PRIVATIZATION PROCESSES AND CORPORATE GOVERNANCE

Abstract

The author presents the most important positions on the impact of privatization conducted on corporate governance in Macedonian conditions, based on 20-year study. The chosen strategy of the Macedonian model of ownership transformation failed to avoid the expected risk of excessive infiltration of the state in the process. That meant slowing down, but also its formalistic realization (especially the process of transformation in the first stage which is the process of formally converting social capital into state ownerships: the shares issued on the basis of social capital were simply transferred to the Privatization Agency of the further sale on the Stock Exchange). The strategy of privatization failed to avoid the second risk, as well – the process to be realized in a relatively unorganized way (in the initial period of operation without Stock Exchange), insufficiently controlled, irrational and unfair, which led to heavy spillover of the public resources in the hands of a few individuals and social groups. This is especially true for the so-called phase post-privatization, a term that is used nowhere in the law, but is often used by creators and implementers of privatization. The real meaning of this term is only to serve the blurring (justification) of another unnecessary process of selling shares because the first was unsuccessful. The integrated system possibility for the state to distribute its ownership in the privatization process and simultaneously to become the owner of shares in the privatized enterprises created conditions for the functioning of some sort of two-party system, whose operation was established and perpetuated precisely by this role of the state. As never before, it was not so transparent as the parties presented their own interests (or the interests of groups or individuals) as interests of the state - a representative of the community. Each of the two political coalitions that were changing in government during the implementation of the privatization process launched its "oligarchs" and "management groups" as their counterparts in the companies. Management structures during the process of privatization remained unchanged. Even when foreign capital entered in different ways and gained management rights, old socialist management teams remained to manage the enterprises. The opportunistic attitude of the syndicate unions towards the privatization (from complete denial as unconstitutional to support for the management teams in which the employees were members, as well) facilitated the role of the state towards distributing the ownership based upon political criteria, and for the managers created conditions to reduce their activity solely to owner consolidation of the companies which was euphemism for concentration of the capital in certain groups of managers and for excuse about the bad results of operations of the companies’ operations. The managers were oriented towards grabbing the capital, not to development of the companies in that period of privatization.