Privatization in Russia as a sham “political” deal. Is it possible to return its parties (the state and the people) to their original position?

Federal Law No. 201-FZ of July 11, 2011 “On Amendments to the Federal Law “On the Privatization of State and Municipal Property”” (hereinafter referred to as the Privatization Law) introduced a new method of privatization - the transformation of a unitary enterprise into a limited liability company (LLC) . The amendments introduced by Law No. 201 Federal Law come into force on July 26, 2011.

What methods of privatization exist currently? The list of current methods of privatization of state and municipal property is established in Article 13 of the Law on Privatization:

• transformation of a unitary enterprise into an open joint-stock company;
• transformation of a unitary enterprise into a limited liability company;
• sale of state or municipal property at auction;
• sale of shares of open joint-stock companies at a specialized auction;
• sale of state or municipal property at a competition;
• sale outside the territory of the Russian Federation of state-owned shares of open joint-stock companies;
• sale of shares of open joint-stock companies through a trade organizer on the securities market;
• sale of state or municipal property through a public offering;
• sale of state or municipal property without announcing the price;
• contribution of state or municipal property as a contribution to the authorized capital of open joint-stock companies;
• sale of shares of open joint-stock companies based on the results of trust management.

Privatization of state and municipal property is a paid alienation of property owned by the Russian Federation, constituent entities of the Russian Federation, municipalities, into the ownership of individuals and (or) legal entities.

As you can see, the list of privatization methods is quite numerous, but the main groups of methods can be distinguished. This:

• transformation into an OJSC or LLC,
• sale of property at auction or competition,
• sale of shares at auction or on the securities market,
• contribution of state or municipal property as a contribution to the authorized capital of open joint-stock companies.

The procedure and conditions for carrying out various methods of privatization are given in Chapter IV of the Privatization Law.

Contest

State or municipal property can be privatized through sale at a competition if the buyer needs to fulfill certain conditions in relation to the specified property.

Such conditions may be: maintaining the number of jobs; preservation of the main purpose of the privatized object, the historical appearance of the buildings, and the profile of the enterprise; maintenance and financing of social facilities; established investment amounts. The competition is open in terms of participants. Proposals for the price of state or municipal property are submitted by competition participants in sealed envelopes. A competition in which only one participant took part is considered invalid.

The right to acquire state or municipal property belongs to the buyer who offered the highest price for the specified property during the competition, provided that such buyer fulfills the conditions of the competition.

Auction

If the privatization of state or municipal property does not establish that the buyer has fulfilled any conditions in relation to the privatized property, then it can be sold without

and
the auction
. The auction is open in terms of participants. Submission of proposals on the price of state or municipal property can be carried out in open or closed form. In a closed form, price proposals are submitted by auction participants in sealed envelopes. In an open form, offers on the price of privatized property are declared openly by buyers during the bidding process. If an open form for submitting proposals on the price of state or municipal property is used, then in the information message, in addition to the information specified in Article 15 of the Privatization Law, the amount of increase in the starting price (“auction step”) is indicated. An auction in which only one participant took part is considered invalid. Applications for participation in the auction must be accepted for at least 25 days.

Participation in the auction requires the applicant to make a deposit in the amount of 10 percent of the initial price specified in the information message about the sale of state or municipal property. The deposit amounts are returned to auction participants within five days from the date of summing up the auction results. The deposit will not be returned to the auction winner.

The right to acquire privatized property belongs to the buyer who offers the highest price for this property during the auction. The purchase and sale agreement is concluded with the auction winner within five days from the date of summing up the auction results.

The concept and principles of privatization of state and municipal property

Currently, relations related to the privatization of state and municipal property are regulated by the following legal acts:

1. Federal Law of December 21, 2001 No. 178-FZ “On the privatization of state and municipal property”;
2. Decree of the President of the Russian Federation of December 24, 1993 No. 2284 On the state program for the privatization of state and municipal enterprises in the Russian Federation";
3. Decree of the Government of the Russian Federation of August 12, 2002 No. 585 “On approval of the regulation on organizing the sale of state or municipal property at an auction and the regulation on the organization of state-owned or municipally owned shares of open joint-stock companies at a specialized auction”;
4. Decree of the Government of the Russian Federation of August 12, 2002 No. 584 “On approval of the regulations on holding a competition for the sale of state or municipal property”, etc.

The privatization of state and municipal property as the alienation for a fee of property owned by the Russian Federation, constituent entities of the Russian Federation, municipalities, into the ownership of individuals and (or) legal entities.

The legislation establishes a number of principles for the privatization of state and municipal property.

1. Privatization of state and municipal property is based on the recognition of the equality of buyers of state and municipal property and the openness of the activities of state authorities and local governments.

2. State and municipal property is alienated into the ownership of individuals and (or) legal entities exclusively on a reimbursable basis (for a fee or through the transfer into state or municipal ownership of shares of open joint-stock companies, into the authorized capital of which state or municipal property is contributed).

3. Privatization of municipal property is carried out by local government bodies independently in the manner established by the Federal Law “On the Privatization of State and Municipal Property.”

Privatization objects mean those state and municipal property that can be privatized in accordance with the Federal Law “On the Privatization of State and Municipal Property.” The objects of privatization in accordance with the Federal Law “On the Privatization of State and Municipal Property” do not include:

1. land, with the exception of the alienation of land plots on which real estate objects are located, including property complexes;
2. Natural resources;
3. state and municipal housing stock;
4. state reserve;
5. state and municipal property located outside the territory of the Russian Federation;
6. state and municipal property in cases provided for by international treaties of the Russian Federation;
7. religious buildings and structures with associated land plots and other state or municipally owned property for religious purposes, alienated free of charge into the ownership of religious organizations for use for appropriate purposes, as well as alienated free of charge into the ownership of all-Russian public organizations of disabled people and organizations whose sole founders are all-Russian public organizations of disabled people, land plots that are in state or municipal ownership and on which buildings, structures and structures owned by these organizations are located;
8. state and municipal property alienated into the ownership of non-profit organizations created during the transformation of state and municipal institutions;
9. property alienated by state and municipal unitary enterprises, state and municipal institutions, assigned to them under economic control or operational management;
10. state and municipal property alienated on the basis of a court decision;
11. shares alienated in cases provided for by federal laws, the Russian Federation, constituent entities of the Russian Federation, and municipalities have the right to demand redemption by a joint-stock company (Article 3 of the Federal Law “On the Privatization of State and Municipal Property”).

The alienation of the specified state and municipal property is regulated by other federal laws and normative legal acts adopted in accordance with them.

Privatization is also not subject to property classified by federal laws as objects of civil rights, the circulation of which is not permitted (objects withdrawn from circulation), as well as property that, in the manner established by federal laws, can only be in state or municipal ownership.

Specialized auction

A specialized auction is a method of selling shares at open auction, in which all winners receive shares of an open joint-stock company at a single price per share.

The specialized auction is open in terms of participants. A specialized auction in which only one participant took part is considered invalid. The single sale price is determined according to the following rules: a) when calculating the single sale price, only the funds of applicants admitted to participate in the specialized auction are taken into account; b) a single sale price is calculated in such a way that it ensures the sale of all shares put up for a specialized auction. The single sale price cannot be lower than the initial sale price.

Privatization of state and municipal property is carried out only by the methods provided for by the Law on Privatization (clause 5 of Article 13).

The method of privatization must be specified in the decision on the conditions for privatization of federal property. The method of privatization should be reflected in the information message on the sale of state or municipal property, which is subject to publication in the official printed publication (clause 2 of article 14, clause 3 of article 15 of the Law on Privatization).

The specialized auction is interregional

in the event that applications are accepted simultaneously in the territories of at least 15 constituent entities of the Russian Federation.
A specialized auction is all-Russian
if applications are accepted simultaneously in the territories of at least 25 constituent entities of the Russian Federation.

Interregional

a specialized auction can be held in the case of the sale of shares of an open joint-stock company, the net assets of which, according to the balance sheet for the financial year preceding the year in which the decision on the conditions for privatization of shares of the open joint-stock company was made, range from 500,000 to 3,000,000 minimum wages established by federal law at the time of making this decision.

All-Russian

a specialized auction can be held in the case of the sale of shares of an open joint-stock company, the net assets of which, according to the balance sheet for the financial year preceding the year in which the decision on the conditions for privatization of shares of the open joint-stock company was made, amount to more than 3 million minimum wages established by federal law at the time of adoption the said decision.

When conducting all-Russian and interregional specialized auctions, applications must be accepted in the cities of Moscow and St. Petersburg, as well as in the constituent entities of the Russian Federation in whose territories the issuer of shares put up for a specialized auction is located, and its structural divisions and subsidiaries, the number of employees of which is not less than 1,000 people.

Privatization: pros and cons

Privatization gives citizens freedom to dispose of the square meters on which they were permanently registered. In 1991, the government adopted a corresponding bill - Federal Law No. 1541-1. The first who began to convert housing from state property to private property were the inhabitants of dilapidated houses. Before this, square meters could only be exchanged on equal terms or with an additional payment.

“Another point is related to registration: if the housing does not belong to you, then you do not have the right to register your relatives and friends here. In privatized housing, the rule of “iron registration” was in effect. Elderly residents were finally able to bequeath an apartment to their children. Previously, it was necessary to resort to tricks in order to register at least one adult heir. And after the passing of the older generation, discord among the “legitimate” heirs began,” says lawyer Elizaveta Vladimirova.

Chronic debtors for housing and communal services also found advantages in privatization, because they can be evicted from a state apartment for long-term non-payment, but this is very difficult to do from a private apartment. There are two types of privatization: general and shared. In the first case, the square meters were jointly owned by two or more people registered on the square meters. Ownership shares were not determined using this method. It is acceptable for families where people live in peace and harmony. This practice was successfully used in cases where a friendly family lived in a privatized apartment and did not intend to sell the apartment and divide the property.

“But the division of property does not always end in peace. Anticipating this, it is wiser to use another method of housing privatization - with the allocation of shares to everyone participating in the process of transferring housing into private ownership. The Housing Code of the Russian Federation determines the procedure for the allocation and use of shared property,” says lawyer Elizaveta Vladimirova.

Privatization also has negative aspects. The disadvantages of shared ownership are clearly visible if a part is owned by a young child. In the event of alienation of housing, parents or guardians will have to resolve the issue with the guardianship and trusteeship authorities. Supervising government officials protect the interests of minors and may refuse to issue a deed of sale. It is possible to obtain permission, but such a decision is the prerogative of the court.

“A significant part of the Russian Federation’s residents are in no hurry to privatize housing, and there are good reasons for this: a family of several people, when resettled from dilapidated and dilapidated housing, will be given no less than 18 square meters per brother. But the owners of privatized “khrushchubs” have the right to rely only on privatized square meters,” explains lawyer Elizaveta Vladimirova.

Sale by public offering

If the auction for the sale of state or municipal property is declared invalid, then the sale of such property is carried out through a public offer.

Sales through a public offer are carried out using an open form for submitting proposals for the acquisition of state or municipal property during one procedure for conducting such a sale. In this case, the price of the initial offer is set at an amount not lower than the initial price indicated in the information message about the sale of property at an auction that was declared invalid. The cut-off price is 50 percent of the initial price set for the auction that was declared invalid. When selling through a public offer, the initial offer price is successively reduced by a “downward step” to the cut-off price. The right to acquire state or municipal property belongs to the participant in the sale through a public offer, who has confirmed the price of the initial offer or the offer price established at the corresponding “downward step”, in the absence of offers from other participants in the sale through a public offer.

If several participants in the sale through a public offer confirm the price of the initial offer or the offer price established at one of the “downgrade steps”, an auction is held with all participants in the sale through a public offer according to the established auction rules, which provide for an open form of submission of proposals on the price of the property. The initial price of state or municipal property at such an auction is the initial offer price or the offer price established at this “downward step”. If participants in such an auction do not submit an offer for a price that exceeds the starting price of state or municipal property, the right to purchase it belongs to the auction participant who was the first to confirm the starting price of state or municipal property.

A sale through a public offer in which only one participant took part is considered invalid. If the winner of a sale through a public offer evades or refuses to conclude a contract for the purchase and sale of property within the established period, he loses the right to conclude the said contract and the deposit is not returned to him.

Subjects of privatization of state and municipal property

The subjects of privatization include the persons listed below.

1. Buyers of state and municipal property are any individuals and legal entities, with the exception of:

• state and municipal unitary enterprises;
• state and municipal institutions;
• legal entities in the authorized capital of which the share of the Russian Federation, constituent entities of the Russian Federation, municipalities exceeds 25%, except in cases established by law (Article 25 of the Federal Law “On the Privatization of State and Municipal Property”).

2. Owners of state and municipal property – the Russian Federation, constituent entities of the Russian Federation, municipalities. On their behalf, the functions of the owner are performed by:

a) The Government of the Russian Federation, which:

• annually approves the forecast plan (program) for the privatization of federal property for the corresponding year;
• issues regulations on privatization issues;
• directs the work of federal executive bodies on issues of privatization of federal property;
• makes decisions on the conditions for privatization of federal property;
• exercises control over the privatization of federal property, etc.

b) Federal Agency for Federal Property Management, which:

• prepares and submits to the Government of the Russian Federation a draft forecast plan (program) for the privatization of federal property for the corresponding year, as well as a report on the results of privatization;
• carries out measures to prepare objects for privatization and transfers them for sale to the Russian Federal Property Fund;
• ensures the publication of decisions on the conditions for privatization of federal property, etc.

c) Russian Federal Property Fund, which operates on the basis of Decree of the Government of the Russian Federation of December 25, 2002 No. 925 “On the Russian Federal Property Fund” and performs the following functions:

• carries out the sale of federal property on behalf of the Russian Federation;
• provides assessment of federal property;
• concludes contracts for the purchase and sale of federal property
• maintains statistical and accounting records regarding funds received by the fund from the sale of federal property, etc.

d) executive authorities of the constituent entities of the Russian Federation; e) local government bodies

Sale without announcing the price

The sale of state or municipal property without announcing a price is carried out if the sale of this property through a public offer has not taken place

. In this case, the initial sale price is not determined and is not indicated in the information message about the sale of state or municipal property. Applicants send their proposals on the price of state or municipal property in a sealed envelope to the address specified in the information message. If proposals are received from several bidders, the buyer is the person who offers the highest price for state or municipal property. If several identical proposals are received for the price of state or municipal property, the buyer is the person who submitted the application earlier than other persons.