Wednesday, March 10, 2021

Companies with Mixed Public-Private Ownership in Ethiopia: Analysis of the Legal and Practical Problems

Companies with Mixed Public-Private Ownership in Ethiopia: Analysis of the Legal and Practical Problems

Abstract:

The crux of this paper focuses on the formation and corporate governance aspects of Companies with Mixed Public/Private Ownership. In so doing, it has looked at the major driving factors that explain the emergence of Mixed Ownership Companies and explore the corporate governance of the same. It is found that the major factor that gives rise to the Mixed Ownership Company in Ethiopia is the partial privatization of State-Owned Enterprises. The study has looked at the corporate governance aspects of Mixed Ownership Companies mainly from the standpoints of the companies’ shareholding structure, the composition of the Board of Directors, employment relations, and pre-formation agreements. Based on these, the thesis argues that Ethiopia needs to revisit the existing practice and give proper concern to the corporate governance of Mixed Ownership Companies. By and large, the study finds that the process of forming and running of Mixed Ownership Companies in Ethiopia is problematic in every step. The main contributor to these problems is found to be the Government’s lack of clear strategy towards the formation of Mixed Ownership Companies. Legal and practical problems are also carefully discussed. To this effect, different legislations related to the area, the practices of formation and governance, as well as the institutional infrastructure of the Government are explored.

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