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External administration at companies contrary to common sense

«Amendments to the law on joint stock companies, which provide for the possibility of introducing external administration, is contrary to common sense,» Executive Director of the International Business Council (IBC) Askar Sydykov told 24.kg news agency.

According to him, the business community was surprised and alarmed by such an initiative. After all, it contradicts the laws of the market economy and the government’s statements on business support, including the President’s message, in which he told about protection of entrepreneurs.

«Our government often talks about support on the one hand, and on the other hand wants to adopt such initiatives. We need to prevent such changes from adoption. After all, external administration is introduced when the enterprise has difficult times, it does not cope with the problems. In this case, an external administrator is needed to help the company,» Askar Sydykov said.

The head of the IBC is particularly concerned that the amendments are adopted because of the work of Kumtor. He thinks it is more dangerous.

«You cannot give a strategic object to external or state administration. This is illegal and will not lead to anything good. At least 80 percent of state-owned companies are loss-making. This has been said more than once. If the bill is passed for the sake of Kumtor, it turns out that something bad is going on around it. Most likely, these are links in one chain: the state commission, disputes with the Tax Service about taxes and social security contributions, and other processes. I am afraid it can go too far,» Askar Sydykov stressed.

Kumtor provides over 15 percent of all taxes. Its contribution to GDP is over 10 percent. Any uncertainty, negative manifestations towards this company can affect the economy and perception of foreign and domestic investors. After all, deputy commissions continue to work on other companies. We have messages from investors. All this cannot but disturb us. We will try to explain everything to colleagues, the government and decision-makers," he concluded.

The deputies amended the laws on corporate governance, joint stock companies and the Misdemeanor Code. They will be applied only to companies that operate under a concession agreement. According to the changes, in case of a threat to life and the environment, external administration is introduced for three months.

One of the initiators, Akylbek Japarov, admitted at a parliamentary session that the bill had been initiated for Kumtor only.