The coalition agreement of the centre-right government says that the AUKN will be abolished and replaced with a different institution that will handle the majority if not all assets owned by the state.

But as Finance Minister Janez Šušteršič told the press after the cabinet session, finding a solution will take some time. "For the interim period we have proposed urgent changes necessary for the normal functioning of government," he said.

The AUKN, originally established as an independent agency in order to remove politics from staffing in partially state-owned companies, will henceforth have to seek government approval for votes at annual general meetings, including the appointment of supervisory board members.

"It is up to the agency to seek agreement, if it does not succeed it does not have a mandate for voting," Šušteršič said.

Moreover, in the absence of key strategic documents for the management of state assets (which is the case at the present), the government may bypass the AUKN altogether and ask parliament for a mandate to directly decide on a disposal, capital increase or changes to a company's bylaws.

Šušteršič explained that the government would resort to that option if it did not have support from the AUKN for a key decision.

"At present there is support regarding recapitalisation of NLB bank, but there are other cases, there are several companies that require quick action, a very quick search for strategic owners," he said.

Additionally, the limit over which the AUKN needs to seek government approval for disposal of stakes in companies has been lowered from EUR 20m to EUR 5m.

Asked whether the changes were a departure from OECD guidelines (OECD membership was one reason why AUKN was set up in the first place), Šušteršič said OECD guidelines primarily stipulated that regulatory powers may not be held by the same authority that manages investments.

The AUKN said in a response that the effectiveness of management of state assets would decrease significantly due to the numerous procedures related to decision-making within the government. The agency also believes that its independence might be in jeopardy.

The AUKN is worried that short deadlines would not allow the entire agency to prepare itself for shareholders' meetings, and that in certain cases, when the Agency fails to get the green light from the government, it could happen that the ownership of the state could not be represented at AGMs.

The agency is also being strapped of its independence in appointing and dismissing supervisory boards in state-owned companies, assessing companies' performance, launching special audits and granting discharge liability to managers and supervisors, the AUKN said.

The Association of Supervisory Board Members meanwhile said that the amendments were not in line with OECD guidelines. Indeed, they claim the solutions are a notch below regulations that applied before the act was adopted.

The amendments have already been labelled by pundits and the media as allowing politics to interfere with corporate governance once again, but Šušteršič denied this notion.

The AUKN is still in charge of all procedures, the government merely has the option of giving or not giving consent, he said.

The proposal has already been attacked by the opposition. "This is a big step backward and constitutes direct interference of politics in the corporate sector," Janko Veber, the head of the Social Democrats (SD) deputy group, said in a statement.