Decree No. 1278/2012 creates a new regime applicable to directors appointed by the National State in corporations in which it has equity participation.
In 2008, by means of Law No. 26,425 enacted by the Argentine Congress the pension funds system (AFJPs) was terminated and a state-run integrated social security system was created. The equity held by the AFJPs was transferred to the Sustainability Guarantee Fund of the Public Social Security System (the "Fund") managed by Argentina's Social Security Agency ('ANSES').
As a result of the nationalization of the AFJPs the Fund acquired minority stock participations in several publicly traded corporations listed in the stock exchange. Such stock entitles the Fund to exercise political, social and economic shareholder rights, including the right to vote the appointment of directors and statutory auditors of such corporations. In some cases, the Fund has a sufficient majority of votes to appoint one or more directors and/or statutory auditors.
On July 25, 2012 the Executive Branch enacted Decree No. 1278/2012 (the "Decree") the main purpose of which is to organize the holdings of shares of these corporations and to create special rules applicable to the directors and legal representatives appointed by the National State in such corporations.
The Decree centralizes the administration of such stock participations in the Secretary of Economic Policy and Planning for Development of the Ministry of Economy and Public Finance ("Secretaría de Política Económica y Planificación del Desarrollo del Ministerio de Economía y Finanzas Públicas") currently in charge of Axel Kicillof (the "Secretary"). The Decree provides that the Secretary will determine the policies and actions that will be implemented regarding the stock held by the National State, including those held by the Fund.
The Decree provides that the Secretary should perform the following acts regarding the State owned stock:
Communicate assistance to shareholders' meetings and make any other communication required to exercise the shareholders' rights. Appoint representatives of the National State in the respective shareholders' meetings. To give voting instructions to the representatives of the National State for the shareholders' meetings. To exercise the information rights granted by the equity interests, and to make requests to the corporate bodies for the access and/or copy of books and documents of the...