The policy has been changed to require government companies to obtain permission from the Ministry of Finance when taking loans. The “Guideline on How Government-Owned Companies Should Proceed in Taking Loans” developed by the Privatization and Corporatization Board has now been amended.
According to the amendment, government companies wishing to take loans must complete the requirements in the guideline, and after the company’s board decides to take the loan, they must send it to shareholders for approval. Once that approval is received, the guideline states that the company’s board must notify the Privatization and Corporatization Board within five days of approving the loan.
Under this policy, after completing the requirements in the guideline, the request for permission will be sent to the Ministry of Finance. Other state-owned business entities are also required to complete the requirements in the guideline and seek shareholder approval when taking loans. Additionally, it has been decided that the Privatization Board should classify companies based on the purpose for which the company was established and its capital, in consultation with the Ministry of Finance. The guideline also states that the remuneration for board directors of newly established companies should be based on the classification determined by the Privatization Board, in accordance with the guideline.
According to the policy, after the first year of the company, government-owned companies will be reassessed and reclassified in accordance with this policy. With this change, newly established government-owned companies will be classified by this board based on the company’s purpose and capital, in consultation with the Ministry of Finance.
