260 / 516
Changes Regarding the Distribution Companies:
Independent Member for the Board of Directors:
Under Article 5
of the Draft Law, it is indicated that the license holders whose tariffs
are subject to regulation, in other words the distribution companies,
shall have one independent member in their board of directors. The
assignment of the rights of those companies and the appointment prin-
ciples and functions of those independent members will be regulated
under a regulation.
Applicable Sanctions to Distribution Companies: Under paragraph
4 of Article 29 of the Draft Law, it is stipulated that the distribution
licenses cannot be cancelled. Accordingly, in the event that the distrib-
ution companies do not conduct their activities in compliance with the
legislation or impede their services or lower the quality grade on an
unsatisfactory scale, become insolvent or be in a position to become
insolvent, the following sanctions can be applied to those companies
by EMRA:
- dismissal some or all of the board members and appointment of
new ones,
- compensating the financial consideration of the unfulfilled ser-
vices and investments firstly from the incomes obtained from
other activities of such company, if not sufficient, from the div-
idend earnings of the shareholders and lastly from the assets of
the shareholders of the registered shares, and
- confiscation and transfer of the shares of such company to the
Treasury.
On the basis of the foregoing, EMRA will be deemed as the
addressee (defendant) of the claims which will be filed against the
board members appointed by EMRA to the board of directors of dis-
tribution companies due to their duties and in case of a decision for
compensation, such compensation will be borne by EMRA, with a
right to recourse.
246
NEWSLETTER 2012