Notify Your Representative
The implementation and scope of the CLC Sections 183i to n makes this law a literally unprecedented violation of the basic human right of hundreds of thousands citizens (a conservative estimate) to use their property peacefully, and there is no doubt that this legal statute defies moral values of the civilized world. The impulse to pass the law in this form originated in the Chamber of Deputies (of the CR Parliament) but there is a legitimate suspicion that the constitutional officials who were involved in passing the law did not try to act in the interest this country’s citizens. It is therefore the highest time for the citizens to speak up. It would be helpful in the next steps if the affected citizens and shareholders contacted representatives and senators
in their voting districts and asked them what their position about the issues of the “squeeze out Czech style” is, so that we could see how concrete politicians uphold the interests of their constituents. For instance, it would be interesting to know about the particular representatives and senators:
- Whether they voted for or against passing the CLC Section 183i to n law in its original wording, in force since 07/01/2005, in its somewhat improved wording, in force since 09/29/2005, and in wording since 04/01/2008 that made the position of minority shareholders worse again (see the latest news from 07/01/2008),
- What their information was about the way and consequences of squeezing out shareholders before 07/01/2005, whether they know the reasons for the law revision from 09/29/2005, and what their opinion is about the reasons for the law revision from 04/01/2008 (for instance, current minister Necas (ODS) confessed in the press that he did not correctly evaluate that precious little information he had before 07/01/2005, and therefore he wanted the improved law from 09/29/2005 – if so, it would be interesting to know what he was thinking while approving the law that was put in force on 04/01/2008 and that worsened the position of minority shareholders in the Czech Republic again),
- Why they passed a law which, when used in the Czech Republic for review of compensation for shares (CLC Section 220k and 183k), does not employ the same principles as in neighboring countries (Austria and Germany), where, just as in the Czech Republic, the main shareholder determines and supports the amount of compensation with an expert valuation but where this advantage of the main shareholder is associated with his obligation to pay all the cost of the review process in which the minority shareholder does not have the burden of proof; the court investigates by its authority – unlike in the Czech Republic.
- Whether they are aware and what their opinion is about the fact that under the Czech concept of the review process, the costs of these proceedings exceed the potential gain for most of the injured shareholders, which practically means that majority of the injured shareholders cannot afford to get access to the court.
- Whether they have any idea when and in what mysterious way appeared in the Czech Republic experts for appraisal of companies, or rather their shares, and what credentials other than their license authorize them to call themselves “experts” in a situation when there is no mandatory course of study for experts that would require a final test in order to pass?
- Whether they even know and what they think about the fact that there are no legal provisions in the Czech Republic for determining so-called adequate compensation and consequently, Czech experts calculate the adequate compensation for shares any way they want (unlike for instance in Slovakia),
- What their position is about the fact that because there is no pertinent law, Czech experts had to create their own method for determining adequate compensation that is used also for a compensation review, and that they created the method during squeezing out shareholders, when they were paid for their expert valuations by main shareholders, which constitutes the most egregious conflict of interest anybody can imagine (and of course, the method is exactly as could be expected in such a situation).
- What their opinion is about the fact that according to the interpretation of German and Austrian courts, “adequate compensation” is a legal term whose determination is the court’s responsibility, while Czech courts pretend that it is exclusively an expert question and therefore, court reviews of expert valuations are done only through another expert and courts do not have a clue what, how and why experts calculate, so that there is actually no court review of pseudo valuation methods that experts use.
- What their latest information is about the quality and consequences of the pertinent law, and what steps they are going to take if they do not agree with this law (for instance, current Prime Minister Topolanek (ODS) admittedly apologized in the press for passing the law and said it was a mistake but did nothing to rectify it, rather to the contrary}.
It would definitely be useful to send a similar request for an explanation also to President Klaus who first encouraged citizens to participate in coupon privatization (at the time when he was still “only” Finance Minister of the CSFR) and then signed laws that deprive citizens, against their will, of their share in economic growth of the Czech Republic.
Please, send copies of responses from representatives, senators or maybe even Mr. President to the address OSMA, Charlese de Gaulla 9, 160 00 Praha 6 or through e-mail email@example.com . We will list all responses and we are sure they will be very useful for the next steps that the Defense Association of Small Shareholders (OSMA) plans.