The government intends to act on behalf of minority shareholders
On October 26, 2012 Spartak and Kommunarka confectionaries were de facto nationalized. It is anticipated that the issue of minority shareholders’ protection by the state will be decided on default. If so, the rights of large investors and minority shareholders will be violated and the feasibility of shares’ ownership in Belarusian enterprises will become even more questionable.
On October 25th, 2012 a meeting about how to improve public shares management was held.
Private shareholder’s stake in “Spartak” has been reduced from majority to minority by issuing additional shares and transferring to the state’s balance. It has been proposed to simplify functions of the Supervisory Boards at enterprises with state’s share larger than 50%. Private minority stakeholders are supposed to be protected by the state, even if they have not expressed interest in such protection. At enterprises with state’s shares less than 50% it was proposed to nominate a person to carry out state policy.
In fact, it implies a double standard in the field of corporate management. If an enterprise is owned by the state by 50% or more, the state does not care about the minority shareholders’ interests. The state will ignore opinions of shareholders about dividends and management in the name of public interest. If a private owner has the majority stake, the state formally denies it the right to control the enterprise, based on the assumption that it will focus on investment return, rather than on serving public interests.
Superficial concern about private minority shareholders is an attempt to control additional shares concentrated in the hands of private individuals. Private person, in state’s view, is incapable to decide whom and how to transfer the management of his/her stake. The state can therefore obtain the right to dispose of additional shares, without additional costs.
Thus, an investor is faced with choice: either to purchase the enterprise entirely to get rid of the state and private shareholders, or to invest at own risk, bearing in mind the potential risk to lose investments and control over the company, even if he or she is a majority stakeholder, as stakes can be taken away on formal grounds in the future. In these circumstances, privatization of state enterprises makes no sense for the majority of shareholders unless 100% of shares are sold.
The Belarusian authorities regard the Catholic conference as yet another international event to promote Minsk as a global negotiating platform. Minsk’s proposal to organise a meeting between the Roman-Catholic Church and the Russian Orthodox Church is rather an image-making undertaking than a serious intention. However, the authorities could somewhat extend the opportunities for the Roman-Catholic Church in Belarus due to developing contacts with the Catholic world.
Minsk is attempting to lay out a mosaic from various international religious, political and sportive events to shape a positive image of Belarus for promoting the Helsinki 2.0 idea.
Belarus’ invitation to the head of the Holy See for a meeting with the Patriarch of the Russian Orthodox Church should be regarded as a continuation of her foreign policy efforts in shaping Minsk’s peacekeeping image and enhancing Belarus’ international weight. The Belarusian authorities are aware that their initiative is unlikely to find supporters among the leadership of the Russian Orthodox Church in Moscow. In Russia, isolationist sentiments prevail.
In addition, for domestic audiences, the authorities make up for the lack of tangible economic growth with demonstrations of growth in Minsk’s authority at international level through providing a platform for religious, sportive and other dialogues.