The Ministry of Finance entered the procedure of drafting the new Law on the Management of State-Owned Enterprises and yesterday invited the interested public (bodies, organizations, associations and individuals) to submit their initiatives, proposals, suggestions regarding this legal solution.
Department managed by the minister Novica Vuković also published a public call for non-governmental organizations to propose one representative to the Working Group for drafting this law.
"The law on the management of state-owned companies will regulate the way of implementing the policy of state ownership, management, property and other issues of importance for companies that are majority owned by the state/municipality, as well as public companies, which are now not in the right way recognized by the Law on Business Companies, as well as by other legal regulations of Montenegro", the Ministry of Finance explained.
Legal prescription of a clear ownership function of the state/municipality with associated goals will directly, as stated on the ministry's website, contribute to the establishment of the basic principles of corporate governance, such as efficiency, transparency and responsibility.
"Establishing the principles of corporate governance is in accordance with OECD Guidelines, as well as EU directives (Transparency Directive). By preparing a draft of the new legal solution, the aim is to comprehensively regulate the system of management and supervision over the sector of state-owned enterprises, as well as all the specifics related to the functioning and operations of these companies. Consultations of the interested public in the preparation of the Draft Law on the Management of State-Owned Enterprises will last 15 days from the date of publication of this invitation. The Ministry of Finance will consider and take into account all incoming initiatives, proposals, suggestions and comments when drafting the Draft Law on the Management of State-Owned Business Companies", said the department.
This summer, the Government published the Register of Public Enterprises and Companies in Majority State Ownership, which includes 53 companies.
The register stated that the profitability of state-owned enterprises increased last year compared to previous years, which indicates the recovery of the entire enterprise sector after the coronavirus pandemic.
"The ratio of net results to assets, the ratio of capital at the aggregate level indicate that the calculated profitability coefficients are gradually improving. At the same time, the cost recovery coefficient, which measures the company's ability to fully generate adequate income to cover operational costs, indicates that according to the overall result, this sector is in the category of medium risk, which indicates that companies do not generate enough return to cover the state's invested funds. The liquidity ratios of the state-owned enterprises sector are in decline, which indicates that the entire state-owned enterprises sector has less liquid short-term assets with which it can settle its obligations than it was the case before the pandemic," the register stated.
Although the state-owned enterprise sector appears to be healthy, there are certain companies that are making significant losses or not making enough profits to service their obligations, and some companies are also facing liquidity challenges.
"Specifically, many state-owned companies need a lot of time to pay off their creditors, although in some cases the high number of business days may be a consequence of the contractual relationship," the register states.
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