ORDER OF THE GOVERNMENT REPUBLIC OF MOLDOVA

of November 11, 2010 No. 1053

About approval of the Regulations on representative office of the state in commercial societies

Based on Item e provisions) article 12 of the Law No. 121-XVI of May 4, 2007 on management of public property and its privatization (The official monitor of the Republic of Moldova, 2007, Art. No. 90-93, 401), with subsequent changes and amendments, the Civil code of the Republic of Moldova No. 1107-XV of June 6, 2002. (The official monitor of the Republic of Moldova, 2002, Art. No. 82-86, 661), with subsequent changes and amendments, the Law No. 1134-XIII of April 2, 1997 on joint-stock companies (repeated publication: The official monitor of the Republic of Moldova, 2008, Art. No. 1-4, 1), with subsequent changes and amendments, the Law No. 135-XVI of June 14, 2007 on limited liability companies (The official monitor of the Republic of Moldova, 2007, Art. No. 127-130, 548), with subsequent changes, the Law 158-XVI of July 4, 2008 on the state position and the status of the government employee (The official monitor of the Republic of Moldova, 2008, Art. No. 230-232, 840), with subsequent changes and amendments, and for the purpose of effective regulation of procedure for representation of the state in commercial societies with public or public private equity DECIDES: the Government

1. Approve Regulations on representative office of the state in commercial societies according to appendix No. 1.

2. To bodies of the central public management to bring administrative acts about authority delegation to representatives of the state into compliance with provisions of this Resolution.

3. Recognize invalid some orders of the Government according to appendix No. 2.

Prime Minister

Vladimir Filat

Countersign: Minister of Finance

Vyacheslav Negrutsa

Minister of Transports and Road Infrastructure

To Anatoliye Shalar

Minister of Cultural Affairs

Boris Foksha

Appendix №1

to the Order of the Government of the Republic of Moldova of November 11, 2010 No. 1053

Regulations on representative office of the state in commercial societies

I. General provisions

1. The regulations on representative office of the state in commercial societies (further - the Provision) are obligatory for bodies of the central public management (further - authorized body) which perform powers on management of public property in commercial societies from shares of the state (further - commercial societies).

2. This Provision determines powers of the representative of the state, procedure for its appointment and response.

3. The representative office of the state in commercial societies with the state share is performed by means of:

1) appointments of person as the representative of the state in economic society based on the administrative act published by the head of the relevant authorized body; and/or

2) the choice as appropriate persons as members of council or audit committee of commercial society, according to the decision of general shareholder meeting (unitholders) of the relevant society, based on the proposal of the head of authorized body (further - persons representing authorized body).

4. The representative of the state, acting on behalf of authorized body, represents and protects the rights and legitimate interests of the state in commercial society with the state share or to which the property of the state-owned public property was transferred to economic board.

5. The representative of the state performs the activities, participating and voting complete packet of shares / authorized shares of the state on general meetings of commercial society, and can be elected as appropriate as the member of council of this society.

6. Persons representing managing body within council of commercial society and audit committee perform the activities according to the Join-stock companies law, the Law on limited liability companies, the charter of commercial society, regulations on the councils and audit committees approved by general shareholder meeting represent and protect the rights and legitimate interests of the state in commercial societies with public share of the state.

7. The same person can be at the same time member no more than five councils of commercial societies and can be appointed as the representative of the state only in one commercial society.

II. Authority delegation to the representative of the state

8. Powers of the representative of the state are delegated by the government employee of authorized bodies which will provide accomplishment of functions of the representative according to requirements of this provision.

9. The representative of the state performs the functions according to the administrative act published by authorized body during the term which is not exceeding three years.

10. Cannot be appointed as the representative of the state:

1) heads of public institutions;

2) persons who are taking up high state positions;

3) persons who are earlier ousted the representative of the state in connection with improper execution of this function;

4) persons who have property interest in the relevant commercial society;

5) persons who fall under the incompatibility and restrictions provided by the Law No. 16-XVI of February 15, 2008 on conflict of interest (The official monitor of the Republic of Moldova, 2008, Art. No. 94-96, 351).

11. According to this Provision, persons having valuable interest in commercial society are recognized:

1) the shareholder/unitholder owning solely or together with affiliates of more than 5% of the voting shares/share of the authorized capital of society or the society affiliated with it or the competing society according to core activities;

2) person whose affiliates to the third degree are members of council or executive body or audit committee or hold positions of heads of this commercial society or the society affiliated with it.

12. For appointment as the representative of the state government employees with work experience in public service get out at least three years.

13. The candidate for position of the representative of the state shall confirm compliance to requirements of Items 10 and 11 of this provision by filling of the questionnaire according to the sample given in appendix to this Provision. The representative of the state bears the personal liability for the wrong or false data specified in this questionnaire.

14. In case share of the state in the authorized capital of commercial society constitutes less than 10%, the authorized body makes the decision on feasibility of appointment of the representative of the state.

III. Powers of the representative of the state

15. The representative of the state performs the activities according to the legislation on commercial societies, constituent documents of commercial society, taking into account the features established by this Regulations and the administrative act on authority delegation.

16. If in the course of fulfillment of duties the representative of the state had valuable interest as it is established in Item 11 of this provision, he shall report within three days about it to authorized state body which makes the relevant decision.

17. The main functions of the representative of the state are:

1) control of the size of share of the state in the authorized capital of commercial society;

2) control of safety and proper use of property of public property, transferred in privatization process to this society on the right of economic board;

3) control of correctness of charge and completeness of transfer of share dividends (authorized shares) belonging to the state in commercial societies;

4) participation in the commissions on sale, write-off and letting of property of commercial society;

5) rendering the methodological help in corporate management by commercial society (participation in development of provisions for internal use, business plans, modification and amendments in constituent documents, etc.).

Other powers which are not contradicting the current legislation and constituent documents of this society also can be assigned to the representative of the state by the administrative act about authority delegation.

18. The representative of the state has no right:

To perform 1) in combination, under the civil agreement or on other conditions any other paid activities in commercial society, except provided by its powers;

2) to represent commercial society in the relations with the third parties;

3) to transfer accomplishment of the functions on representation to other persons;

4) to make claim and civil actions on behalf of society, to represent authorized body in degrees of jurisdiction in civil disputes with participation of commercial society, except as specified, when the charter of society provides other.

19. The representative of the state shall approve in writing with authorized body nature of vote and drafts of decisions of governing bodies of commercial society on the following questions:

1) nomination of candidates in governing bodies of commercial society or their response (dismissal);

2) change of the authorized capital, core activities of commercial society, and also modification and amendments in its constituent documents;

3) reorganization or dissolution of commercial society;

4) the conclusion of transactions which amount exceeds 25% of amount of assets of society;

5) additional share issue;

6) agreement signature about management with the administrator of commercial society;

7) revaluation of fixed assets of society;

8) issue of obligations and receipt of the credits;

9) equity of commercial society in organization of other companies, including affiliated and joint;

10) other questions affecting legitimate rights and interests of the state in this commercial society.

20. Additional instructions have the right to give to the representative of the state only the official of authorized body.

Additional instructions of the official of authorized body cannot contradict the current legislation, constituent documents of commercial society and the administrative act about authority delegation. These instructions shall be specific, executable and shall not change amount of the powers delegated in accordance with the established procedure to the representative of the state.

Additional instructions are given only in writing.

21. If general shareholder meeting, council of society or executive body made the decision which causes damage to interests of the state, the representative of the state shall inform authorized body. The representative of the state submits within 3-day term to council (if it is created) or executive body the written reasonable request about cancellation of such decision or suspension of its execution.

22. The representative of the state shall submit every half-year to authorized body the performance report of the functions.

This report shall contain the indicators specified in appendix No. 1 to the Order of the Government No. 568 of May 6, 2008. "About the organization of accounting of public property and its movement" (The official monitor of the Republic of Moldova, 2008, Art. No. 86-87, 556), and also:

1) the reasons of change of the size of share of the state in the authorized capital of commercial society, and also measures taken by the representative of the state with respect thereto - if such change took place;

2) data on the dividends transferred to the state and obligatory payments into the government budget;

3) measures which need to be accepted for protection of interests of the state in commercial society, and also other legally significant data - according to the administrative act about authority delegation and additional instructions of the authorized person or at the discretion of the representative of the state.

23. The representative of the state in case is at the same time and the member of council of society, performs also powers of the member of this governing body.

24. If the representative of the state cannot temporarily carry out the obligations, he shall report prior to the due date not later than seven days about it to authorized body.

In such cases the authorized body shall delegate the order powers to other representative for the period of absence of the appointed representative.

25. Powers of the representative of the state stop:

1) after the term specified in the administrative act about authority delegation;

2) in case of the termination labor the relation with authorized body.

3) in case of response of the representative of the state the body which appointed it;

4) in case of reduction of share of the state in the authorized capital of commercial society is lower than 10% if other is not provided in the order of the authorized body which appointed it;

5) in case of complete privatization of the state-owned property brought in the authorized capital of commercial society and lack of the objects of state-owned property transferred to it as economic board;

6) upon completion of process of liquidation of commercial society;

7) on other bases provided by the current legislation and this Provision.

26. The bases for response of the representative of the state are:

1) improper execution of the functions delegated to it;

2) the statement of the representative of the state for release it from obligations;

3) the disease within four months in a row interfering accomplishment of functions of the representative of the state;

4) other bases, stipulated by the legislation and this Provision.

27. The authorized body within 10 days notifies commercial society and the recalled representative on the termination of powers of the representative of the state.

28. Person performing activities for representation in commercial society earns monthly salary and annual payments in the sizes established on general meetings. The amount of annual payments cannot exceed limit in the amount of one percent of the net annual profit received by society, and is individualized for each person performing activities for representation of the state ? no more than 2 average monthly salaries on society for previous year within the specified limit.

IV. Responsibility of the representative of the state

29. The representative of the state, being official, bears responsibility for the activities according to the labor, administrative and penal legislation.

30. The representative of the state is exempted from liability for decision making, caused to the state losses if he:

1) voted against adoption of such decision and it is reflected in the protocol of relevant organ of management of commercial society (in the special opinion attached to the protocol);

2) voted for decision making, the standard entrepreneurial risk which is in limits;

3) was effective within limits industrial or management risk.

31. The legally significant actions of the representative of the state made by it with abuse of authority, established by this Regulations, the administrative act on authority delegation or the agreement, are recognized valid only in case of subsequent their approval by authorized body.

32. The decisions of governing bodies of commercial society made taking into account casting vote of the representative of the state within its powers can be cancelled by the governing body which accepted it or its higher body or can be recognized as court invalid if the representative of the state acted in selfish or other private interests contrary to interests of the state.

Appendix

to Regulations on representative office of the state in commercial societies

                            Анкета № _____
                     представителя государства в
                 ___________________________________

     1. Имя и фамилия ________________________________________________
     2. Должность ____________________________________________________
     3. Стаж работы на государственной службе ________________________
______________________________________________________________________
     4. Другие данные ________________________________________________
______________________________________________________________________
     "_______" __________________20 _____________________
                                           подпись
     5. Подтверждаю,  что ограничения, предусмотренные в пунктах 10-11
Положения о представительстве государства  в  хозяйственных  обществах
мною не применяются.
     "_______" __________________20 _____________________
                                           подпись 

Appendix № 2

to the Order of the Government of the Republic of Moldova of November 11, 2010 No. 1053

The list of the orders of the Government which are recognized invalid

1. The order of the Government No. 109 of February 2, 1999. "About representative office of the state in economic societies" (The official monitor of the Republic of Moldova, 1999, Art. No. 19-21, 128).

2. The order of the Government No. 212 of March 3, 2000. "About modification of the Regulations on representative office of the state in economic societies" (The official monitor of the Republic of Moldova, 2000, Art. No. 29-30, 293).

3. Item XII of changes and additions which are made to the separate orders of the Government of the Republic of Moldova, approved by the Order of the Government No. 1376 of December 10, 2001?. (Official monitor of the Republic of Moldova, 2001, Art. No. 155-157, 1426).

4. Item of 6 changes and additions which are made to some orders of the Government of the Republic of Moldova, approved by the Order of the Government No. 435 of April 14, 2003. (Official monitor of the Republic of Moldova, 2003, No. 76, Art. 468).

5. The order of the Government No. 887 of July 16, 2003. "About modification of the Regulations on representative office of the state in economic societies" (The official monitor of the Republic of Moldova, 2003, Art. No. 155-158, 928).

6. The order of the Government No. 739 of June 29, 2004. "About modification of the Regulations on representative office of the state in economic societies" (The official monitor of the Republic of Moldova, 2004. Art. No. 108-111, 903).

7. Item 1 of the Order of the Government No. 594 of May 13, 2008. "About modification and recognition voided some orders of the Government" (The official monitor of the Republic of Moldova, 2008, Art. No. 88-89, 585).

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