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A new blow to the legal system and order in Serbia

The Ministry of Economy has stricken a new blow to the legal system and order in Serbia by trying to present that persons whose term of office as acting directors of public companies has expired continue to perform those functions legally.

In the report from the public debate on the Draft Law on Amendments to the law on the Registration Procedure in the Business Registers Agency, the Ministry of Economy stated that the Registrar (APR) does not can automatically delete data on persons authorized to represent public companies after the expiration of the period for which they were appointed (termination of mandate) because, as the ministry claims, their mandate does not end by law, but it is necessary to issue a decision on dismissal. TS proposed that the law explicitly prescribe that the mentioned data be deleted automatically in the public debate.

The publicly stated position that for the termination of the function of the acting director of a public company, it is necessary that “the competent authority issues an act on dismissal of the acting director, bearing in mind that there is no legal provision stipulating that the position of the acting director of the public company ceases by law (ex lege) upon the expiration of the prescribed deadline”, the Ministry of Economy showed an enviable degree of ignorance of the Law on Public Enterprises, which that ministry drafted and whose application it is obliged to monitor.

The law explicitly stipulates that the director’s term of office ends upon the expiration of the period for which he was appointed. In such cases, the ministry is obliged to establish that public companies are managed illegally. Had the legislator wanted the office of the acting director to last until the appointment of a new director or acting director, it would have prescribed that and not limit the maximum duration of the mandate.

The following examples can illustrate the absurdity of this attitude and the danger to the legal order: if applied consistently, the mandate of the President of the Republic or a judge of the Constitutional Court would end only with a decision on dismissal after the expiration of the term and not, as the Constitution and laws guarantee, by the expiry of the period for which they were elected.

All of the above is happening even though there is case law, embodied in the judgment of the First Basic Court in Belgrade from 2019, according to which “based on Article 52 paragraph 2 of the Law on Public Enterprises, which specifies that the acting status must end after two terms of six months ... that status expired for Mira Petrovic (acting director of the PE “Post of Serbia”)“and that ”the decisions by which a group of workers were issued a three-month suspension from work – according to which they were paid a salary in the amount of one-third of the basic salary – were annulled because, as the court states, they were made by an unauthorized person“.

We recall that, according to the latest research of Transparency Serbia, out of 34 companies to which the provisions of the Law on Public Enterprises on the election of directors apply, only eight have directors elected at the competition, 18 are headed by acting directors whose term of office has expired, in three acting directors are within the legal deadline, while in others, acting directors are appointed without competition, or it is impossible to determine who is the director and since when.