Property cheques still in circulation

New term for named property privatisation cheques set: until June 30th, 2019
New term for named property privatisation cheques set: until June 30th, 2019. The decision has been made by a Council of Ministers’ decree which comes in force on July 1st. Recent cheque privatisation was continued for three years in 2013 and the State Property Committee expects this is the last opportunity.

There is no straightforward answer to the question as to whether citizens should keep these colourful papers, depicting the Mir Castle, at home or invest them in a business. Property cheques are injected into a certain company via buying shares. The circulation of securities is viewed as a risky business. Moreover, once invested, cheques could not be re-injected or returned so losses are possible. Moreover, it’s no longer possible to exchange property cheques for accommodation cheques and, unsurprisingly, people are cautious. According to the Deputy Head of the State Property Committee’s Main Department of Property Relations, Anna Kornievich, 39.7 percent of unused cheques are kept by individuals: around 170m in total. At the same time, it’s unwise to wait for any drastic changes. “It’s important to understand that cheques are not securities which bring profit in themselves. They are documents which give a right to buy state property without charge,” she explains.

The list of privatised companies for which shares can be exchanged for property cheques is to be found on Belarusbank’s site. However, it’s only possible to conduct an exchange at one’s place of residence; with this in mind, it’s logical to check lists at local bank offices. As of January 2016, these lists included famous companies, such as Pruzhany’s Linen Mill, Oranchitsy’s Poultry Factory (Brest Region), Vitebsk’s Motor Repair Plant, Polotsk’s Milk Factory (Vitebsk Region), Rechitsa’s Thermoplast Plant, the Polespechat Factory (Gomel Region), Lida-Agrotechservice, Volkovysk’s Housing Maintenance Service (Grodno Region), Radoshkovichi’s Belkhudozhkeramika (Minsk Region), Tourist Hotels and Chausy’s Plant of Concrete Products (Mogilev Region). Other companies include district agrarian services, transport and construction joint stock companies. Only Minskers seem to have a poorer choice: Minskselstroy, Zaslavlburvod, Avtospetsstroy and Belstroyremont.

Ms. Kornievich explains that this situation is also caused by the small amount of activity demonstrated by cheque holders. “A small number of stock companies whose shares could be exchanged for property cheques is explained by the fact that new shares appear only as demand grows. In addition, in line with the Law on Privatisation, we can only offer for exchange the shares of companies which were established before January 1st, 2011. Securities of firms set up after this date are not subjects for exchange.”

Ideally, it would be great to have an opportunity to exchange cheque for assets of profitable companies which bring high dividends. However, the global crisis dictates its own rules. In reality, the lion’s share of the profit is allocated by companies to their own development rather than dividend payment. This is a contribution to the future. The present prolongation is an element of this contribution. Completing the cheque privatisation this year would have required payment of compensation for non-used cheques. Their holders are paid Br4,400 per cheque and are unlikely to benefit much. Meanwhile, the loss of over Br700bn would have negatively affected the country’s economy. The crisis might end in three years and the list of joint stock companies might look more attractive. 

By Maxim Osipov
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