Privatisation versus capital market: the corporate governance case of Bulgaria

The paper presents some of the results of a survey of ownership sructure. The survey uses the classic tradition in the treatment of the problem,stating that the means for effective control on the management of the enterprise are determined by the scale and the distribution of the shareholders’ participation in its capital. Later on this was used as a basis for the development of a methodological approach for practical surveys by authors like Cubbin & Leech (1983) and (Zeitlin 1974), and John Scott (1991. On the basis of this approach the main concepts for majority-minority control and the whole scale of derivative forms (mechanisms) such as the presence/absence of majority shareholder, the presence/absence of a second strong shareholder or group of shareholders in the capital of a company, the correlation between the capital in the hands of the biggest (the leading) shareholder and the others, and finally the general structure of shareholders’ participation are drawn. All of these determine the classification of one or another form of corporate control. The whole entity of specific forms of corporate control defines the structure of corporate control in a given country. Those criteria, taken not only in their temporal development, but in their national specifics, are analyzed in detail in the report. This focus of the report is predetermined not only by the scale and the influence of mass privatisation, but by the fact that initial dispersion of property was present in the mass privatisation, unlike all the other forms which in Bulgaria were based on direct techniques for transfer of property in the hands of one buyer. The most significant conclusion presented in the report is that the arising concentrated forms of control do not help for the development of the stock market in Bulgaria.