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Public undertakings

Public undertakings and enterprises of the public sector (which includes companies formed under private law with the participation of public authorities, known as public private partnerships) are confronted with increasingly complex issues and problems. The many issues relevant for public undertakings are, for instance, the general requirements such as economic efficiency, effectiveness or transparency as well as special challenges (e.g. the conversion to double-entry bookkeeping (“Doppik”), ensuring “good” public corporate governance or examining the use of funds). Valuation issues – e.g. in connection with the sale of participations by public authorities – are also becoming a focus of interest.

4P – Privatisation and public private partnership

The valuation of companies in which public authorities participate – public private partnerships – for the purpose of privatisation requires an objective analysis. However, to avoid risks entailed in a company valuation, the peculiarities of budget law, European law and specific features must be observed when awarding the public contract. A risk that frequently occurs in this connection is the danger of covert aid as defined by Art. 107 of the Treaty on the Functioning of the European Union. This risk arises during the respective financial transaction if the state-owned shareholder sells its shares at an excessively low price or buys them at an excessively high price. Another challenge in this respect is the assessment of management performance and intangible assets. Our 4P approach includes the examination of the adequacy of the transaction price if the valuation was not carried out by an independent expert. We offer tailored and coordinated concepts for all valuation services within the scope of our 4P approach.

At this point we would be pleased to inform you of selected issues and problematic areas in connection with public undertakings.

Your contacts on the topic of public undertakings at Kleeberg are:

Please contact us – we would be pleased to advise you!

Public undertakings often have supervisory boards or advisory boards whose tasks are becoming increasingly challenging. In addition to the Public Corporate Governance Code (PCGK) of the federal government, there is also a series of comparable codes at the level of the federal states and local authorities. They all emphasise the responsibility of supervisory bodies in performing their supervisory role, among other things. Furthermore, issues are becoming more and more complicated on account of the complex framework conditions in the public sector. Supervisory and advisory board members must therefore always have an up-to-date level of knowledge in the areas of accounting, taxation and also corporate governance. This is the only way they can ensure that they perform their duties properly, responsibly and with due care. The trade journal “BOARD – Zeitschrift für Aufsichtsräte in Deutschland” (publisher: Bundesanzeiger-Verlag) therefore has a special column in each issue that is concerned with these particular challenges. Kleeberg is often represented in this column as a regular cooperation partner of BOARD. Furthermore, BOARD 5/2013 was a special issue on the subject of public undertakings. BOARD 6/2014 will again be dedicated to this topic.

Specifically addressing the public corporate governance code (PCGK) of the Federal Republic of Germany, the “Praxiskommentar Public Corporate Governance Kodex des Bundes – Grundsätze guter Unternehmens- und Beteiligungsführung" (practical commentary on the public corporate governance codex of the Federal Republic – basic principles of good corporate and investment management), edited by Dr. Simone Hartmann and public auditor and tax consultant Prof. Dr. Christian Zwirner, is intended to serve as a guide for solving problems that arise at the interface of public administration, management thinking, political decisions and their application in private-law entities.