Indecon Consulting

[Uzbekistan] – State Property Management / Economic Reform

Assignment Name

Support to the Privatisation Process and State Property Management in Uzbekistan



Total Value

Large (> EUR 800K)




The project is based on an explicit request from the State Property Committee of the Republic of Uzbekistan called "GKI" for short (renamed to “State Committee of the Republic of Uzbekistan for Privatisation, Demonopolisation and Development of Competition” or "GKK" for short in November 2012 and currently called "State Committee of the Republic of Uzbekistan for Assistance to Privatised Enterprises and Development of Competition" also "GKK" for short since April 2017), a state organisation responsible for among other managing the state property, privatisation, private sector development and supervising the securities market, to provide support in improving the corporate governance framework, thus introducing effectiveness in the management of state property and boosting the stagnated privatisation. The assignment encompasses providing Support in drafting a new Law on State Property Management, reviewing the Law on Privatisation and the Law on Limited Liability Companies as well as providing support in drafting the Corporate Governance Code. The project’s main objective is to improve the legal and institutional framework necessary to consistently improve the corporate governance framework and to facilitate private sector involvement.

A detailed legal gap analysis was carried out identifying gaps and inconsistencies in among other the existing corporate legislation and the Civil Code. The identified issues were presented in a report (strategy) outlining international procedures, necessary amendments on various areas and administrative levels, among other banning / restriction of types and number of non-incorporated enterprises (being an open liability for the state budget), introduction of criteria for state commercial activities, general decentralisation of state responsibilities and liabilities, i.e. their allocation to lower levels (regions and municipalities), defining and strengthening rights and duties of management, supervisory boards and owner’s representatives, improving transparency by introducing disclosure of compliance statements for listed companies (trust building measures to boost the Stock Exchange activities), thus discussing the concept of a Corporate Governance Code. Following an extensive discussion a respective Law on State Property Management was drafted comprising the proposed solutions and including comparative analysis and implications on existent legal framework. Consensus-building activities with key stakeholders (primarily ministries) comprise presenting and discussing the content of the draft Law in different events. These events included a study tour and workshops with representatives of ministries, members of supervisory boards and representatives of the management of SOEs in order to directly address their questions, suggestions and representations. The draft Law on State Property Management was submitted to the Cabinet of Ministers in July 2013 and to Parliament in February 2014 where it passed the second reading in 2015.

Type of Services Provided

  • Review of the state portfolio (primarily incorporated and not incorporated enterprises, real estate);
  • Assessing the institutional and legal framework for managing the portfolio of state owned property, including shareholdings and assets;
  • Review of commercial legislation, gap analysis, recommendations for reforms;
  • Assessing Corporate Governance principles in Uzbek SOEs and making proposals for its improvement;
  • Preparing report (concept) defining: (i) state property, (ii) methods of acquisition of state property, (iii) methods of divesture of state property, (iv) criteria and objectives for property to be retained under state ownership, (v) guidelines on public corporate governance for SOEs, tools and mechanisms to increase their Performance;
  • Legal drafting (Law on State Property Management) and recommendations for amendments to the Law on JSC and Law on Securities, taking into account international best practice and preparing tables showing implications on other laws;
  • Consensus-building activities;
  • Preparing the development and subsequent implementation of updated Corporate Governance Policies based on international best practice;
  • Reviewing currently applied methods and legislation relevant to privatisation including the draft Law on Privatisation and providing specific comments on among other procedures on investment obligations;
  • Training measures for dissemination and implementation of (a) existing corporate governance principles, and (b) reforms contained in the newly drafted Law (workshops and study tours for public administration involved in exercising state ownership, members of supervisory and management boards as well as management of the Stock Exchange and the Securities Commission);