GOVERNMENT DECISION Exception or legally questionable rule: How is BH Telecom distributing almost 10 million KM?

By: Amina Čorbo-Zećo

Article 61 of the Rules of the Securities Registry of FBiH shows that third parties (usufructuaries, beneficiaries, pledge creditors) must also be registered in order to acquire a legal basis related to securities.

"The Registry registers pledges based on complete and correctly filled out orders and attached documentation, or based on an enforceable court order or an act of a competent authority that has the force of an execution order, which seizes securities, in the registration system within three working days of receiving the order or decision.



A pledge is established at the moment of registration in the registration system. After the pledge is registered in the registration system, the Registry issues a certificate of registered/deleted pledge to the pledgor and pledgee, and upon written request, to any person who proves they have a legal interest. Paragraphs 2 and 3 of this article also apply to the right of usufruct, the right of redemption, and the pre-emptive right, as well as the registration and deletion of restrictions and prohibitions on the trading of securities," it is stated.

However, completely contrary to this principle, BH Telecom will distribute funds from dividends, in this case 9,903,682.76 KM, from its own account to beneficiaries, without prior registration of these beneficiaries in the registration system. The funds are intended for sports and cultural organizations, based on the Decision of the Government of FBiH.

"Based on the decision of the Company's Assembly dated December 24, 2024, additional dividends were due to the Government of the Federation of BiH, which then decided to allocate these funds to end-users through signed contracts. BH Telecom is responsible for the payment execution based on these contracts. The timeframe starts from the moment all necessary contracts and validated data are received, and payments are executed as soon as possible, after verification of formal conditions," BH Telecom told NAP, adding that there should be no delays.

"All funds intended for these payments are secured in BH Telecom's accounts, so at this moment we do not see any potential reasons that would cause a delay."

Incidentally, according to the law, BH Telecom should have paid the funds into the Budget of the Federation, as stated on the website of the Securities Registry.



And it is precisely because of this that this decision has caused strong reactions from parts of the legal and professional public. According to the Law on Business Companies of FBiH, dividends can only be paid to a shareholder, in this case the Federation of BiH as the majority owner of BH Telecom, and then further planned and allocated through budgetary procedures.

Any other solution, lawyers believe, represents a potential violation of the law.

The Office of the Government of the Federation of BiH for Public Relations previously denied these claims, emphasizing that the payment was carried out completely legally and based on the opinions of an economic expert witness, the Securities Commission of FBiH, and a legal expert.

The question then arises as to how it is possible that the Securities Commission itself violated its own rules and laws.

"Dividends can be paid to third parties according to the Law on the Securities Market, provided there is a legal basis between the dividend owner (Government of FBiH) and the beneficiary," it is stated.

"Contracts with beneficiaries are the legal basis and fulfill all obligations from Article 5 of the Rulebook on Special Transactions and Restrictions on Trading in Securities."

According to the Government's interpretation, their authority as a shareholder allows them to directly direct the payment to end-users, provided there is a written contract. However, according to the interpretation of Article 61 of the Registry Rules, such rights cannot produce legal effect without registration in the registration system, which raises the question of whether all formal prerequisites have been met in this case.

BH Telecom confirmed to Patria that they received all necessary contracts and instructions on July 22 and 23, and immediately began the payment procedure. The distribution of funds is expected to be completed by the end of the week.

In any case, the dilemma remains whether the legal basis between the shareholder and the beneficiary is sufficient without registry registration? And is this dividend transfer model an exception or the beginning of a dangerous practice?

The Government's decision includes dozens of sports federations and cultural institutions, including the Football Association of BiH (2 million KM), the Basketball and Handball Federations (1 million KM each), the Film Fund, the National Theatre, and others.