Article 16. The right of pre-emptive purchase of the company's securities The Law on Joint-Stock Companies

Home / RLA / Article 16. The right of pre-emptive purchase of the company's securities The Law on Joint-Stock Companies

1. A company intending to place declared shares or other securities convertible into common shares of the company, as well as to sell previously repurchased securities, is obliged, within ten calendar days after the date of the decision to do so, to invite its shareholders, by written notification or publication in Kazakh and Russian on the Internet resource of the financial reporting depository, to purchase securities on equal terms in proportion to the number of shares they hold at the placement (sale) price set by the company's body, who made the decision on the placement (sale) of securities. A shareholder may, within thirty calendar days after the date of notification of the placement (sale) of shares by the company, submit an application for the purchase of shares or other securities convertible into shares of the company in accordance with the right of pre-emptive purchase.

At the same time, a shareholder holding common shares of the company has the right of pre-emptive purchase of common shares or other securities convertible into common shares of the company, and a shareholder holding preferred shares of the company has the right of pre-emptive purchase of preferred shares of the company.

Payment for shares or other securities convertible into common shares of the company acquired by right of first refusal is made by a shareholder within thirty calendar days after the date of filing an application for their acquisition. The company's Articles of Association may provide for a different period for the payment of shares, which should not exceed ninety calendar days after the date of commencement of the placement of shares.

2. A financial institution that intends to place declared shares, as well as to sell previously repurchased shares in order to comply with prudential and other standards and limits established by the legislation of the Republic of Kazakhstan, at the request of the authorized body, it is obliged, within five working days after the date of the decision on the placement of shares, to invite its shareholders, by written notification or publication in Kazakh and Russian on the Internet resource of the financial reporting depository, to purchase securities on equal terms in proportion to the number of shares they hold at the placement (sale) price set by the company's body, who made the decision on the placement (sale) of securities. A shareholder may, within five business days after the date of notification of the placement (sale) of shares by the company, submit an application for the purchase of shares or other securities convertible into shares of the company in accordance with the right of pre-emptive purchase.

The payment of shares of a financial institution acquired under the right of pre-emptive purchase is carried out by the shareholder within five working days after the date of submission of the application for their acquisition. In case of non-payment of shares or other securities convertible into common shares of the company, the application is considered invalid after the expiration of the specified period.

3. The requirements on the terms of payment for shares or other securities convertible into common shares of the company acquired by right of first refusal, established by paragraphs 1 and 2 of this article, do not apply to cases of acquisition of shares by a state body authorized by the Government of the Republic of Kazakhstan to dispose of republican state property.

Payment for shares or other securities convertible into common shares of the company acquired by the right of pre-emptive purchase by a state body authorized by the Government of the Republic of Kazakhstan to dispose of republican state property is carried out within twelve months from the date of filing an application for their acquisition.

4. In case of non-payment of shares or other securities convertible into common shares of the company, after the expiration of the period specified in paragraphs 1, 2 and 3 of this Article, the application is considered invalid.

5. The procedure for exercising the right of the company's shareholders to pre-emptive purchase of securities and its waiver shall be established by the authorized body.

6. The right of pre-emptive purchase is not granted to the shareholders of the company when placing (selling) shares of the company when joining another company in accordance with the procedure provided for in Article 83 of this Law.

7. The Board of Directors of the company, based on a decision of the general meeting of shareholders or the articles of association of the company, may decide on the placement (sale) of shares of the company or other securities convertible into common shares of the company, without applying the requirements of paragraph 1 of this article in the following cases:

1) payment of remuneration to members of the Board of Directors of the company in shares or other securities convertible into common shares of the company;

2) encouraging the company's employees with shares or other securities convertible into common shares of the company;

3) conducting an initial public offering of the company's shares or depositary receipts, the underlying asset of which is these shares on a stock exchange operating in the territory of the Republic of Kazakhstan and (or) a foreign country.

The procedure, the maximum number and the time limits for the placement (sale) of shares of the company or other securities convertible into common shares of the company, without the right of pre-emptive purchase, are determined by a decision of the general meeting of shareholders or the articles of association of the company.

The Law of the Republic of Kazakhstan dated May 13, 2003 No. 415.

This Law defines the legal status, procedure for the establishment, operation, reorganization and liquidation of a joint-stock company; the rights and obligations of shareholders, as well as measures to protect their rights and interests; the competence, procedure for the formation and functioning of the bodies of a joint-stock company; the powers, procedure for the election and responsibility of its officials.

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Republic of Kazakhstan

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