2002年-世界发展银行全球_Corporate_Governance_Country_Assessment___Georgia_38页_350kb

Corporate Governance Assessment of Georgia (March 2002)

I. Executive Summary

Georgia's corporate governance framework is governed by two key laws: the 1994 Law on Entrepreneurs (amended in 1999) and the 1998 Law on Securities Market. As of November 2001, the Georgian Stock Exchange (GSE) admitted 284 joint stock companies, but only 15 securities were traded regularly. The market capitalization of the GSE was 144 million GEL (US$70 million), representing 2.3% of GDP. The corporate sector is dominated by business groups, and the GSE has been working to reduce off-market (gray market) trading and increase transparency.

The National Securities Commission of Georgia (NSCG), established in 1999, is the primary regulatory body for securities markets and is not subordinate to any other state agency. It reports directly to Parliament and has the authority to supervise market participants, including the GSE and share registrars. However, the NSCG faces challenges such as limited funding, low salaries for employees, and occasional operational difficulties.

Despite progress, the assessment identified significant weaknesses in corporate governance, including the lack of shareholder meetings, inadequate disclosure, and insufficient protections for minority shareholders. Reform is necessary to strengthen the legal and institutional framework, improve transparency, and enhance the capacity of regulatory bodies.

II. Description of Practice

A. Capital Market Overview

• Market Structure: As of November 2001, there were approximately 1,500 joint stock companies in Georgia, representing less than 2% of all enterprises.
• Listing and Trading: The GSE is the only organized stock exchange in Georgia and is a member of the Federation of Euro-Asian Stock Exchanges. It requires companies to file legal foundation documents with the enterprise register before listing.
• Market Development: The GSE was established in 1999 and has made progress in reducing gray market trading, though only two new securities offerings have been made since its inception.
• Regulatory Efforts: The NSCG has implemented measures to increase transparency and disclosure, such as requiring beneficial shareholders with 5% or more ownership to report their holdings. It also oversees share registrars and conducts inspections.

B. Shareholder Protections

• Basic Rights: Shareholders have voting rights for common shares and non-voting rights for preferred shares, except in cases of non-payment of dividends. Share transfers may be restricted by company charter, but the 1999 amendments limited the ability of managers to impose such restrictions.
• Annual General Meetings (AGMs): AGMs must be held annually within two months after financial statements are prepared. Shareholders owning 1% or more must be notified by registered letter, and the meetings are chaired by the President of the Supervisory Board.
• Shareholder Participation: Shareholders can request explanations for agenda items and participate via proxies. However, up to one-third of reporting companies failed to hold AGMs as required by law.
• Equitable Treatment: Shareholders may initiate derivative lawsuits if their rights are violated, but class action lawsuits are not permitted. The NSCG can investigate legal violations and its decisions are subject to administrative review.
• Statutory Remedies: Dominant shareholders who harm the company must compensate others. Shareholders with 5% or more ownership can demand special investigations if they believe financial assets are misused. Shareholder redemption rights exist in certain situations, such as real estate transactions at less than 50% of book value.

C. The Role of Stakeholders in Corporate Governance

• Respect of Legal Rights: The NSCG and GSE aim to ensure legal rights are respected through oversight and disclosure requirements.
• Redress Mechanisms: Shareholders can seek redress through the courts or the NSCG, though the process is often cumbersome.
• Performance Enhancing Mechanisms: The NSCG has held town hall meetings to educate small shareholders on their rights. However, the system lacks centralized and online access to company information.
• Access to Information: Enterprise registers and court registers hold key company information, but access is inconsistent across districts and not centralized.

D. Financial and Non-Financial Disclosure

• Material Information: Companies must disclose material facts and events in prospectuses and annual reports. The NSCG must approve all prospectuses.
• Independent Audit: Audited financial statements are required for all public offerings and annual reports.
• Share Ownership: Companies with more than 100 shareholders or listed on the GSE must use independent share registrars. Only a few independent registrars exist.
• Director and Executive Disclosures: Information on directors and their remuneration must be disclosed. The NSCG maintains records of all publicly traded companies.
• Other Disclosures: Companies must disclose potential conflicts of interest among their stakeholders.

E. The Governing Body

• Structure and Duties: The NSCG oversees securities market participants and has the authority to impose sanctions, including fines up to GEL 10,000.
• Nomination and Composition: The NSCG is composed of five members, including a Chairman and three Commissioners, appointed by the President and approved by Parliament. Members may be reappointed once.
• Key Functions: The NSCG is responsible for market supervision, investigations, and enforcement of securities laws.
• Independent Oversight: The NSCG has the authority to inspect all regulated entities and refer cases to the Prosecutor-General if necessary.

III. Policy Recommendations

• Strengthen the capacity of the NSCG through improved budgeting, human resources, and skills.
• Establish a website for the NSCG to centralize and make publicly available information on companies.
• Develop a voluntary national code of best practice in corporate governance.
• Set up an institute of directors to train corporate leaders and promote best practices.
• Improve the accounting and auditing profession to ensure reliable financial reporting.
• Enhance the legal framework for shareholder rights and protections, particularly for minority shareholders.
• Implement stricter compliance with disclosure requirements and increase the number of new securities offerings.
• Centralize and digitize enterprise registers to improve access to company information.