In the name of God
Decree No. 775/218/2/88 H, Date: April 5, 2010
the subject of clause (a) article (21) and section (4) of clause (b) article (40)
‘The Divestiture Board’
Ministry of Economic Affairs and Finance, President Deputy of Strategic Planning and Control Ministry of Justice, Parliament, Islamic Republic of Iran Chamber of Cooperatives, Iran Chamber of Commerce, Industries and Mines.
The Divestiture Board in its session of 6/2/2010 based on a proposal by the Iranian Privatization Organization (IPO) and according to clause (a) article (21) and section (b) article (40) of the ‘Law on Implementation of General Policies of Principle (44) of the Constitution’ and the decree No. 63/2/120696 which approved on 7/11/2009 by the Supreme Council of the ‘Law on Implementation of General Policies of Principle (44) of the Constitution’, has approved the Directive for selecting strategic customers and authenticating and monitoring their managerial competence in order to be assured of suitable management of those divested enterprises which are of particular importance in the after divesting duration by their buyers, as follows:
‘Directive for selecting strategic customers and authenticating and monitoring their managerial competence’
Article 1) Selecting strategic customers and authenticating and monitoring their managerial competence will be done according to this Directive.
Article 2) If the Iranian Privatization Organization identified any enterprises with each of the below characteristics and the Divestiture Board approved it, then the Iranian Privatization Organization (IPO) is obligated to mention the qualification of ‘selecting strategic customers and their managerial competence’ in their shares’ add and publicize it.
A – The proposed public enterprise’s total permanent staff (including formal, contractual or full-time arbitrary) and investment trust (a company that at least 50% of its share belongs to an upper generation proposed company) is more than 500 persons.
B – Fixed assets of proposed company are more than 1000 billion Rials.
C – The proposed company for divesting has at least one input or output exclusive market with more than 30% capacity of production or financial operation (according to the Iranian Privatization Organization report).
D – The proposed public enterprise is a knowledge based company or in needing of a great competence of managerial competences.
E – The proposed public enterprise is sensitive from national security perspective.
Article 3) The competence of management condition should be stated as one of the buyers’ obligations in divesting contract - as the subject of this directive - which is the subject of the Directive of ‘how to set the divestiture contracts including how determining the powers and obligations of the parties, collaterals and guarantees, the conditions of termination or annulment and how to apply discounts and crimes’, decree No. 2239113 which approved on 7/4/2009 by the Divestiture Board.
Article 4) The buyers in determining actually real or legal persons as the representative of their executive, board of directors or similar titles in the purchased enterprise, are obliged to respect the following features as appropriate. The buyers must immediately after registration in the registry of companies’ office, submit the minutes of general assembly sessions for determining of mentioned managers to the Iranian Privatization Organization (IPO).
1. Having at least five years of experience in the field of business of divested enterprise or seven years of experience in similar enterprises.
2. Having at least a bachelor’s degree in finance, economics, management or engineering and technical related fields.
3. Having the respectable reputation and financial health and lacking of any criminal convictions according to Article (62) of the Islamic Penal Code including the definitive sentence of culpable or fraudulent bankruptcy.
Article 5) if the buyers did not compliant with the obligations of this directive, the Iranian Privatization Organization is obligated after approval by the Divestiture Board and according to the divesting contract articles, to compel the buyers to do their compliances and changing the inappropriate managers and if they repeat it again, the Organization will terminate the contract and compel them to compensate for damages resulting from breaching of their obligations.
Article 6) In certain cases that the verification of applicants to purchase the shares at once and at block is subject to the approval of the Divestiture Board, the Iranian Privatization Organization in implementing the contents of the clause of article (21) of the mentioned Act and in accordance with the tendering session’s law – approved by the Parliament in 2004 - can establish a working group to identify and qualify buyers.
Note 1- The composition of the members of the working group under this article shall be determined by the Divestiture Board.
Note 2- After approving customers’ characteristics and requirements by the Divestiture Board, the Iranian Privatization Organization (IPO) will inform them and the related documents will be demanded and examined. In addition to the documents listed in the divesting ad, applicants must separately provide the documents of mentioned qualities to the Iranian Privatization Organization (IPO).
Note 3- Only those buyers whose eligibility has been confirmed by the task force of implementing this article will be eligible to participate in tender (either through the bourse or not) or negotiations and the requests of other applicants will be ignored.
Article 7) This Directive includes all methods of divestiture, which are subject of Article (19) of the Law on Implementing of General Policies of Principle (44) of the Constitution.
Sayyed Shamseddin Hosseini
Minister of Economic Affairs and Finance and the chief of the Board.