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 In Bulgaria until very recently
corporate governance and control were a perplexing and
unintelligible concept not only for the bulk of small shareholders,
who had acquired equity through mass privatisation, but also for
representatives of government institutions and private businesses.
Today, the importance of the problem, particularly for an economy
badly needing restructuring, is realised at the top government
level. As a result of the active efforts of the professional
community and the media, in Bulgaria meetings, discussions,
training workshops and sociological surveys were conducted, which
led to the first serious publications on corporate governance and
control.
This publication presents the state and the specific
problems of corporate governance and control in Bulgaria. It has
been prepared as part of the activities of the Corporate Governance
Initiative in Bulgaria, with the financial support of the US
Center for International Private Enterprise. Its principal
objective is to facilitate the implementation of modern standards
for corporate governance and also of procedures, which would
guarantee responsibility, accountability and transparency in the
economy and in the control mechanisms of the companies.
The current publication consists of two studies
analysing the trends in corporate governance in Bulgaria after the
first wave of mass privatisation and the initial stages of
concentration of ownership. These studies are focused on the major
characteristics and problems of corporate governance and corporate
control as well as on the expected consequences for the future of
corporate governance in Bulgaria. Among the findings of the studies
are the following:
Under the existing economic environment in Bulgaria
in most cases individual shareholders are passive. Shareholders are
not considered as a source of financial resources and are perceived
rather as a problem than a potential.
Public companies, which by definition have to ensure
maximum transparency of their operations practically, do not follow
this basic principle of corporate governance.
A characteristic feature of the structure of
ownership is the high degree of concentration.
The behaviour of privatisation funds in the
post-privatisation period indicates that they act more like
strategic investors than typical institutional investors. The
privatisation funds used various preliminary agreements in the
early stages of the privatisation process and by transforming
privatisation funds into holding companies acquired concentrated
corporate control.
The most significant conclusion, presented in the
publication, is that the emerging concentrated forms of control do
not facilitate the development of the capital market in
Bulgaria.
The authors of the publication are Maria Prohaska,
PhD, Co-ordinator, Economic Program, Center for the Study of
Democracy and Plamen Tchipev, PhD, Senior Research Associate,
Institute of Economics, Bulgarian Academy of Sciences
ISBN 954-477-079-8
© Center for the Study of Democracy. All rights reserved
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