In His Name
Legislation of the Supreme Council of the Application of General Policies of the Principle 44 of the IRI Constitution
Ministry of Economic Affairs and Finance (MEAF), Ministry of Cooperation, Ministry of Welfare and Social Security
In view of the joint proposal of the MEAF and the Ministry of Cooperation, and on the strength of Articles 34 and 38 of the Law Partially Amending the 4th Economic, Social and Cultural Development of Iran and the Application of General Policies of the Principle 44 of the IRI Constitution, approved in 2008 by the IRI Islamic Consultative Assembly, the Supreme Council of the Application of General Policies of the Principle 44 of the Constitution in its meeting held on February 15, 2009 approved the Executive Bylaw of Chapter Six of the aforementioned Law, dealing with the distribution of the Justice Shares as follows:
Executive Bylaw of the Justice Shares Distribution
Article 1) In this Bylaw, the following terms have the definitions detailed hereunder:
1. Law: the Law Partially Amending the 4th Economic, Social and Cultural Development of Iran and the Application of General Policies of the Principle 44 of the IRI Constitution, approved in 2008 by the IRI Islamic Consultative Assembly;
2. The Board of Divesting: the Board of Divesting subject of Article 39 of Chapter 7 of the Law;
3. Subjects of the Plan: Iranian Nationals, residing in Iran, including the following 6 deciles, which are to be scientifically identified:
- The lowest two deciles of income in the Country, villagers and nomads being prioritized; and
- Deciles 3-6, which shall be subject of the Justice Shares Divesting Plan.
4. Cooperative Companies of Cities: Companies established with the membership of the Subjects of the Justice Shares Distribution Plan in each city and have the duties of provision of services to the members and play roles in the administration of Provincial Investment Companies;
5. Provincial Investment Companies: Companies established and administered by the membership (shareholding) of the Cooperative Companies of Cities of each Province in the form of Private Joint Stock Companies on the strength of the Commercial Code, and subsequently attempt to be listed in the Stock Exchange and duly changed to the Public Joint Stock Companies. The ownership and management of the Justice Shares shall be delegated to the aforementioned Companies.
6. Justice Share: Shares of the lowest six deciles of the Country, which are divested to the Provincial Investment Companies, and in return, Provincial Investment Companies divest to the subjects of the aforementioned shares (members of Cooperative Companies) the amounts of those shares in the form of Provincial Investment Companies Shares.
Article 2) In the application of the Law and in order to develop the public ownership and provision of social justice, the IPO is required to divest up to 40 percent of the total values of the shares of the divestible SOEs in the market, subject of Group 2 of Article 2 of the Law, in view of the Legislations of the Board of Divesting to the Provincial Investment Companies, proportionate to the number of shareholders of the Cities Cooperative Companies in each province.
Article 3) Justice Shares shall be directly divested to the Provincial Investment Companies. The aforementioned shares shall be mortgaged to the IPO and shall be gradually released from mortgage in proportion to the deduction of the legal allowances and the installments paid.
Article 4) In the application of Article 35 of the Law, which organized the subjects of Paragraph A and B of the Article 34 of this Law in the framework of the Cities Cooperative Companies and the Provincial Investment Companies, the IPO is required to divest to the Provincial Investment Companies all the State Owned Shares, held by the Justice Shares Broker Company, with the same former price of divesting in proportionate to the number of members of the Cities Justice Cooperation Companies.
Note 1: IPO is required to arrange for the dissolution of the Justice Shares Broker and administer the same.
Note 2: The shares subject of this Article shall be subject to all the rules and regulations related to the Justice Shares.
Article 5) The divestible SOEs, shall be determined only out of the listed SOEs. The basis for pricing the shares of the listed SOEs shall be the price of the cash selling of the non-block shares, which shall be determined in view of the Bylaw of Paragraph 3 of Article 40 of the Law by the IPO and shall be approved by the Board of Divesting.
Article 6) The IPO is required to conclude contracts with the Provincial Investment Companies, including the necessary sanctions, to sell to such Companies the shares owned by the State and SOEs. The IPO shall explicate in the concluded contracts that the Transaction Price shall be settled out of the annual profits of the divested companies and the due measures shall be taken to settle the same and release that part of the shares, the price of which were collected by the IPO or are subject to allowances, in proportionate to the collected profits or the granted allowances and immediately subsequent to the same events.
Note 1: The shares divestible to the persons, who are subject of the divesting and placed in the lowest two income deciles, shall include 50 percent of allowance in the divesting price and shall be paid for in the ten-year installments. The subjects of deciles 3 to 6 shall only be entitled to the advantages of the maximum ten years of installments for the shares divesting and the Board of Divesting shall determine the duration of installments.
Note 2: The IPO shall be responsible for the collection of the installments of shares divested, subject of this Bylaw and settlement of the same to the Treasury Account and if the annual profits collected does not suffice the amount of installments to be paid during that year, the debts of the purchasers of shares shall be settled out of the profits to be collected during the following years.
Note 3: In case at the end of the installment period, the price of the divested shares are not totally settled, the purchasers shall be required to directly pay their debts and settle the price of shares they have purchased. Otherwise, the IPO shall release the purchased shares from mortgage in proportion to the amount of the price, formerly settled and collect its claims through the selling of remained shares in view of the regulations.
Note 4: Allowance subject of Note 1 of this Article shall be annually considered for in the account of the free aids of the State to the low-income layers.
Article 7) The Securities and Stock Exchange Organization, and the IPO shall be required to use the cooperation of the Securities and Stock Exchange Company and other related organs to facilitate the enlistment of the Provincial Investment Companies in the Stock Exchange by March 20, 2010.
Article 8) In order to manage the divested shares, the Provincial Investment Companies, may administer the affairs related to their shareholding rights in the Public Assemblies of the divested shares through the establishment of the Association (NGO). The Securities and Stock Exchange Organization and the related organs shall be required to grant permits for the establishment and activities of the aforementioned Association.
Article 9) The executive organs subject of Article 86 of the Law, shall not be authorized to take any measures to increase or continue the State ownership and management in the divested companies in proportion to the shares divested. These organs shall not be authorized to obtain permits for representation of Provincial Investment Companies in order to elect the managers of the divested companies, as well as the election of managers of Provincial Investment Companies and Cities Cooperative Companies. Moreover, acceptance of any managerial positions in the divested companies, Provincial Investment Companies, Cities Cooperative Companies and the Association dealt with in Article 8 of this Bylaw by the employees of the abovementioned executive organs shall be prohibited and the violators shall be duly dealt with in view of the applicable rules and regulations.
Seyed Shamsoldin Hosseini,
Minister of the MEAF and Secretary of the Supreme Council of the Application of General Policies of the Principle 44 of the IRI Constitution