Ukrainian state-owned companies may soon change their operation procedures. On November 12 of this year the people’s deputies passed a draft law No. 3062 “On introduction of amendments to certain acts of legislation of Ukraine on management of the state-owned enterprises” in the first reading.

Yurydychna Praktyka legal newspaper asked lawyers to analyze the future amendments. Lesia Samarina, Head of Dnipropetrovsk Office of Ilyashev & Partners Law Firm, stated the following in her comment:

“The draft law offers to introduce amendments to a number of legal documents: the Economic Code of Ukraine, the Law of Ukraine “On economic entities”, the Law of Ukraine “On lease of the state and communal property”, the Law of Ukraine “On privatization of the state property”, the Law of Ukraine “On holding companies in Ukraine”, the Law of Ukraine “On management of the state-owned companies in Ukraine”, the Law of Ukraine “On the judicial system and status of judges” and the Law of Ukraine “On the State Property Fund”.

According to the explanatory note the state is planning to establish supervisory councils at the unitary enterprises and engage independent members to exercise control over the state-owned property. The companies operating in the state sector of economy shall also be obliged to release information about its activities. It is also planned to establish that annual (including consolidated) statements of the state-owned enterprises shall be subject to compulsory audit.

The aim of the draft law is to improve the system of management of the state-owned companies, establish favorable environment for optimization of the structure of the state sector of economy and implementation of the market methods of management of the state-owned enterprises.

It should be noted that the aggregate loss suffered by the state enterprises in the current year has notably exceeded the last year’s figures. It is totally evident that the state sector of economy requires reform measures. However, reforms will be possible to perform only by introduction of fundamental changes into the system of management of the state-owned enterprises. The draft law in question is aimed at making the state enterprises more transparent and bringing them under tighter control of the state”.