific right of the state ("golden share") when the state participates in joint-stock companies. The author puts forward the view that a "golden share" is a concept where the interests of the state are competing with the interests of a joint-stock company and a joint-stock company and other shareholders. Thus, the paper leads to the conclusion that it was necessary to clearly limit the scope of application of the "golden share". To this end, the author determines five criteria that define the scope of the "golden share", namely: the purpose of implementing a "golden share", the holder of a "golden share" in relation to whom a "golden share" is issued, a share size (number of shares) in the charter capital of a joint-stock company and the term of validity of a "golden share". The author examines literary sources, provisions of the effective legislation and law enforcement practice, as well as the experience of foreign legal systems. The author calls for the necessity of a "soft" approach to the institute of a "golden share" that is based on an equitable balance and reasonable combination of interests of a state-shareholder, other shareholders and a joint-stock company.

Labor protection and government control: Evidence from privatized firms

In this paper, we examine whether labor protection determines the decision to retain a golden share in privatized firms. Using a sample of firms privatized in developing and industrialized countries, we find a negative relation between the likelihood of observing a golden share and labor protection. However, we find that this relation does not hold in the post-financial crisis period, suggesting that the recent crisis is associated with an increase in government control. Furthermore, we show that privatized firms in countries with strong labor protection are penalized with a higher cost of equity. Overall, our results underline the importance of labor protection for an important government control mechanism, namely golden shares, as well as for equity financing costs of privatized firms.

Recent Golden Share Cases in the Jurisprudence of the Court of Justice of the European Union

AbstractIn several golden share cases, the Court of Justice of the European Union (the “Court”) condemned Member States for reserving certain special rights in privatized companies for themselves. In spite of the Court's consistently strict approach in the golden share cases, the more recent golden share judgments demonstrate that the Court's practice is not free from uncertainties. In its case law, the Court seems to hesitate between the application of the freedom of establishment and the free movement of capital. Additionally, it is not entirely clear which measures are caught by provisions on the freedom of establishment and the free movement of capital.

Italian Golden Shares A Never-Ending Story?

The Italian ‘golden shares’ created on the basis of Decree-Law No.332/1994 have been overruled by the Court of Justice of the European Union (CJEU) back in 2000 in case C-58/99. In 2007 the CJEU has once again pointed on the incompatibility of the GSs with the Community law in Federconsumatori. The Italian government has been reluctant to comply and remove the contested Law. Instead it has tried to justify it by new provisions amending the original law. These new amendments became subject of the second judgement in 2009 on case C-326/07. In 2010, Berlusconi has issued a controversial decree which aimed to comply with the golden share cases C-58/99 and C-326/07. However, the measures proved to be insufficient and the breach of the Community law persisted nonetheless. Now, following the infringement procedure for non-compliance, after more than a decade of procrastination, the Italian government seem to have finally addressed the issue. New Italian technocratic government led by the former EU Competition Commissioner Mario Monti significantly amended the original golden share law. Yet again, the original golden share legislation has been amended, not repealed, which in turn has the potential to be incompatible with the EC law. This paper analyses compliance obligations and initiatives which stem from the judgments of the CJEU on the Italian golden shares, assessing whether Italy has acted in good faith towards the sincere co-operation principle enshrined in the Treaty.

Cross-Border Investments in Undertakings and the Future of EU Company Law

The golden share case law and other recent case law of the ECJ form a basis for the development of a rule of internal market law that all rules of general company law that may have as an effect that investors are prevented or deterred from making cross-border investments in undertakings restrict the freedom of establishment and the free movement of capital. Relevant rules that potentially restrict the freedom of establishment and the free movement of capital are, inter alia, rules that allow shareholders to include deviations from the principle of 'one share, one vote' in articles of association, such as multiple voting rights. Other potentially restricting rules are employee co-decision rules and shareholder liability rules. If certain of these rules are judged to restrict the fundamental freedoms, this would necessitate a fundamental reconsideration of the existing company laws of the Member States from the perspective of restrictions to cross-border investments.

Executive compensation and company performance: solutions found by recent corporate governance codes, the case of Portugal and wider issues

Executive pay has been rising silently in past decades across the globe, with more expression in the US, but increasingly in the UK and Europe (Pryce et al, 2010; IPS, 2010; ILO, 2008; EPI, 2007;).The relation between executive pay and corporate performance has never been as questionable as it is today. The sub-prime crisis and the financial and economic collapse that follow brought this relation to enormous scrutiny by the media, academics and notably by regulatory bodies. Empirical studies (Supanvanij, 2008; Baum, Sarver and Strickland, 2004) and reports of official bodies (EU Commission, 2011; FCIR, 2011; Hutton, 2011) and broader consultation like the one conducted by BIS (2011), all have shown and confirmed that this relation that justifies executive compensation levels is flawed. This suggests that the underpinning theories, notably the agency theory, socio-economic (Fulmer, 2009; Kakabadse et al, 2004) and the stakeholder theory (Pryce et al, 2010) need to be re-examined.In the Portuguese case there are not any studies that allow for comparing with international trends. However, Portuguese media (Expresso, 2011) has published a number of articles criticizing the enormous amounts of money paid to executives (particularly in public companies or companies where government holds a golden share) in the middle of a recession and in a period where Portugal was seen as the next country to need bail-out cash to survive.Interestingly this trend seems to be seen right across the developed countries regardless of corporate governance traditions being shareholder or stakeholder oriented. In response to the enormous public scrutiny and signs of shareholder activism, regulatory bodies right across the developed world issued new codes of corporate governance (AFG, 2011; SEV, 2011; EU Commission; 2011; Coffee, 2010; FCR, 2010; CMVM, 2010) with a great emphasis on board evaluation, shareholder “say on pay” and in some cases, mandatory disclosure of ratio of CEO pay to median employee earnings. Interestingly, and despite similar trends and levels of compensation in Portugal, the CMVM (2010) regulations, has not included most of the measures neither pushed for more disclosure on pay multiples and government has done little to improve corporate governance and levels of executive pay in public companies. This paper aims at examining current trends in executive compensation and theories that seem to justify them and to analyse the different solutions found by regulatory bodies to enforce greater transparency and accountability of corporate boards. It finishes with some questions that need answer regarding the impact of current trends on company performance and wider society.

A more prudent approach in the "golden share" cases

A more prudent approach in the "golden share" cases

Golden shares and privatisation of strategic sectors: a comparative study between Indonesia and the UK

Protecting national interests (strategic sectors) has been a plausible argument behind the adoption of golden shares by many of the countries undertaking privatisation, including Indonesia. This legal device is primarily designed for social and political purposes and not commercial purposes. In its operation, therefore, the golden share deviates from the general principles of company law such as ‘one share one vote’ by creating special rights including veto rights. The golden share is the state’s control-based regulation, not an equity-based control. Due to this unique characteristic, the Indonesian Government should maintain the existence and application of the golden share mechanism in privatised strategic sectors, such as telecommunications companies. However, as the existing golden shares arrangements suffer from a lack of clarity about specific functions, i.e., protecting national interests, the government should specify its criteria and put these into specific legislation.