The RSPP proposed to legitimize the procedure for reviewing privatization transactions

The Russian Union of Industrialists and Entrepreneurs (RSPP) sent President Vladimir Putin proposals for legislative regulation of the review of privatization transactions. The RSPP proposes to stipulate in the law compensation for investors for the market value of assets if privatization was carried out with violations.

Amendments are proposed to be made to the federal law “On the privatization of state and municipal property.” “We propose to use two-way restitution, that is, the right of the state to turn this or that property into the treasury, and the right of the current owner to compensation at the market price, taking into account previous costs. This is the first. The second is a pretrial sentence,” RSPP President Alexander Shokhin told reporters (quoted from “Interfax”).

The pretrial period, as Mr. Shokhin explained, is a ten-year limitation period in relation to violated economic rights. It was established in 2013 and should therefore affect all transactions for which the ten-year statute of limitations expired in September 2023.

The RSPP drew attention to the fact that in the claims of the Prosecutor General’s Office for the return of assets to the state, it is said that an inappropriate government body made a decision on privatization. In this regard, the business proposes to establish in legislation the criteria for the buyer’s good faith. For example, this could apply if the buyer could not have known about the irregularities surrounding the transaction.

The buyer can be compensated for the money spent using funds from re-sales, the RSPP believes. Mr. Shokhin admits the possibility of “deferred compensation.”

The RSPP also proposes to clarify situations in which the privatization of strategic organizations was carried out properly, but in subsequent transactions the share of the foreign investor exceeded the limit of 25% or 50%. According to Mr. Shokhin, the simplest method of settlement is “an order to the relevant companies to return the excess asset to the hands of the previous owner.”

In recent months, the Prosecutor General’s Office has repeatedly filed lawsuits to transfer private industrial companies into state ownership due to violations identified by the department in the privatization process. President Vladimir Putin in September promisedthat deprivatization will not be carried out in Russia. However, he noted that law enforcement agencies “have the right to assess what is happening in the economy in specific cases.”

About the latest demand of the Prosecutor General’s Office to return a private enterprise to state ownership – in the Kommersant material “The prosecutor’s office stood at the bench”.