CMA approves new governance guidelines of SOEs

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هذه الصفحة متوفرة بهذه اللغة: العربية

20 October 2020

MUSCAT (WAF)- Abdullah al-Salmi, EP of the Capital Market Authority (CMA), issued a decision to approve the principles of corporate governance for companies in which the Omani government owns stakes, except for “companies owned by Oman Investment Authority (OIA)”.

The new principles apply to companies registered in Oman that is controlled or influenced by the government, “regardless of the legal form of the company.”

The new regulations take into consideration any laws and royal decrees, as well as exempting publicly traded companies listed in the stock market and special-purpose vehicles (SPVs). State-Owned Entities (SOEs) under OIA are also exempted, yet OIA is to set its internal governance principles and mechanism.

The principles of corporate governance in which the government contributes include the disclosure of these companies of the financial statements quarterly via a platform approved by the Capital Market Authority. These SOEs, where the government owns 50% or more of their shares, must also publish an annual governance report. The governance report should include the members of the Board of Directors, their bonuses, compensation and privileges, and details of the financial burdens of the company bearing the responsibility of presenting services for non-economic purposes, as directed by the government.

“Commercial” or “Strategic” company

The newly-approved SOEs governance principles require these companies to specify the purpose of each company’s formation, whether it’s commercial and for economic goals or strategic and set to achieve specific goals on behalf of the government.

Strategic companies are to be registered as a “non-profit strategy”. And after serving their goals, these companies can be privatised or dissolved.

Government-controlled companies established for commercial or investment purposes or to make a profit should be formed as a “public joint-stock company or that the government specifies a specific period to convert it into a public joint-stock company.” In the event of converting the company to a public joint-stock company, the government can retain a “golden share” to preserve the public interest.

Board of Directors

Companies covered by the SOEs governance principals are bound to form a board of directors that does not include any member of the rank of minister or undersecretary. The board of directors must have independent members of no less than two and represent one-third of the members at least, with the requirement that one of the independent members can read the financial statements.

These independent members can’t be occupying any government position, or elected or appointed member of any of the Oman Council (the Shura Council and the State Council) or municipal councils, and can’t be working in any company in which the government has shares.

According to the decision to approve the principles of corporate governance in which it owns stakes, these companies are granted 12 months to incorporate these principles, except for the provisions related to the board of directors, “they shall be applied upon the first election of members of these boards.”