A bill proposing the introduction of mandatory dividend payments has been met with disagreement on the part of the opposition as well as government officials and ministries, though according to a high-ranking official it actually points to a very real problem in the Estonian economy.
The bill was initiated by Liisa Oviir of the Social Democratic Party, along with 21 other members of the Riigikogu from different parties. It calls for a requirement for profitable businesses to pay out a dividend each fiscal year, a right for shareholders to exit a company, and tightening requirements to management boards to provide information to shareholders.
The measures would mainly back small shareholders in private enterprises, who at this point have little to no influence in the decision whether or not a profitable business pays out dividends.
One of the Ministry of Finance's deputy secretaries-general, Dmitri Jegorov, said on social media that the direction the bill takes emphasises an actual issue in the Estonian economy, where the rights of minority stakeholders even to operative information are currently very limited.
This, according to Jegorov, has legal as well as illegal consequences.
"We all know how easy it is for a majority stakeholder to get money out of the business, both legally and less legally," Jegorov wrote in his post on social media. "They cover themselves with a fig leaf in terms of the investment requirements, and at the same time do only the absolute required minimum to inform minority stakeholders. And they legally and illegally buy goods and services from companies they are personally connected with."
Expensive cars, holidays dressed up as business trips with their partner, or their mistress, who also works at the company as a secretary, pushing around plots of land the taxman can't always check 100%, activities of this kind might be the sort of thing on which a minority stakeholder wouldn't want to see the company's resources spent, Jegorov added.
Still, Oviir's bill has the potential to make the Estonian economic environment less stable, and might cause problems elsewhere as well.
The Finance Ministry officially rejects the bill, and so do the Justice Ministry and the Ministry of Economic Affairs and Communications. The changes the bill is calling for would damage the stability and legal certainty of Estonia as an environment for businesses, they all agree. Originally to be discussed in today Thursday's government meeting, the bill is apparently no longer on the agenda, ERR's Estonian online news reported.
Oviir, who is spearheading the effort, will soon have to resign from the Riigikogu, as her fellow Social Democrat and outgoing minister of IT and entrepreneurship, Urve Palo, will rejoin the national parliament.
Editor: Dario Cavegn