Subsidiary companies now have risk management commissions

The companies in which the state has a stake will now have specialized committees to reduce the risk of high indebtedness and evaluate the investment.

The initiative stems from the implementation of the innovations introduced in the framework of the Law on the State Business Sector (SEE), which, in addition to public companies, now also includes subsidiaries.

In recent statements, Raimundo Matule, administrator of the Institute for the Management of State Holdings (IGEPE), explained that, under the new law, all public companies now have a general assembly, which leads to the need to report to the shareholder, in this case, represented by IGEPE.

"Another aspect is that specialized commissions are being introduced, such as the investment commission. This is an outside entity that makes it so that, for example, if a company wants to invest it has to sit down with the commission to evaluate that investment," Matule maintained.

The risk management and debt committees, on the other hand, are tasked with taking care of the propensity of excess debt in the State Business Sector.

"This commission has the obligation and mandate to evaluate the debt levels of the company, but we are evaluating the degrees of authorization of those debts. What used to happen is that the Board of Directors would decide alone whether to go into debt, for example, by ten, fifty, or 100 million dollars without anyone being able to say no. Now we are establishing levels of authorization for indebtedness," Matule maintained.

According to the source, for working capital investment, the competence lies entirely with the company, but long-term strategic investments have to be decided by IGEPE, in a general assembly.

"If it's an investment requires the indebtedness of the country, then the matter has to go to the Minister of Finance and the Council of Ministers. We know that right now, as a country, we are at an extremely high level of overall indebtedness, so we need to control the indebtedness of state companies so that we don't worsen the public debt situation.

 There are now three levels for a company to decide to invest," noted Matule. The other innovation, according to the IGEPE administrator, is that any sector or ministry could decide to create a company. The new law has completely abolished this hypothesis, so that only the Council of Ministers can create a state company, after a proven technical, financial and environmental feasibility study.

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