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Unsuccessful raidership attempt by minority shareholders

13.09.2019

Complainee: The Ministry of Justice of Ukraine (MinJust) 

Complaint in brief: A developer company addressed the Council. According to the Complainant, minority shareholders of the company attempted to illegally take over it.

The ownership structure of the Limited Liability Company (LLC), which the raiders had encroached on before the attack looked like this. Majority owners spouse had a share of 92% and two more minorities – 8%. The company CEO was a husband of the owners couple.

The state registrar of the utility company from Kyiv Oblast changed the CEO to another person and certified a new charter of the company. The company’s share capital was increased in such a way that the share of minority shareholders increased from 8% to 84%. The state registrar, however, wasn’t much concerned about the fact several new criminal cases had been launched against newly appeared owners. 

Moreover, the Complainant reported that simultaneously with the registrar’s actions about a hundred of athletic people surrounded the residential complex perimeter where the developer’s office was located. They took control of complex checkpoints and locked entrances to construction objects. 

Actions taken: The Council’s investigator was already examining the case file the following day. In the Council’s view, changing the company’s CEO, share capital and constitutive documents could be illegal. The Council stated it in a letter to the Deputy Minister of Justice of Ukraine for State Registration. A Memorandum of Partnership and Cooperation was signed between the Council and the Ministry of Justice.

Result achieved: The Complainant’s issue was bought up at the Expert Group meeting with participation of both parties. The MinJust considered the complaint considering all the circumstances and ordered to cancel illegal registration actions changing the CEO, share capital and constitutive documents, the Black Registrar was denied access to the State Real Property Rights Register.

We would like to remind that raidership is one of the systemic problems of business the Council is working on. Our recommendations to the Government on this issue can be found in the report and their implementation status – on our website.