Major Shareholder’s Control of Kazakhstan Joint Stock Company Changes Rules

New Regulations Introduce Changes to Buyback Prices and Shareholders’ Rights

ASTANA, KAZAKHSTAN - The recent amendments to Kazakhstan’s laws have introduced significant changes to the rules governing joint stock companies. These changes aim to provide greater clarity and consistency in determining buyback prices and restrict shareholders’ right to request information about the company’s activities.

Changes to Buyback Prices

• The price at which a shareholder may request a buyback of shares has been redefined.
• Under the new rules, the price will be calculated based on either:
  • The average price of shares traded on the stock exchange over the last six months preceding the date of the transaction that resulted in the shareholder owning 95% or more of the voting shares.
  • The price of shares in a transaction that resulted in the shareholder owning 95% or more of the voting shares.

If the company’s shares are not listed on a stock exchange, the price will be determined as the highest of:

• The market price of shares as determined by an appraiser.
• The price of shares in a transaction that resulted in the shareholder owning 95% or more of the voting shares.

Restrictions on Shareholders’ Right to Request Information

The amendments have introduced restrictions on shareholders’ right to request information about the company’s activities. Under the new rules, joint-stock companies may refuse a shareholder’s request for information if it concerns:

• Financial statements and other information already published on the financial statements depository’s website.
• A document that has been requested repeatedly within the last three years, provided that the shareholder’s first request was fully satisfied.
• Documents related to past periods of company activity (more than three years prior to the date of the request), except for documents on transactions executed as of the date of the shareholder’s request.

Changes to Brokerage and Dealer Regulations

The amendments also allow brokers and dealers who do not keep client accounts as nominee holders but only engage in intermediary activities to be established as limited liability partnerships (LLPs) with mandatory formation of a supervisory board.

Conclusion

While the extent to which these changes will contribute to the development of Kazakhstan’s financial sector remains to be seen, experts believe that they represent a positive step towards regulating the country’s financial market and increasing confidence among market participants.