The VZMD is extremely concerned over the report that the Securities Market Agency (ATVP), Insurance Supervision Agency (AZN) and the Bank of Slovenia (BS) again issued »recommendations« and measures for non-distribution of profits in 2021 as well. Due to these measures, many companies have not been paying dividends and sharing profits with its owners despite many of them having reaped record profits. Instead of it, the ever growing bureaucracy is heading for a disaster on the capital market, shareholders and the pension insurance fund as well as the revenues from taxes, which will further deter investors from Slovenia and its increasingly crony or rather bureaucratic - planning anti-economy. The VZMD is again making a plea to all regulators who have been planning drastic general measures in the comfort of their offices to, by any means, show any expert analyses (?!) which would at least partly justify such decisions and measures.
The basic function of public limited companies is to generate profit (for owners-investors), which the shareholders in Slovenia mainly receive as dividends payments, usually based on dividend policies adopted in general meetings. "Such harmful and overall measures further undermine the trust in the Slovenian capital market and chase away investors and shareholders to other markets. Taking into account the fact that 2 million of Slovenian citizens have more than €24 billion in deposits in our banks, we should instead be focusing on solutions on how to gain over such funds to the capital market, to reinvigorate and spur growth of the real economy, as it is done in more developed and successful economies. Instead, Slovenian decision-makers and regulators have been introducing half-baked measures to strengthen the bureaucratic anti-economy or the state-planned economy, the one we have not witnessed for the last 50 years despite the fact that the capitalistic market economy was officially ushered in 30 years ago. Nonetheless, it seems that it is not even clear that owners instead of civil servants should make decisions on sharing or rather non-sharing of the profit in individual public limited companies," the VZMD president, Mr. Kristjan Verbič commented on Friday’s reports on the measures in question.
Last year, the VZMD welcomed the decision of the company KRKA, d.d., which ignored such harmful "recommendations" and paid the shareholders record dividends (totalling € 133.28 million), and now it has also become clear that such payout has not adversely affected their business operations since it successfully performed last year and has strengthened the trust of its investors - while the share price also sustained extreme growth. Unfortunately, the measures implemented by the regulators last year have prevented the payout of dividends (and a hefty inflow to the pension insurance funds and the revenues from taxes) by some of the prominent companies of the Ljubljana Stock Exchange, such as NLB, d.d., SAVA RE, d.d. (VIDEO), and ZAVAROVALNICA TRIGLAV, d.d. (VIDEO). Despite last year’s profit in the total amount of € 323.28 million - these three companies have moved away from the adopted dividend policies and the explicit assurances by their management. "Unfortunately, all this is a clear message to foreign funds and investors as well as our citizens who have been investing their savings into the Slovenian economy instead of hiding it under their mattress that they cannot count on their guaranteed annual income from securities in Slovenia – since at any time state bureaucrats can prohibit the well-earned dividends to be paid out – despite the fact that their investment has been generating great profits," Mr. Verbič concluded worryingly.
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