Saeima committee backs proposal ruling out revision of past transactions in strategic companies' shares

RIGA - The Saeima Defense, Interior and Corruption Prevention Committee today endorsed a proposal to scrap draft legislation that would have empowered the government to make strategically important companies’ owners with a controlling interest in these companies to sell off their shares.

Consequently, the above draft amendments will no longer allow for a revision of past transactions.

At the same time, the draft amendments still contain provisions obliging persons who want to acquire a controlling stake in a strategically important company to ask the government’s permission for the deal.

The Saeima committee, however, decided to drop the provision that would have given the government the authority to decide within three months of receiving information about a planned acquisition deal on obliging shareholders with a controlling stake in the given company to sell their shares within a certain period of time.

Economics Ministry parliamentary secretary Vilnis Kirsis (Unity), who had proposed to scrap the provision, explained that in the Economics Ministry’s view, the amendments on the enterprises essential for Latvia’s national security should not be applied retrogressively.

The legislation will serve its purpose even if it is only applied to those transactions that will take place in the future after the new regulations have taken effect, the Economics Ministry’s representatives argued at the Saeima committee meeting.

The Saeima committee will continue work on the draft amendments to the National Security Law on March 22, with the bill’s final reading in Saeima planned for March 23.

As reported, Saeima has passed in the first reading draft amendments to the National Security Law that will authorize the government to instruct the shareholders with significant participation in a company important for national security to sell their holdings in the company. Also, anyone willing to acquire a controlling interest in any such company will need to obtain the government's approval.

The new regulation would apply to some large electronic communication services providers, national electronic mass media, as well as certain gas, electricity and heating companies.