New financial regulations to govern state-run businesses

State-run enterprises must preserve their state capital in compliance with laws governing the use and management of funds and assets and benefit distribution, according to a new government decree.

The legal document was issued on Feb. 5 by the Prime Minister to regulate financial management in State-run enterprises and to ensure the effective management of State capital invested in other businesses.

The decree states that, regarding external investment activities, state-run companies must ensure at least 70 percent of their total investment capital is invested in businesses operating in the same field, and their total external investment capital, whether long-term or short-term, may not exceed their charter capital.

However, regarding investment in the banking, insurance and securities sectors, a state-run company may not invest in more than one enterprise in each field, and its investment capital may not exceed 20 percent of its charter capital and 30 percent of the charter capital of the organisation it invests in.

Exceptional cases must be submitted to the Prime Minister for approval.

vna

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