The State Property Committee is responsible for more than privatization
Established in the days of the transition to a market economy, the State Property Committee (SPC) has outlived its utility in the eyes of many who want it disbanded before it becomes totally irrelevant and an anachronism. Others feel its role should change, and it can be made responsible for arranging public-private partnership under the Concession Law.
The Deputy Chief of the Committee, O.Erdenebulgan, answers our journalist’s questions.
Has the SPC selected the team to restructure and run the Mongolian Stock Exchange (MSE)?
We received 11 replies to our advertisement. We made a shortlist but two companies on it -- the South Korean Stock Exchange and a joint consortium of NASDAQ and MOSDAQ – did not meet our criteria. We are looking at other applicants as the restructuring of the MSE is of vital importance.
What about the London Stock Exchange (LSE)?
There are some favorable points in the LSE proposal, so we are talking with them. An LSE team is studying MSE operations.
What exactly do you expect from the foreign management team?
Our goal is to see the MSE as a mini London or mini Hong Kong exchange in three years. For this we need new operation procedures, new technology, and qualified professionals. The SPC has the task of raising money in domestic and foreign exchanges for strategic deposits. We are discussing preparatory arrangements in the Hong Kong and London exchanges. Dual registration of shares is part of the preparatory work.
When would you finally choose an Executive Director for Erdenes Tavantolgoi and an operator company for Tavantolgoi?
Three names have been shortlisted for the job and the final choice will be soon. Three companies -- two Australian and one German – are in the running to be chosen as the operator company.
How will the Development Bank be different from a state-owned bank?
It is all a question of prudent management. Our Development Bank will be run by a foreign management team to ensure independence. A Representative Managing Council has been formed. Ch.Khashchuluun, head of the National Development and Innovation Committee, will lead it and its other members are all people with experience of work in banks or the financial field.
How do we make sure the Development Bank will work successfully?
Good and open governance is the key.
The SPC’s main activity has been privatization. What companies are on your list now?
Our list for privatization between 2010 and 2012 includes Erdenezam and Tsakhilgaan Kholboo. An audit is on to estimate the market value of the state’s 57% share. However, privatization of state property is not our only responsibility. We have other work, too, and they are increasing.
State-owned companies work in a closed manner and there is little information on them. There is often criticism of them for unethical business practice and tender fraud?
The SPC has considerable achievements in strengthening corporate governance. All state-owned economic entities now publish their financial details and accounts on the website. Their planned purchases and expenses are also announced in advance. Some state-owned companies have 1-3 independent members from civil organizations on their representative managing councils. The SPC selects them in order to ensure openness.
How would the management issue be resolved in Erdenet, Ulaanbaatar Railway and MIAT?
I think they would resolved at shareholders’ meetings.
The Deputy Chief of the Committee, O.Erdenebulgan, answers our journalist’s questions.
Has the SPC selected the team to restructure and run the Mongolian Stock Exchange (MSE)?
We received 11 replies to our advertisement. We made a shortlist but two companies on it -- the South Korean Stock Exchange and a joint consortium of NASDAQ and MOSDAQ – did not meet our criteria. We are looking at other applicants as the restructuring of the MSE is of vital importance.
What about the London Stock Exchange (LSE)?
There are some favorable points in the LSE proposal, so we are talking with them. An LSE team is studying MSE operations.
What exactly do you expect from the foreign management team?
Our goal is to see the MSE as a mini London or mini Hong Kong exchange in three years. For this we need new operation procedures, new technology, and qualified professionals. The SPC has the task of raising money in domestic and foreign exchanges for strategic deposits. We are discussing preparatory arrangements in the Hong Kong and London exchanges. Dual registration of shares is part of the preparatory work.
When would you finally choose an Executive Director for Erdenes Tavantolgoi and an operator company for Tavantolgoi?
Three names have been shortlisted for the job and the final choice will be soon. Three companies -- two Australian and one German – are in the running to be chosen as the operator company.
How will the Development Bank be different from a state-owned bank?
It is all a question of prudent management. Our Development Bank will be run by a foreign management team to ensure independence. A Representative Managing Council has been formed. Ch.Khashchuluun, head of the National Development and Innovation Committee, will lead it and its other members are all people with experience of work in banks or the financial field.
How do we make sure the Development Bank will work successfully?
Good and open governance is the key.
The SPC’s main activity has been privatization. What companies are on your list now?
Our list for privatization between 2010 and 2012 includes Erdenezam and Tsakhilgaan Kholboo. An audit is on to estimate the market value of the state’s 57% share. However, privatization of state property is not our only responsibility. We have other work, too, and they are increasing.
State-owned companies work in a closed manner and there is little information on them. There is often criticism of them for unethical business practice and tender fraud?
The SPC has considerable achievements in strengthening corporate governance. All state-owned economic entities now publish their financial details and accounts on the website. Their planned purchases and expenses are also announced in advance. Some state-owned companies have 1-3 independent members from civil organizations on their representative managing councils. The SPC selects them in order to ensure openness.
How would the management issue be resolved in Erdenet, Ulaanbaatar Railway and MIAT?
I think they would resolved at shareholders’ meetings.
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