Republic of Lithuania
Law
On the Initial Privatization of State Property
Chapter 1
General Provisions
Article 1. The Objective of this Law
1. 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").
2. 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.
3. 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
1. 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.
2. 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 3. Information relating to privatization
1. During the period of privatization, special periodical
publications -- information bulletins of privatization -- shall
be issued.
2. 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.
3. 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.
4. 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 4. 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.
2. 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.
3. 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.
4. 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 5. The powers of privatization commissions
1. 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.
2. 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.
3. 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.
4. 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.
5. 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 6. Rights and duties of privatization agencies
1. 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.
2. 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.
3. 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.
4. 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.
5. 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 7. Object of Privatization
1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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.
8. 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 8. Re-appraisal of Objects Subject to Privatization
1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
2. Legal persons cannot acquire objects of privatization
(shares) for roubles.
3. 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.
4. 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 10. 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
1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
2. 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).
3. 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.
4. 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
1. 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.
2. 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.
4. 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 14. Methods of Initial Privatization
1. 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.
2. 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.
3. 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.
4. State joint-stock and state enterprises possessing share
capital shall be privatized only by announcing public
subscription for shares.
5. 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.
6. 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.
7. 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 15. The Utilization of
Funds Received through the Selling of Objects of Privatization
1. 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.
2. 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.
3. 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.
4. 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.
5. the procedure for the utilization of privatization funds
shall be established by the Supreme Council of the Republic of
Lithuania.
Article 16. The Procedure for Organizing Auctions
1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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
1. 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.
2. 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).
3. 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.
5. 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.
6. 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 18. Subscription for Shares
1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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.
8. 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 .
9. 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.
10. 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.
11. 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.
12. 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
1. 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.
2. 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, 1991. They are
marked by an asterisk*.