This case is an example of the so-called “share fragmentation”. A member of a company engaged in agricultural equipment production turned to the Council. The complainant has a share of about 34% in it. In turn, as of June 2023, this company owned a share in the authorized capital of an insurance company. Therefore, the entrepreneur indirectly owned 14% of this insurance company. In the summer of 2023, the complainant decided to sell his 34% and sent his offer to other members. However, later, from a letter from the NBU in the financial monitoring context, the complainant accidentally learned that his indirect share in the insurance company had decreased from 14% to 3%. And in the fall of 2023, this indirect share decreased to 0%. As it turned out, the company’s management team, in which the entrepreneur had a 34% share, alienated the company’s share in the insurance company without his consent to other persons, who later resold their shares. Thus, the company was withdrawn from the insurance company’s membership and the complainant’s indirect ownership of the insurance company’s share ceased.
The complainant approached the Collegium of the Ministry of Justice of Ukraine (MinJust Collegium) for considering complaints about l decisions, actions or omission of the state registrar and asked for the Business Ombudsman Council support.
While analyzing the case, particularly, the charter of the company in which the complainant has a share, the Council found collisions there. However, the Council eventually arrived to a conclusion that the charter restricted the head of this company from entering into agreements based on which the alienation of its property – the share in the insurance company – took place. In addition, it was established that not all documents required by law were provided to the notary for registration actions. Therefore, the notary still had to refuse taking contested registration actions, but he did not do so. According to the results of the appeal against illegal registration actions in the MinJust Collegium, the Council’s applicant’s complaint was satisfied, and the dishonest notary was blocked access to the Unified State Register for three months.