3.1 Transactions subject to approval

The following types of transactions are subject to preliminary consent given by the Department:

1. reorganization (merger, acquisition, conversion) of business entities (their associations), if this leads to creation of a business entity occupying dominant position;
2. liquidation of entities of natural and permitted monopolies;
3. merger, acquisition and liquidation of state and municipal enterprises, if this leads to creation of a business entity occupying dominant position.
4. acquisition by the business entity occupying dominant position of shares, stocks, participating interests in charter capital of another business entity that works to market with the same goods, as well as the purchase by any legal entity or citizen of a controlling package of shares, stocks, shares of a business entity with dominant position. The controlling package of shares, stocks, participating interest is such number that ensure more than 50% of direct or indirect votes in making decisions during the general meeting of shareholders, founders, stockholders.

go to top

3.2 Notification requirements

Pursuant to the Competition Law, no any notification requirements are provided.

go to top

3.3 "Group of persons"

As can be inferred from the provisions of the Competition Law, it defines a group of persons.

A group of persons is an aggregate of individuals and/or legal entities with one or more of the following features:

1. the business entities and the individual or legal entity if such individual or such legal entity has, by virtue of its participation in the business entity or in accordance with the powers received from other persons, more than 50% of the total number of votes in voting stocks (shares) in the charter capital of this entity;
2. the business entities in which the same person or the same legal entity by virtue of their participation in these business entities or in accordance with the powers received from other persons, more than 50% of the total number of votes in voting stocks (shares) in the charter capital of each of these businesses;
3. the business entity and an individual or legal entity, if such individual or such legal entity performs the functions of the sole executive body of this business entity;
4. the business entities in which the same individual or the same legal entity performs the functions of the sole executive body;
5. the business entity and the individual or legal entity if such individual or legal entity based on the founding documents of this business entity, or based on the contract executed with this business entity has a right to give to this business entity instructions for mandatory performance;
6. the business entities in which the same individual or the same legal entity based on the founding documents of these business entities, or based on the contracts executed with these business entities have a right to give to these business entities instructions for mandatory performance;
7. the business entity and the individual or legal entity, if by the proposal of such individual or such legal entity a sole executive body of this business entity was appointed or elected;
8. the business entities a sole executive body of which was appointed or elected by the proposal of the same individual or the same legal entity;
9. the business entity and the individual or legal entity, if by the proposal of such individual or such legal entity there were elected more than 50% of the number of members of the collegial executive body or board of directors (supervisory council) of this business entity;
10. the business entities in which more than 50% of the number of members of the collegial executive body and (or) board of directors (supervisory council) was elected by the proposal of the same individual or by the same legal entity;
11. the business entities in which more than 50% of the number of members of the collegial executive body and (or) board of directors (supervisory council) are the same individuals;
12. the individuals that are participants of the same financial industrial group;
13. the individual, his spouse, parents (including adoptive parents), children (including adopted children), blood and half-blood brothers and sisters;
14. the persons each of which based on any grounds in above mentioned items 1-13 is included into the group with the same person, and also other persons that are included with each of such persons into one group based on any ground mentioned in items 1-13.

Established prohibitions on actions (inaction) of the business entity, the business entities spread to actions (inaction) of the groups of persons.

go to top

3.4 General approval procedure

Pursuant to legislation, application for consent for economic concentration must precede the execution of transaction.

Department reviews the application documents and issues consent (or refuses to issue the consent) to liquidation or reorganization of entities in the cases as described above within 10 calendar days.

The procedure of giving consent to acquisition by the business entity occupying dominant position of shares, stocks, participating interests in charter capital of another business entity that works to market with the same goods or to purchase by any legal entity or citizen of a controlling package of shares, stocks, shares of a business entity with dominant position shall be established by the Government of the Kyrgyz Republic.

There is no state charge for filing an application. Due to uncertainty about the documents and information required by the Department, it may request the maximum scope of information on all entities of the group.

go to top

3.5 Implications of failure to obtain approval

Failure to obtain approval of the Department might lead to invalidity of the transaction, administrative fine of up to 2,000 KGS unless the actions are qualified as a crime due to the broad definition provided in the Criminal Code.

go to top