Constitutional court ruled the parliament violated constitution (2.10.2002)

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Investiční bankovnictví KB

      Constitutional court decided that the Parliament violated constitution, when it repeatedly voted on an amendment to commercial code. The court cancelled this novel by 31 March 2003.

       Strategic partners receiving majority stakes in privatization sales will not be obliged to offer buyout to minority shareholders until this date. Cesky Telecom, CEZ and Unipetrol are the most important cases. Nevertheless, the Constitutional court ruling does not guarantee the government will not try to amend the commercial code again. The decision is important for possible privatization of Unipetrol and CEZ. If the new owners are obliged to offer buyout for minority shareholders it will translate into lower price for government’s stake. Given the fact the government is under financial pressure, we expect the politicians to amend the commercial code again to ensure a potentially maximum privatization revenues, as we have already experienced in the past. Privatization of Cesky Telecom is completely different story. If consortium Deutsche Bank/TDC purchases only government’s stake it will not have to offer the buyout for minority shareholders. Different situation will be if it also purchases shares held by TelSource and KPN Telecom. In this case, the consortium should not be able to avoid offering the buyout.

      

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