Rulebook on Issuing Consent for Acquiring a Qualified Shareholding in a Leasing Company and Another Legal Entity

Rulebook on Issuing Consent for Acquiring a Qualified Shareholding in a Leasing Company and Another Legal Entity (Unofficial Consolidated Text – NN No. 20/14 and 72/17)

UNOFFICIAL CONSOLIDATED TEXT
RULEBOOK ON ISSUING CONSENT FOR ACQUIRING A QUALIFIED SHAREHOLDING IN A LEASING COMPANY AND ANOTHER LEGAL ENTITY (Narodne novine No. 20/14 and 72/17) (The Rulebook on Amendments to the Rulebook on Issuing Consent for Acquiring a Qualified Shareholding in a Leasing Company and Another Legal Entity (NN No. 72/17) entered into force and applies from 29 July 2017.)

Rulebook on Issuing Consent for Acquiring a Qualified Shareholding in a Leasing Company and Another Legal Entity (Unofficial Consolidated Text – NN No. 20/14 and 72/17) Pursuant to Article 120, Paragraph 5 of the Leasing Act ("Narodne novine" No. 141/13), the Croatian Financial Services Supervisory Agency, at the meeting of the Board of Directors held on 14 July 2017, adopts THE RULEBOOK ON ISSUING CONSENT FOR ACQUIRING A QUALIFIED SHAREHOLDING IN A LEASING COMPANY AND ANOTHER LEGAL ENTITY INITIAL PROVISIONS
Article 1.
(1) This Rulebook prescribes:

1. the documentation to be attached to the application for issuing consent for acquiring a qualified shareholding and the criteria on the basis of which the suitability and financial standing of the intended acquirer of a qualified shareholding in a leasing company are assessed.
2. the documentation to be attached to the application for issuing consent for acquiring a qualified shareholding and the criteria on the basis of which the suitability and financial standing of the legal entity in which the leasing company acquires a qualified shareholding are assessed.
   (2) The application for issuing consent for acquiring a qualified shareholding must contain information on the size of the share (expressed in nominal and percentage terms) that is intended to be acquired and the corresponding documentation prescribed by this Rulebook.
   (3) The provisions of this Rulebook also apply in the case of acting on an application for increasing a qualified shareholding in accordance with the provisions of Articles 16 and 25 of the Act.

DOCUMENTATION TO BE ATTACHED TO THE APPLICATION FOR ISSUING CONSENT FOR ACQUIRING A QUALIFIED SHAREHOLDING IN A LEASING COMPANY
Article 2.
(1) A legal entity as the intended acquirer must attach to the application for acquiring a qualified shareholding in a leasing company:
a) an extract from the court register or other appropriate register in the original or a certified copy (not older than three months), and for a foreign legal entity, an extract from another appropriate register in the original or a certified copy and in translation by an authorized court interpreter (not older than three months); b) a printout from the register of shareholders (share register) or share register in the original or a certified copy with a list of natural persons who are the ultimate shareholders or holders of business shares, indicating the following data: first and last name, address of residence or domicile, and other identification data, total nominal amount of shares and percentage share in the share capital of the intended acquirer; c) a list of persons who are in a relationship of connectedness with the intended acquirer within the meaning of the Act, and a description of the manner of connectedness; d) financial reports for the last three financial years, or if the company was established within the past three years, financial reports for each year since establishment, and if the aforementioned financial reports are subject to audit, audited financial reports are attached; e) if more than 9 months have passed since the last annual financial report, financial reports for the current year; f) proof of secured funds for acquiring the qualified shareholding and a description of the method or source of financing; g) a declaration that no bankruptcy proceedings or pre-bankruptcy settlement proceedings have been initiated or opened against the intended acquirer; h) data on whether the intended acquirer has been convicted of misdemeanors, whether misdemeanor or criminal proceedings are pending against the intended acquirer, and that the intended acquirer has not been finally convicted of criminal offenses prescribed by the Capital Market Securities Act ("Narodne novine" No. 84/02 and 138/06), the Act on Criminal Offenses against the Capital Market ("Narodne novine" No. 152/08) and the Companies Act ("Narodne novine" No. 111/93, 34/99, 121/99, 52/00, 118/03, 107/07, 146/08, 137/09, 152/11, 111/12, 144/12, 68/13), and for the following criminal offenses prescribed by the Criminal Code ("Narodne novine" No. 125/11 and 144/12):
– criminal offenses against property (except for the criminal offense of unauthorized use of another's movable property and the criminal offense of damaging another's property), in respect of which criminal proceedings are initiated ex officio, – criminal offenses against humanity and human dignity, – criminal offenses against the economy, – criminal offenses of forgery, – criminal offenses against official duty, – criminal offenses against labor relations and social security, – criminal offenses from the Criminal Code ("Narodne novine", No. 110/97, 27/98, 50/00, 129/00, 51/01, 111/03, 190/03 – decision of the Constitutional Court, 105/04, 84/05, 71/06, 110/07, 152/08 and 57/11) which are in legal continuity with the aforementioned criminal offenses in point d) of this Article, and for a foreign person, a declaration that no investigation has been initiated or that no criminal proceedings are pending nor has the person been finally convicted for acts which, by their description and consequences, correspond to the aforementioned criminal offenses; By the provision of Article 1, Paragraph 1 of the Rulebook on Amendments to the Rulebook on Issuing Consent for Acquiring a Qualified Shareholding in a Leasing Company and Another Legal Entity (NN No. 72/17), which entered into force on 29 July 2017, Paragraph 1, Point i) was amended by replacing the words: "i) where applicable, the opinion or consent of another competent authority from the Republic of Croatia, another Member State or a third country regarding the intended acquisition, which the Agency shall request on its own initiative when it deems it appropriate and necessary depending on the circumstances of the individual acquisition," with the words: "where applicable, the opinion or consent of the competent authority from a Member State or a third country regarding the intended acquisition,"; i) where applicable, the opinion or consent of another competent authority from the Republic of Croatia, another Member State or a third country regarding the intended acquisition, which the Agency shall request on its own initiative when it deems it appropriate and necessary depending on the circumstances of the individual acquisition; j) confirmation of payment of the administrative fee and compensation; k) other documentation upon request by the Agency. (2) A natural person as the intended acquirer must attach to the application for acquiring a qualified shareholding in a leasing company:
By the provision of Article 1, Paragraph 2 of the Rulebook on Amendments to the Rulebook on Issuing Consent for Acquiring a Qualified Shareholding in a Leasing Company and Another Legal Entity (NN No. 72/17), which entered into force on 29 July 2017, Paragraph 2, Point a) was amended by replacing the words: "a) a certified copy of an identity card or passport, and for a foreign citizen, a copy of a travel document, residence permit or other document proving the identity of a foreign citizen in accordance with the provisions of the Act on Aliens ("Narodne novine", No. 130/2011, 74/2013)" with the words: "a copy of an identity card or passport, or for a foreign citizen, a copy of an identity card or travel document in accordance with the provisions of the Act on Aliens ("Narodne novine", No. 130/2011, 74/2013)". a) a certified copy of an identity card or passport, and for a foreign citizen, a copy of a travel document, residence permit or other document proving the identity of a foreign citizen in accordance with the provisions of the Act on Aliens ("Narodne novine", No. 130/2011, 74/2013); b) a curriculum vitae of the intended acquirer which includes personal data (first and last name, address of residence or domicile and other identification data of the acquirer), a list of all legal entities where they were or are still employed, a member of the management or supervisory board, a proxy, and in which they were or are still holders of a qualified shareholding; c) a certificate that no criminal proceedings are pending against them (not older than three months), or for a foreign citizen, a certificate from the competent authority of the country of which they are a citizen (not older than three months); d) data as in Paragraph 1, Point h) of this Article; e) a list of persons who are in a relationship of connectedness with the intended acquirer within the meaning of the Act, and a description of the manner of connectedness; f) proof of secured funds for acquiring the qualified shareholding and a description of the method or source of financing; g) confirmation of payment of the administrative fee and compensation; h) other documentation upon request by the Agency. By the provision of Article 1, Paragraph 3 of the Rulebook on Amendments to the Rulebook on Issuing Consent for Acquiring a Qualified Shareholding in a Leasing Company and Another Legal Entity (NN No. 72/17), which entered into force on 29 July 2017, Paragraph 3 was amended by replacing the words: "Foreign documents from this Article shall be submitted translated into Croatian by an authorized court interpreter, and foreign documents from Paragraph 1, Points a) and i) of this Article and from Paragraph 2, Point c) of this Article shall also be certified in accordance with the law and international regulations (Apostille – The Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents, of 5 October 1961). As a rule, documentation from Paragraph 1, Points d) and
e) shall be submitted in electronic form in PDF format on a permanent medium and in a simple translation. In the event that the Agency deems it necessary, it will request the applicant to submit documentation from Paragraph 1, Points d) and e) in the original and in translation by an authorized court interpreter for the foreign language." with the words: "Foreign documents from this Article shall be submitted translated into Croatian by an authorized court interpreter, and foreign documents from Paragraph 1, Points a) and i) of this Article and from Paragraph 2, Point c) of this Article shall also be certified in accordance with the law and international regulations (Apostille – The Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents, of 5 October 1961)". (3) Foreign documents from this Article shall be submitted translated into Croatian by an authorized court interpreter, and foreign documents from Paragraph 1, Points a) and i) of this Article and from Paragraph 2, Point c) of this Article shall also be certified in accordance with the law and international regulations (Apostille – The Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents, of 5 October 1961). As a rule, documentation from Paragraph 1, Points d) and e) shall be submitted in electronic form in PDF format on a permanent medium and in a simple translation. In the event that the Agency deems it necessary, it will request the applicant to submit documentation from Paragraph 1, Points d) and e) in the original and in translation by an authorized court interpreter for the foreign language. (4) The data from Paragraph 1, Point h) and Paragraph 2, Point d) of this Article shall be considered to be data from the criminal or misdemeanor record of the competent authority of the relevant country, not older than three months, and if such data cannot be obtained according to the regulations of that country, a declaration by the legal or natural person to whom the data relates, not older than one month. (5) If the acquisition of a qualified shareholding enables dominant influence or control over the business of the leasing company, the intended acquirer must, upon request by the Agency, attach to the application, in addition to the documentation from Paragraphs 1 and 2 of this Rulebook:
a) a business plan and strategy of the leasing company in which it acquires a qualified shareholding with projections of the balance sheet and profit and loss account for the first three financial years (forms are available on the Agency's official website); b) changes in the management, organizational and personnel structure, if planned; c) an information technology activity plan, if changes are planned.
Article 3.
If the intended acquirer is the parent company or superior entity in a group, it must submit the documentation from Article 2, Paragraph 1, Points d) and e) of this Rulebook prepared on a consolidated basis.

DOCUMENTATION TO BE ATTACHED TO THE APPLICATION OF THE LEASING COMPANY FOR ACQUIRING A QUALIFIED SHAREHOLDING IN ANOTHER LEGAL ENTITY
Article 4.
The leasing company, as the intended acquirer, must attach to the application for acquiring a qualified shareholding in another legal entity the documentation from Article 2, Paragraph 1 and Article 3 of this Rulebook, which relates to the legal entity in which the qualified shareholding is acquired.

OTHER DOCUMENTATION
Article 5.
In addition to the documentation from Articles 2, 3 and 4 of this Rulebook, the Agency may, pursuant to Article 23 of the Act, during the processing of the application, request other documentation which it deems necessary for deciding on the issuance of consent, including information prescribed by the law governing the prevention of money laundering and financing of terrorism, which are collected by the obligors of that law.

CRITERIA ON THE BASIS OF WHICH THE SUITABILITY AND FINANCIAL STANDING OF THE ACQUIRER OF A QUALIFIED SHAREHOLDING IN A LEASING COMPANY AND THE LEGAL ENTITY IN WHICH THE LEASING COMPANY ACQUIRES A QUALIFIED SHAREHOLDING ARE ASSESSED
Article 6.
In deciding on the issuance of consent for acquiring a qualified shareholding in a leasing company, the Agency assesses the suitability and financial standing of the intended acquirer of a qualified shareholding according to the following criteria:

1. the reputation of the intended acquirer;
2. the reputation, experience and appropriate capabilities of the persons who will manage the business of the leasing company after the acquisition, if such changes occur;
3. the financial standing of the intended acquirer;
4. the assessment of the leasing company's ability to comply with, or continue to comply with, the provisions of this Act and other laws and regulations applicable to the business of the leasing company;
5. the existence of justified grounds for suspicion in accordance with regulations on the prevention of money laundering and financing of terrorism, that the subject acquisition of a qualified shareholding would be used or attempted to be used for money laundering or financing of terrorism, or that the subject acquisition of a qualified shareholding could increase the risk of money laundering or financing of terrorism.
   Article 7.
   (1) The Agency will assess the reputation of the intended acquirer of a legal entity on the basis of the documentation from Article 1, Paragraph 1, Points c), g) and h), and of a natural person on the basis of the documentation from Paragraph 2, Points c), d) and e) of the same Article of this Rulebook.
   (2) In assessing the conditions from Article 2, Paragraph 1, Point h) and Paragraph 2, Point d), the Agency will also take into account all available information related to the type of conviction, the stage at which the proceedings are, and the legal remedies declared, the imposed sanction, the effects of rehabilitative measures, existing aggravating and mitigating circumstances of the case, the significance of the offense or misdemeanor, the period that has elapsed since the commission of the act, and the behavior of the person during that time. Additionally, the Agency will take into account a larger number of minor offenses which individually do not impair, but together may impair, the good reputation of the person. The Agency will take into account data on all relevant previous measures, convictions and proceedings concerning the company or natural person acquirer which were carried out or are being carried out by the Agency or another competent authority. (3) In assessing the reputation of the intended acquirer of a natural person, the Agency will analyze information indicating improper behavior in previous professional work, and particularly non-transparent conduct and non-cooperation with competent authorities, denial or withdrawal of licenses for performing managerial functions or performing professional occupations or activities, and, if feasible, it will also analyze the reasons for termination of employment contracts, dismissal from key or similar positions, and bans on conducting business or representing a legal entity imposed by the competent authority. (4) The financial standing of the intended acquirer of a legal entity is assessed on the basis of the documentation from Article 1, Points b), c), d), e) and f) and g), and of a natural person on the basis of the documentation from Paragraph 2, Points b), f) and e) of the same Article of this Rulebook. (5) In assessing the condition from Article 6, Point 3 of this Rulebook, the Agency will take into account the financial stability of the intended acquirer, analyzing:
   a) whether the assets jeopardize the fulfillment of its financial obligations in the future; b) whether the person is on the list of delinquent debtors (e.g., HROK, list of tax debtors of the Ministry of Finance, blacklist, credit registers, etc., and for foreign persons, on corresponding registers); c) whether enforcement or bankruptcy proceedings or personal bankruptcy, or pre-bankruptcy settlement proceedings have been initiated and conducted against the person's assets; d) large investments or exposures and obtained loans and credits; e) other data that cast doubt on the financial stability of the intended acquirer. (6) Regarding the criterion on the leasing company's ability to comply with, or continue to comply with, the provisions of the Act and other laws and regulations applicable to the business of the leasing company, the Agency will, based on the entire documentation attached to the application, analyze whether there are circumstances indicating that the intended acquisition could negatively affect the leasing company, in the sense that its compliance with the provisions of the Act and its implementing regulations, for any reason, could be hindered or even prevented. (7) The fulfillment of the suitability criteria for the intended acquirer from Article 6, Point 5 of this Rulebook is assessed by applying the laws and other regulations governing the prevention of money laundering and financing of terrorism. (8) The provisions of Articles 6 and 7 of this Rulebook shall, mutatis mutandis, also apply in the case of a leasing company's application for acquiring a qualified shareholding in another entity, when assessing the legal entity in which the leasing company acquires a qualified shareholding. FINAL PROVISION
   Article 8.
   This Rulebook enters into force and applies from 29 July 2017.
   DEPUTY CHAIRMAN OF THE BOARD OF DIRECTORS
   Mario Radaković