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New law to restrict shell companies access to public tenders

An amendment to the Public Procurement Act approved by the cabinet on November 20 should restrict the access of these mailbox/shell companies to public tenders. The government wants to see the bill approved in parliament as soon as possible in order to enter into force as of January 1. The bill will allow only companies that will be able to disclose their owners up to the level of private persons to take part in public tenders. The only exception will be companies listed on stock exchanges in the European Union, the European Economic Area or the OECD, and their subsidiaries, Smer officials told TASR newswire.

An amendment to the Public Procurement Act approved by the cabinet on November 20 should restrict the access of these mailbox/shell companies to public tenders. The government wants to see the bill approved in parliament as soon as possible in order to enter into force as of January 1.

The bill will allow only companies that will be able to disclose their owners up to the level of private persons to take part in public tenders. The only exception will be companies listed on stock exchanges in the European Union, the European Economic Area or the OECD, and their subsidiaries, Smer officials told TASR newswire.

Bidders who provide false information regarding their ownership may be fined by €1,000-10,000.

“If a company features a public official holding more than 10 percent of the shares, this company will automatically be excluded from public procurement,” Prime Minister Robert Fico said.

However, the opposition members have some reservations concerning the bill. If it is approved in parliament, the public will not learn who owns half of Dôvera health insurer, Sieť party’s chairman Radoslav Procházka said at a press conference on the same day.

“The public has the right to know this mainly because such information may provide an answer as to why the Prime Minister, despite repeated promises, hasn’t come up with a unified health insurer – and never will,” said Procházka, as quoted by TASR.

The provision concerning stock exchanges can be bypassed by formally listing 10 percent of the company’s shares on a small stock exchange, while 90 percent of the shares will remain hidden, according to Procházka. Furthermore, he does not like the absence of independent supervision, as the situation will be evaluated directly by the tender organiser. The bill may also place an undue burden on domestic firms, he said.

Sieť Vice Chairman Miroslav Beblavý on November 19 stated that the public should know who is behind the company called Prefto [a co-owner of private health insurer Dôvera – ed. note]. He added that while the overpriced CT scanner in Piešťany hospital – which caused a huge scandal, involving health minister, speaker and deputy speaker of parliament loss of positions – cost “only” €1.6 million, Prefto and the Penta financial group last year drew more than €100 million from Dôvera.

(Source: TASR, Pravda)
Compiled by Zuzana Vilikovská from press reports
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Topic: Corruption & scandals


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