Senate for only transparent firms' access to public orders

Prague, March 20 (CTK) - The Czech Senate Wednesday voted for only companies with transparent owner structure to be permitted to seek public orders and subsidies, a provision the senators included in the government's bill regulating bearer shares, which the Chamber of Deputies passed in February.

The government's bill regulates bearer shares by binding firms to enter their bearer shares into a central depository or deposit them as bearer shares in paper form in a bank.

This will enable the identification of the owners by the police, state attorneys and judges, the government said.

If the companies failed to do so, bearer shares would be changed into registered shares as from next year.

The Senate, the parliament's upper house dominated by the left-wing opposition, has sent the modified bill to the Chamber of Deputies for a new vote.

Justice Minister Pavel Blazek (Civic Democrats, ODS) warned the senators against changing the bill, otherwise, he said, the Chamber of Deputies finally need not pass any version at all.

Anti-corruption organisations previously said the Senate modifications, if passed, would be at variance with the European directive on public orders that defines a list of criteria for companies to meet to participate in tenders, and does not enable its extension.

In addition, the modified bill does not handle situations where public orders would be sought by foreign firms that do not have their shares registered in a bank, the critics say.

Nevertheless, the Senate passed the modifications by 59 of the 70 senators present.

Senate public administration committee head Ivo Barek (Social Democrats, CSSD) said the government's bill formally abolishes bearer shares but in fact it does not abolish anonymous ownership of joint-stock companies.

"Anonymous owners can continue hiding through the deposited bearer shares, whose ownership can be changed quickly and uncontrollably," Barek said.

Many senators criticised the government's bill for proposing only limited access to the deposited shares. As a result, the bill will not help companies' owners to be uncovered easily, which many expected from it, the critics said.

CSSD senator Jiri Dienstbier said the bill is nothing but a cosmetic change that will not secure owners' transparency at all.

A deposited list of shareholders can be easily changed. The latent owners may transfer the shares to persons "somewhere in Luxembourg or Cyprus," Dienstbier said.