Decree No. 38 of 2015 Issuing the Executive Regulations of Law No. 37 of 2010 on Regulating Privatization Programs and Operations

Contents (10)

1. Executive Regulations of Law No. 37 of 2010 on Regulating Privatization Programs and Operations
2. Chapter One – Definitions
3. Chapter Two – Competences
4. Chapter Three – Valuation Rules and Procedures
5. Chapter Four – Procedures for Selecting the Winning Investor
6. Chapter Five – Training Programs for Employees Transferred to the Public Shareholding Company
7. Chapter Six – Conflict of Interest
8. Chapter Seven – Penalties Imposed on Joint Stock Companies Violating the Provisions of the Law, the Regulations, the Regulatory Decisions of the Council, and the Company's Articles of Association and Memorandum of Association
9. Chapter Eight – Use of State Real Estate Properties
10. Chapter Nine – General Provisions

Decree No. 38 of 2015 Issuing the Executive Regulations of Law No. 37 of 2010 on Regulating Privatization Programs and Operations

Article One

The provisions of the Executive Regulations of Law No. 37 of 2010 referred to above, the text of which is attached to this Decree, shall be applied.

Article Two

The Ministers, each within his own competence, shall implement this Decree, which shall come into force from the date of its publication in the Official Gazette.

Executive Regulations of Law No. 37 of 2010 on Regulating Privatization Programs and Operations

Chapter One – Definitions

Article 1

In applying the provisions of these Regulations, the following words and expressions shall have the meaning set out next to each of them:
– The Law: Law No. 37 of 2010 referred to above.
– The Council: the Supreme Council for Privatization.
– The Company: the joint stock company to which ownership of the Public Project is transferred.
– The Bureau: the Technical Bureau of the Privatization Program.
– The Investor: every joint stock company, or more than one, listed on the local capital markets, and other companies approved by the Council, to submit a bid for the Public Projects intended to be privatized.
– Media: the Official Gazette, local or foreign newspapers, or any other means approved by the Council for announcing the Public Project subject to privatization.
– The Regulatory Authority: the body designated or established by the Council in accordance with Article (7) of the Law.

Chapter Two – Competences

The Supreme Council for Privatization

Article 2

Subject to the provisions of the Law and these Regulations, the Council shall have competence over the following:
1- Setting the general policies for privatization operations.
2- Preparing a timetable of the Public Projects intended to be privatized and submitting it to the Council of Ministers for approval.
3- Designating or establishing the Regulatory Authority.
4- Providing the Council of Ministers and the State Audit Bureau, during the months of January and July of each year, with a semi-annual report on the work and activities it carried out during the preceding half year.
5- Issuing the decisions on the financial and administrative systems of the Bureau upon the proposal of the President of the Bureau.
6- Approving the model contracts that the Bureau prepares and that contain the basic terms and conditions that are required to be included in privatization contracts.
7- Selecting the specialized consultancy institutions that undertake the valuation of the tangible and intangible assets and the liabilities of each Public Project proposed for privatization.
8- Approving the results of the valuation of the Public Project after it has been submitted to the State Audit Bureau.
9- Issuing a decision to stop the privileges that the State provides to the Public Project.
10- Approving the participation of companies not listed on the local capital markets in the public auction for offering a percentage of not less than 35% of the Company’s shares.
11- Designating the government entities to which a percentage not exceeding 20% of the Company’s capital is allocated.
12- Determining the period within which ownership of the fractional shares not allocated to citizens, and of all shares not paid for by citizens, is transferred to the company to which the auction was awarded.
13- Issuing a decision granting the rights of the golden share, determining its voting privilege and the government entity that exercises these rights, and approving any amendments relating to its provisions in the Company’s memorandum of association or articles of association.
14- Announcing the incorporation of the joint stock company.
15- Converting a Public Project into a joint stock company all of whose shares are owned by the State in preparation for its privatization, exercising the competences of the constituent general meeting, the general meeting of shareholders and the extraordinary general meeting, and appointing its board of directors from among persons of competence and experience, provided that the privatization procedures of this company are taken within three years from the date of its incorporation.
16- Setting the rules and procedures that ensure that Kuwaiti employees who wish to work in the Company obtain the benefits prescribed in the Law.
17- Determining the minimum Kuwaiti workforce relative to the total number of employees of the Company, and the minimum aggregate share of this workforce’s wages in total wages, and setting the detailed conditions, procedures and time limits to which the Company shall be bound.
18- Considering whether shares in the public subscription for citizens are to be granted free of charge.
19- Determining the percentage of Kuwaiti employees in rare specializations and specialized technical work to which the Company shall be bound.
20- Imposing the penalties provided for in the Law and these Executive Regulations on violating companies after conducting an investigation and hearing the statements of the violating company.
21- Reviewing a report on the companies wishing to participate in the investment opportunities relating to the privatization of the Public Project, and approving the appropriate recommendation on completing the privatization procedures.
22- Approving the qualification documents prepared by the Bureau in cooperation with the government entity to which the project belongs.
23- Issuing binding decisions ensuring that companies competing with the Company comply with the workforce percentage provided for in Article (21) of the Law within the period determined by the Council.
24- Supervising the companies incorporated in accordance with the provisions of the Law.
25- Approving the list of names of qualified companies and consortia.
26- Approving the project tender documents and determining the fees for obtaining them.
27- Forming the Auction Committee.
28- Approving the recommendation to award the auction.

Chapter Three – Valuation Rules and Procedures

Section One – Procedures for Selecting Valuation Entities

Article 3

The valuation entity for the Public Project shall be selected by following the steps below:
1- The Bureau shall form a Joint Committee whose membership includes representatives of the Bureau and of the government entity to which the project belongs, in addition to any other specialized entities whose assistance is sought according to the needs and nature of each project. The committee shall prepare the documents and papers for submitting proposals, including the detailed terms of reference for the required work, studies and outputs in accordance with the requirements of the Law and these Regulations, and they shall be approved by the Bureau.
2- The Bureau shall announce in the Media the request for the appointment of valuation entities, provided that the announcement contains the following information:
a- The date of sale of the documents and the deadline for submitting proposals.
b- The date of the pre-bid meeting, or the mechanism for receiving inquiries and how they will be answered.
c- The qualifications and experience that the entities to be contracted with shall possess.
d- All information on the assets of the Public Project or the assets of the State-owned joint stock company that replaced the Public Project, with a general description of them, including the services or products it provides.
e- Any other information necessary to enable the entities to be contracted with to form their views of the work to be accomplished.
3- The Joint Committee shall examine the qualification applications and submit the results of the examination to the Bureau for approval and for setting the date for opening the financial envelopes.
4- The Bureau shall approve the results of the qualification evaluation and of the evaluation of the technical proposals submitted to it by the Joint Committee.
5- The Joint Committee shall open the financial envelopes of the applicant entities, prepare minutes on the award, and present the final results, including the recommendation to award to the valuation entity that submitted the best proposal, and refer the matter to the Bureau.
6- The Bureau shall submit to the Council a recommendation to award to the valuation entity that achieved the highest evaluation result, for approval and endorsement of the award, after completing the procedures of submission to the relevant regulatory authorities of the State, if required.
7- The approved valuation entity that achieved the best evaluation shall be invited to sign the contract with the Bureau.
8- Companies that have formed a consortium among themselves shall sign a memorandum of understanding designating the consortium leader responsible before the Council and the Bureau.

Section Two – Rules for Valuing the Public Project Where a Public Shareholding Company Is Incorporated through a Public Auction

Article 4

The valuation entity intended to be contracted with shall, in coordination with the government entity to which the project belongs and under the supervision of the Bureau, undertake the following:
1- Identifying the assets of the Public Project, provided that the assets are classified and categorized, in accordance with generally accepted accounting standards, into current, fixed and intangible assets.
2- Identifying the liabilities of the Public Project, making appropriate recommendations on what may be settled before the privatization process, and classifying them, in accordance with generally accepted accounting standards, into current and long-term liabilities.
3- Preparing a list of the contractual and legal obligations and their effect on the privatization of the project, with recommendations in this regard.
4- Preparing a financial report and an analysis of the performance of the Public Project during a period agreed upon at contracting, in accordance with the nature of each project.
5- Preparing a technical report on the assets of the project and their depreciation rates, with appropriate recommendations on their development, taking into account the useful life of these assets.
6- Assessing the position of the Public Project in the local market or in the markets in which it deals, with an analysis of its competitive position and historical development.
7- Identifying the segments of beneficiaries of the project’s outputs and their development.
8- Submitting a report on all the privileges, exemptions and support enjoyed by the project and their effect on the project’s performance, stating the consequences of stopping those privileges.
9- A statement of the State real estate properties used by the Public Project, with an estimate of the value of the right of usufruct, if any.
10- A comprehensive valuation of the Public Project on a technical and financial basis, following the internationally recognized best practices and standards in valuation.
11- Preparing the opening balance sheet in accordance with generally accepted accounting standards, provided that it is amended according to the outcome of the study and approval of the valuation of the project’s assets and liabilities.

Section Three – Rules for Valuing the State-Owned Joint Stock Company That Replaced the Public Project

Article 5

The valuation entity intended to be contracted with shall, in coordination with the government entity to which the project belongs and under the supervision of the Bureau, value the State-owned joint stock company that replaced the Public Project by following the steps below:
1- Submitting a full description of the company, including the following:
a- The company’s objects and objectives and the services it provides.
b- The contractual and legal obligations of the company.
c- The company’s assets, their categorization and classification in accordance with generally accepted accounting standards, and appropriate recommendations on their development or disposal.
d- The company’s obligations and the liabilities owed by it.
2- Analyzing the company’s performance during a period determined in the contract intended to be concluded with the valuation entity.
3- Submitting a report on all types of support, privileges and exemptions enjoyed by the company and their effect on the project’s performance, stating the consequences of stopping them.
4- A statement of the State properties used by the company, with an estimate of the value of the usufruct, if any.
5- Assessing the company’s position in the local market or the markets in which it deals, with an analysis of the competitive position and the sources of competition, if any.

Chapter Four – Procedures for Selecting the Winning Investor

Article 6

1- The Bureau shall form a Joint Committee whose membership includes representatives of the Bureau, of the government entity to which the project belongs and of any other specialized entity it deems appropriate, to supervise the privatization of the Public Project or the Company.
2- The Bureau shall announce in the Media the Government’s intention to offer the project through the participation of investors wishing to acquire the strategic stake, provided that the announcement contains the following information:
a- A general description of the Public Project intended to be privatized, or of the State-owned joint stock company that replaced the Public Project intended to be privatized.
b- A summary of the project’s outputs.
c- A summary of the beneficiaries of the project, whether the Government, the public or both.
d- The place for collecting the information brochure and the deadline for submitting applications.
3- The Joint Committee shall examine the expressions of interest and submit a report to the Bureau on the results of the examination.
4- The Bureau shall submit to the Council its opinion on the results of the examination of the expressions of interest, for the appropriate decision on whether or not to complete the procedures for the privatization of the project.
5- The Joint Committee shall prepare the pre-qualification or post-qualification documents for foreign companies, companies not listed on the Kuwait Stock Exchange and any consortium of companies, and submit them through the Bureau to the Council for approval.
6- The qualification documents shall contain, in addition to the data and information required from those wishing to qualify, the following information:
a- The general experience of the applicant for a period specified in the documents.
b- General experience in owning, implementing or investing in similar projects for a period specified in the documents.
c- Competent managerial and technical expertise necessary for operating and maintaining the project.
d- Financial solvency and the ability to secure the financing necessary for the project.
e- Any other criteria suited to the nature of each project.
7- The Bureau shall invite pre-qualification by an announcement in the Media containing the following:
a- A brief description of the Public Project intended to be privatized, or of the State-owned joint stock company that replaced the Public Project intended to be privatized.
b- A statement of the assets of the Public Project intended to be privatized, or of the State-owned joint stock company that replaced the Public Project intended to be privatized.
c- The mechanism for obtaining the documents.
d- The deadline for submitting qualification applications, which shall not be less than 60 days from the date of the announcement.
8- The Joint Committee shall receive the qualification applications and keep them in a safe place.
9- The Joint Committee shall examine and evaluate the pre-qualification applications in accordance with the technical, financial, legal and environmental conditions set out in the documents.
10- The Joint Committee shall submit the results of the evaluation to the Bureau, setting out a list of those qualified and another of those excluded, stating the reasons for exclusion.
11- The Council shall approve the list of names of the qualified companies or consortia, accompanied by the appropriate recommendation of the Bureau, which shall then announce the committee’s decision in the Media.

Article 7

1- The Joint Committee formed in accordance with the preceding Article shall prepare the request for proposals documents and submit them to the Bureau in preparation for their approval by the Council.
2- The offering of the investment opportunities shall be announced in the Media, including an invitation to the companies listed on the Kuwait Stock Exchange to apply to purchase the privatization documents of the Public Project or the Company.
3- The request for proposals documents shall include, in particular, the following:
a- A statement of the services provided by the Public Project intended to be privatized or by the Company.
b- A detailed statement of the assets, liabilities and obligations of the Public Project, or the audited balance sheets of the Company.
c- The model contracts and agreements relating to the project, which set out the terms of contracting with the government entity in accordance with the provisions of the Law.
d- The list of support, facilities or exemptions that the State will provide to the project, if any.
4- The Joint Committee shall receive and keep the proposals and submit a report to the Bureau on the entities that submitted proposals.

Article 8

1- The Council shall form an Auction Committee which shall hold sessions to open the financial envelopes of the qualified investors submitted for investment in the Public Project or the Company. The quorum required for the committee’s meeting to be valid shall be the attendance of the majority of its members, and decisions shall be issued by the majority of its members; in the event of a tie, the side of the chairman shall prevail.
The representative of the entity to which the Public Project belongs shall be invited to attend all the committee’s meetings and to participate in its deliberations, without having the right to vote.
2- The Bureau may, after the approval of the Council, offer the project in a single stage through a post-qualification procedure for companies not listed on the Kuwait Stock Exchange, other companies or any consortium among them. In this case, the offering of the project at auction shall be announced on the basis that, after the proposals are received, the eligibility of those submitting them is verified on the basis of the data and documents they are asked to submit with their proposals for this purpose. The announcement shall contain the following:
a- A summary of the project, its objectives and the terms of contracting, in accordance with the provisions of the Law.
b- A statement of the project’s assets and liabilities, and of the right of usufruct of State real estate properties allocated to the Public Project, if any.
c- How to obtain the project tender documents, including the post-qualification documents for submitting proposals by companies not listed on the Kuwait Stock Exchange, other companies or any consortium among them, and specifying the entity and place for obtaining these documents.
d- A statement of the amount to be paid to obtain the project documents.
e- How and where proposals are to be submitted, provided that they consist of two closed and sealed envelopes, one containing the financial proposal and the other the qualification application submitted by companies not listed on the Kuwait Stock Exchange, foreign companies or any consortium among them; the outside of each shall bear an indication of its contents together with the name and address of the bidder, and the said envelopes shall be deposited with the Bureau.
f- A statement of the final deadline, by date and hour, for submitting proposals, which shall fall at least 90 days after publication of the announcement in the Media.
3- Any investor may amend its proposal before the final deadline set for submitting proposals by submitting an alternative proposal on an official document in the same manner in which proposals are submitted; this proposal shall state that it is an alternative proposal, and it shall be submitted in the same manner prescribed for submitting proposals. No proposal may be amended, whether by increase or decrease, after the final deadline set for submitting proposals.
4- Auction proposals shall be submitted to the Bureau, and the Bureau shall make the necessary arrangements to receive the envelopes containing the financial proposals and keep them securely until the date set for opening them. These envelopes may not be opened except at the session set for this purpose.
5- The Auction Committee shall set a date for a public session to open the envelopes of the financial proposals of only those investors who have been qualified in accordance with Clauses (1) and (2), and all those who obtained the project tender documents, according to the Bureau’s records, shall be invited to attend the session.
If the legal quorum for the valid meeting of the Auction Committee is not met, the envelopes of the investors’ financial proposals shall not be opened, provided that minutes are prepared of their condition and the integrity of their seals, signed by the members of the committee present, and the session shall be postponed to the nearest date.
6- If a single proposal is received, or if the other proposals are not fit for consideration because they violate any of the conditions for participating in the auction, the Auction Committee shall prepare minutes thereon, to be submitted to the Bureau, with a recommendation either to accept the single proposal or to re-offer the project with or without amendment.
7- If two or more proposals are equal such that each of them represents the highest proposal submitted in value, an auction shall be held among them on the basis that each of them submits a proposal higher than its previous proposal. This proposal shall be submitted in a sealed envelope within a time limit whose end is set by the Auction Committee, and shall be deposited with the Bureau.
The Auction Committee shall open the proposals in a public session, and the value of the proposals shall be read aloud.
If the proposals are equal again, a draw shall be held among the bidders of the equal proposals, and the committee shall submit a report to the Bureau with a recommendation on the award of the auction, to be referred to the Council for its decision in this regard.
8- The award of the auction shall in all cases be subject to the approval of the Council, which may endorse the Bureau’s recommendation on the auction or reject all proposals and cancel the auction; it may also decide to hold a new auction. If the Council approves the award of the auction, the Bureau shall notify the winning investor in writing of the award of the auction to it, and the government entity to which the project belongs shall also be notified in writing of the result of the auction.
9- The winning investor shall be invited to sign the project contract and to submit the required guarantee according to the project tender documents within the specified period. The winning investor shall acquire no rights against the State except after signing the contract and submitting the final guarantee.
10- If the first winning investor withdraws or fails to sign the contract or to submit the required guarantee, the security it submitted shall be forfeited, and the Bureau shall submit a report thereon to the Council with a recommendation to re-offer the project or to award the auction to the holder of the next proposal in accordance with the auction conditions.

Chapter Five – Training Programs for Employees Transferred to the Public Shareholding Company

Article 9

The public shareholding company shall prepare a plan including training programs for the Kuwaiti employees transferred to it, which the Bureau shall review and approve, provided that it includes the following:
1- General programs: programs provided to all levels of the Kuwaiti employees transferred to it.
2- Development programs: programs aimed at developing the skills and specializations of employees, building their capabilities in the field of work and developing the skills of rare technical specializations.
3- Special programs: programs aimed at building the capabilities and performance of the supervisory levels working in the company.
The company shall bear the training costs and shall submit periodic quarterly reports to the Bureau on the programs implemented and the programs planned to be held in the future.

Article 10

The Bureau shall verify that the public shareholding companies implement the training programs prepared by the company for the Kuwaiti employees transferred to it to improve their performance, as well as the future programs and the vocational and technical training to qualify them.

Chapter Six – Conflict of Interest

Article 11

A conflict of interest is the situation in which a participant in privatization operations, or a person treated as such, is in a position where there is a likely suspicion that he obtains a direct or indirect private interest, benefit or advantage for himself or for others; or the situation that affects the participant’s ability to perform the duties and responsibilities of his position objectively and with integrity; or harming or causing loss to a party competing with the person or entity that the participant benefited.

Article 12

The following shall be deemed participants in the privatization procedures:
1- The chairman and members of the Council, their spouses and their first-degree relatives.
2- The advisers, experts, officials and employees of the Council and of the bodies and committees affiliated to it.
3- The President of the Bureau, all its employees and the advisers and experts whose assistance it seeks.
4- The employees of the valuation entities.
5- The senior officials, officials and advisers assigned by the government entity charged with incorporating the joint stock company.
6- The chief executive officer and the members of the board of directors of the joint stock company that replaced the Public Project—whether during the transitional period or after its privatization is completed—together with the advisers, experts and general managers working with them, all its employees and those whose assistance is sought.
7- The Prime Minister and members of the Council of Ministers, the Speaker and members of the National Assembly, their spouses and their first-degree relatives shall be treated as participants in privatization operations.

Article 13

Participants in privatization operations and persons treated as such are prohibited from the following:
1- Holding membership of the board of directors of, or owning 5% or more of the capital of, the company bidding at the auction.
2- Carrying out any commercial activity connected with privatization operations, for himself or in his capacity as agent, guardian, custodian or curator, whether for remuneration or without remuneration.
3- Providing any services or consultancy to any person or entity having interests connected with the entities in charge of privatization operations, whether directly or indirectly, for remuneration or without remuneration.
4- Attending any meeting or taking any decision in which he has a direct or indirect interest in privatization operations.

Article 14

Participants in the privatization procedures referred to in Clauses 2, 3 and 4 of Article (12) of these Regulations are prohibited from holding any position or entering into an employment relationship with any of the joint stock companies—during their work with the Council or its affiliated bodies or after it ends—for a period of not less than two years from the date their work ends, except with the reasoned approval of the Council.

Article 15

Participants shall not disclose any confidential information that reaches them, directly or indirectly, by virtue of their work, nor use such information for any private purpose, for a period of five years after leaving service.

Article 16

Every participant in privatization operations referred to in Clauses (1, 2, 3, 4, 5, 6) of Article (12) of these Regulations shall disclose any interest that may lead to a conflict of interest.

Article 17

The disclosure shall be made in writing to the Regulatory Authority within 15 days from the date on which the participant becomes aware that he is in one of the situations of conflict of interest, and the disclosure shall include the following elements:
1- The type of the conflict of interest.
2- The nature of the conflict of interest.
3- Identification of all related parties.
4- The private interests that are the subject of the conflict.
5- The aspects of its violation.
6- Any other elements set by the Regulatory Authority.

Article 18

The information disclosed by the participant in privatization operations shall be strictly confidential, and he may request that it not be revealed. In the event of a breach thereof, the aggrieved discloser may submit a complaint to the Council against the person who disclosed it.

Article 19

The Regulatory Authority, as soon as it becomes aware of the existence of a conflict of interest of one of the participants, shall verify its existence and notify the participant in writing of the subject of the conflict of interest within 15 days from the date it became aware thereof, and the participant shall respond on the matter within 15 days from being officially notified. In all cases, the participant shall disclose to that body all the information that he knows or believes constitutes a conflict of interest for him.

Article 20

The Regulatory Authority shall verify the disclosed data and notify the Council of its findings, and the Council may take one of the following alternatives:
1- Being satisfied with the disclosure.
2- Exclusion from participating in taking the decision.
3- Requiring the violating participant to dispose of his share in the matter that is the subject of the conflict.

Chapter Seven – Penalties Imposed on Joint Stock Companies Violating the Provisions of the Law, the Regulations, the Regulatory Decisions of the Council, and the Company’s Articles of Association and Memorandum of Association

Article 21

If the Company violates the provisions of the Law, these Regulations or the decisions issued in implementation thereof, or the provisions of the Company’s articles of association, or refuses to submit the documents, data and information requested from it, or submits data that is untrue or incomplete, the Council shall refer the Company to the competent investigation authority.
The investigation shall guarantee to the representative of the Company or the official to whom the violation is attributed that he is confronted with the violation attributed to him, that his statements are heard and that he is enabled to present his defense.
The investigator shall submit a detailed report including the investigation memorandum, a statement of the type of violation, its perpetrator, the evidence attributing it to him, a summary of his defense and his response to the charge, and the recommendation reached by the investigation. A complete copy of the investigation file shall be attached to the report, and the papers shall be referred to the Council to take the appropriate decision or penalty.

Article 22

Taking into account the nature and gravity of the violation committed by the Company, the Council may impose any of the following penalties:
1- Caution.
2- Warning.
3- Requesting the dismissal or replacement of the worker or employee.
4- Deeming the member of the board of directors responsible for the violation to have lost eligibility for membership of the board of directors.
5- Imposing financial penalties on the Company graduated according to the gravity of the violation, up to a maximum of 50 (fifty) thousand Kuwaiti dinars.
6- Dissolving the Company’s board of directors and appointing a commissioner to manage it until a new board of directors is elected, provided that the same decision includes calling the General Meeting to convene on a date not exceeding three months from the date of issuance of the dissolution decision.
7- Depriving the person who violates the conflict of interest rules contained in the provisions of Article (10) of the Law and these Regulations of the benefits he obtained in violation of their provisions.

Article 23

The penalty decision shall be issued by the Council with reasons, the persons concerned shall be notified with a copy thereof, and the papers shall be returned to the investigation authority to follow up the enforcement of the penalty.

Article 24

Without prejudice to criminal, disciplinary or civil liability, or to the penalties set out in these Regulations, a breach of any of the obligations and duties set out in the Law, in these Regulations, in the decisions or instructions issued in implementation thereof, or in the Company’s articles of association shall result in depriving the violator of every benefit, advantage or right acquired by him or that has devolved to him, or to the person for whose account the violation was committed, whether one of his first-degree relatives or a person acting by agreement with him even if not a relative, even if the violation is discovered only after he has left the position.

Chapter Eight – Use of State Real Estate Properties

Article 25

The State real estate properties related to the Public Project shall be specified in the privatization plan.

Article 26

The Company—which replaced the Public Project that was privatized—shall enjoy the right of usufruct only of the State properties on which the project is established, and it may not acquire ownership of them, mortgage them or create any right in rem over them.

Article 27

The joint stock company may add new objects or activities on State real estate properties to serve the project, after the approval of the Council.

Chapter Nine – General Provisions

Article 28

The government entity charged with incorporating the Company shall:
1- Determine the procedures for incorporating the joint stock company for each Public Project separately, in accordance with the provisions of this Law and the laws in force.
2- Draft and prepare the memorandum of association and articles of association of the joint stock company in accordance with the provisions of the Companies Law referred to above, taking into account Article (15) of the Law regarding the obligation of companies incorporated in accordance with the provisions of Islamic Sharia.
3- Without prejudice to the provisions of the Companies Law referred to above, and in particular the provisions of Article 153 thereof, the memorandum of association and articles of association of the company shall include a provision that the State shall hold a golden share in the ownership of the joint stock companies incorporated as a result of the privatization of a Public Project, such that the government entity designated by the Council enjoys a voting power enabling it to object to the decisions of the company’s board of directors and General Meeting in order to protect the public interest.
The Council shall determine the voting privilege of the golden share and the government entity that exercises it, and the provisions relating to the golden share may not be amended except with the approval of the Council.

Article 29

The privatization contract shall be signed between the competent government entity and the winning investor, provided that the investor undertakes not to request a change of the legal form of the Company, assign the contract or dispose of the shares it owns except after referring to the Council.

Issued on 15 February 2015 and published in the Official Gazette Kuwait Al-Youm on 22 February 2015.