A law that mitigates or cancels administrative liability for an administrative offense or otherwise improves the situation of a person who has committed an administrative offense is retroactive.
By the resolution of the Deputy Chairman of the National Bank dated March 13, 2017, Joint Stock Company National Managing Holding K (hereinafter referred to as the Holding) was held liable for committing an administrative offense under Article 263 of the Administrative Code on the basis of repeated failure to comply with the obligation to disclose information in accordance with the procedure and on the terms determined by the legislation of the Republic of Kazakhstan. By the resolution of the Specialized Administrative Court of Almaty dated April 17, 2017, the Holding denied satisfaction of the complaint against the said resolution of the National Bank. It follows from the materials of the administrative case that the Holding was brought to administrative responsibility under Article 263 of the Administrative Code for violating the requirements of subparagraph 1) of paragraph 4 of the Rules for posting financial statements of the stock exchange, information on corporate events, financial statements and audit reports, lists of affiliated persons of joint-stock companies, as well as information on the total amount of remuneration on the Internet resources of the depository members of the executive body at the end of the year, approved by Resolution No. 26 of the Board of the National Bank of the Republic of Kazakhstan dated January 28, 2016 (hereinafter referred to as the Rules), due to non–compliance with the deadline for publishing information about a corporate event. The Holding's corporate event was the conclusion of an interested-party transaction on December 29, 2016. Based on the case file, the Holding published information about this transaction on the Internet resource of the financial reporting depository on January 5, 2017. In accordance with subparagraph 3) Paragraph 1 of Article 79 of the Law of the Republic of Kazakhstan "On Joint Stock Companies" dated May 13, 2003 (as amended on December 29, 2016), the company is obliged to inform its shareholders and investors about the following corporate events, such as the company's major transactions and transactions in which the company has an interest. Subparagraph 1) Paragraph 4 of the Rules stipulates that the relevant information must be posted by the joint-stock company within 3 (three) business days from the date of the corporate event. Paragraph 2 of Article 14 of the Law of the Republic of Kazakhstan "On Legal Acts" stipulates that the period, calculated in days (days), begins on the day after the calendar date or from the day (day) of the occurrence of the event, which determines its beginning, with the exception of constitutional periods, which begin on the day of the occurrence of the event specified in the Constitution of the Republic Kazakhstan, and expires on the last day (last day) of the established period.
According to the provision of Article 3 of the Law of the Republic of Kazakhstan "On Holidays", January 1-2 are public holidays. At the same time, article 5 of the said Law stipulates that if a weekend and a public holiday coincide, the day off is the next working day after the holiday. In connection with the above, the deadline for the Holding to post information about the corporate event dated December 29, 2016, calculated in business days, expired on January 5, 2016. Consequently, the conclusions about the Holding's failure to comply with the procedure established by law for informing shareholders and investors about a corporate event are unlawful. In addition, when bringing the Holding to administrative responsibility, the rules on the retroactive effect of the law on administrative offenses were also not observed. In particular, part 1 of Article 5 of the Administrative Code provides that a law that mitigates or cancels administrative liability for an administrative offense or otherwise improves the situation of a person who has committed an administrative offense is retroactive, that is, it applies to an offense committed before the enactment of this law and in respect of which an administrative penalty has been imposed. The Law of the Republic of Kazakhstan dated February 27, 2017 No. 49-VI "On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on improving civil and banking legislation and Improving Business conditions" amended subparagraph 3) of paragraph 1 of Article 79 of the Law "On Joint Stock Companies". According to the new wording of subparagraph 3) of paragraph 1 of Article 79 of the Law "On Joint Stock Companies", the company is obliged to inform shareholders and investors about the transactions made by the company only if they are also related to the acquisition or alienation of property, the value of which is ten percent or more of the total book value of the company's assets, as of the date when the authorized body of the company makes a decision to conclude such transactions. These changes entered into force on March 12, 2017. The subject of the interested party transaction concluded on December 29, 2016 between the Holding and JSC "P" was the cancellation of the accrued indexed debt on the principal debt in the amount of 407,999 thousand tenge. According to the balance sheet, the total book value of the Holding's assets as of December 1, 2016 amounted to 1,130,642,633 tenge.
At the same time, the amount of the Holding's related-party transaction was only 0.036% of the total book value of assets, which is significantly lower than the limit stipulated in the new version of the Law "On Joint Stock Companies", and the transaction completed by the Holding ceased to meet the requirements for mandatory publication. The resolution of the National Bank on bringing the Holding to administrative responsibility was issued on March 13, 2017, that is, after the entry into force of the provisions of the Law of the Republic of Kazakhstan dated February 27, 2017 No. 49-VI. These circumstances, by virtue of part 1 of Article 5 of the Administrative Code, also allow us to conclude that there is no element of an administrative offense in the actions of the Holding. In accordance with subparagraph 2) In part 1 of Article 741 of the Administrative Code, proceedings on an administrative offense may not be initiated, and those initiated are subject to termination in the absence of an administrative offense. Due to the above, the specialized judicial board of the Supreme Court overturned the decision of the Deputy Chairman of the National Bank of the Republic of Kazakhstan and the decision of the court of first instance. The proceedings on the case of an administrative offense against the Joint-Stock Company "National Managing Holding "K" under Article 263 of the Code of the Republic of Kazakhstan "On Administrative Offenses" have been terminated due to the absence of an administrative offense. The submission of the Chairman of the Supreme Court of the Republic of Kazakhstan is satisfied.
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