What are the responsibilities of Directorate VII of the Department of the Treasury?
With reference to the State-owned enterprises " (SOE’s) held directly by the Ministry of the Economy and Finance, Directorate VII of the Department of the Treasury has the institutional responsibility of monitoring the same, exercising the shareholder rights, and managing the divestiture and privatisation processes, inclusive of the related approval and preparatory activities.
More specifically, the exercise of the shareholder rights occurs, as a matter of principle, in accordance with the provisions of general civil law, albeit with the distinct aspects, if any, established by the by-laws and articles of incorporation of the individual SOE.
The Ministry expresses its wishes through shareholder resolutions, and uses the instruments that are available to any shareholder; for example, the Ministry votes on approval of the financial statements, the appointment of board members and auditors and the determination of the related compensation, as well as amendments to the corporate by-laws. This is done within the limits of the size of the equity investment held and according to the provisions of both the by-laws (e.g. list voting) and the law.
Which companies are included in the summary schedule of the MEF's equity investments?
The schedule provides a list of the companies in which the Ministry of the Economy and Finance directly holds an equity investment and exercises the shareholder rights, sometimes with the agreement of other Ministry. Most of these companies hold equity investments in other subsidiary or affiliate companies, the list of which is reported in the financial statements of the respective holding company.
What is meant by the term "State-owned enterprises", also referred to as "investee companies"?
These are stock companies in which the State holds, through the Ministry of the Economy and Finance - Department of the Treasury, a portion of the share capital. The equity investment may be a majority or minority holding, depending on whether the portion of the capital held is greater than or less than 50 per cent, and it may be direct or indirect, depending on whether the share capital is held directly by the State or through an investee company.
What are the fundamental rules that govern the "State-owned enterprises "?
Investee companies are governed by the regulations applicable to commercial companies contained in the Civil Code (Book V, Title V), special regulations provided by sectors and regulatory bodies, and the provisions that generally apply to the activities of listed companies.
What is meant by the terms "Golden Share" and "Golden Power"?
The term "golden share" makes reference to that precise framework of rules identified in Article 2 of Decree-Law No. 332 of 31 May 1994, converted, with amendments, by Law No. 474 of 30 July 1994, by virtue of which any act that might imply the MEF's loss of control in companies directly or indirectly controlled and operating in the sectors of defence, telecommunications, transport, energy sources and other public services, it would be possible to identify, with a decree of the Prime Minister, those companies in which a special clause could be introduced into the by-laws so as to assign one or more of the following special powers, to be exercised with agreement of the Ministry of Economic Development:
- opposition to the acquisition of significant equity investments or to the consummation of shareholder pacts or agreements, regarding at least 5 per cent of the share capital (as represented by shares with voting rights at the ordinary shareholders meeting) or a lower percentage, as established by the decree of the Minister of the Economy and Finance;
- veto, as duly motivated in relation to the concrete damage suffered to the vital interests of the State, of the adoption of resolutions for the dissolution of the company, the transfer of the company, merger, divestiture, transfer abroad of the registered office, changes in the company purpose, amendment of the by-laws, which remove or modify the special powers;
- appointment of a director without voting right.
Since its introduction, the aforementioned regulatory framework with respect to special powers has raised substantial questions, especially at an EU level, since it was deemed incompatible with the principle of the free circulation of capital as sanctioned by European treaties.
With Decree-Law No. 21 of 15 March 2012, converted, with amendments, by Law No. 56 of 11 May 2012, Italy, in putting an end to the accusations made against it with the infraction proceedings No. 2009/2255, definitively amended the regulatory framework referenced in Article 2 of the decree-law of 1994, creating an innovative set of rules to vest the head of State with adequate powers to intervene in the event of extraordinary transactions regarding businesses operating in the defence and national security sectors (Article 1), as well as those businesses with strategic assets in the sectors of energy, transportation and communications (Article 2).
What does the law provide about the golden powers?
The execution of specific transactions identified by lawmakers requires notice, with the State thereafter being able to make certain determinations in relation to the exercise of the golden powers.
In this regard, implementation decrees play a key role in the definition of the sphere of application of the aforementioned regulations. The decrees, which are summarized below, provide for delegation of the task of identifying the resolutions, activities, assets and relationships relevant for the purpose of exercising the golden powers.
Following are details of the implementation decrees issued pursuant to the aforementioned regulations:
- Decree of the Prime Minister No. 108 of 6 June 2014: Regulation for the identification of the activities of strategic importance for the defence and national security system, pursuant to Article 1, Paragraph 1, of the Decree-Law No. 21 of 15 March 2012, converted, with amendments, by Law No. 56 of 11 May 2012, published in the Official Gazette 31 July 2014, No. 176
- Decree of the President of the Republic No. 35 of 19 February 2014: Regulation for the identification of the procedures for the activation of the special powers in the defence and national security sectors, pursuant to Article 1, Paragraph 8, of the Decree-Law No. 21 of 15 March 2012, published in the Official Gazette 20 March 2014, No. 66
- Decree of the President of the Republic No. 85 of 25 March 2014: Regulation for the identification of the assets of strategic importance in the sectors of energy, transportation and communications, pursuant to Article 2, Paragraph 1, of the Decree-Law No. 21 of 15 March 2012, published in the Official Gazette No. 129 on 6 June 2014
- Decree of the President of the Republic No. 86 of 25 March 2014: Regulation for the identification of the procedure for the activation of the special powers in the sectors of energy, transportation and communications, pursuant to Article 2, Paragraph 9, of the Decree-Law No. 21 of 15 March 2012, published in the Official Gazette No. 129 on 6 June 2014.
Rules applicable to defence and national security sectors
In relation to the activities identified in the specific implementation decrees or activities actually threatening serious damage to the essential interests of defence and national security , in the event of:
- the purchase, in any capacity, of shareholdings in strategic businesses, specific conditions may be imposed in relation to the security of supply, the security of information, technological transfers, and the control of exports;
- shareholder or board resolutions for strategic businesses covering extraordinary matters, including, without limitation, the merger or the divestiture of the companies, the transfer of the company and/or assets, and the transfer abroad of the registered office, a veto may be exercised;
- the purchase, in any capacity, of shareholdings in strategic businesses by a person other than the Italian State, or by persons controlled by the Italian State, should the acquiring party come to hold directly or indirectly (including through the consummation of shareholder pacts), a level of interest in the capital with voting rights that is sufficient to compromise the defence and national security, the right to the opposition to the purchase may be exercised.
Rules applicable to strategic assets in the communications, energy and transportation sectors
In these sectors, Decree-Law No. 21/2012 defers to the cited implementation decrees the identification of networks, plants, assets and relationships of strategic importance, with respect to which any resolution, act or transaction placed into effect by a holding company, concerning changes in ownership, control or the availability of the strategic assets, is to be reported in advance to the government, which may veto those transactions that might give rise to exceptional situations that threaten serious damage to the public interests in relation to security and the operation of networks and plants, and to the continuity of supply.
Is there a list of all of the "State-owned enterprises "and the privatisations already completed?
The White Book on Privatisations, prepared in April 2001 is available on the Internet sites of the Ministry of the Economy and Finance (www.mef.gov.it) and the Department of the Treasury (www.dt.tesoro.it). The document contains qualitative and quantitative information about the operations completed by the Ministry of the Economy and Finance, the IRI Group and the ENI Group, starting in 1992.
The document also illustrates objectives, criteria, terms/conditions and results of the privatisations programme. The web sites also have the Reports to Parliament about privatisations, produced pursuant to Article 13, Paragraph 6 of Decree-Law No. 332/1994, converted by Law No. 474/1994, which also document all of the transactions after 2001.
Is there a calendar available for the privatisations in process?
The Internet site of the Ministry of the Economy and Finance (www.mef.gov.it) has published the 2014 Economic and Financial Document (EFD) and the 2014 EFD Update, each of which contains a chapter about the net borrowing and public debt; the programme for the sale of the equity investments held by the State is outlined in those chapters.