News
2008/12/23
Ukraine has been given a unique opportunity to create a clear-cut concept and a regulatory architecture of the stock market – Expert.
KHARKIV, December 23./Volodymyr Fomenko – UKRINFORM/. “At the moment, while the stock market is virtually “down” due to the economic crisis, we have a unique opportunity to do something that has not been done before: a systemic analysis, a clear-cut concept, and identification of the regulatory architecture of Ukraine’s stock market”, Diana Smakhtina, a member of the SCSSM working group and Director of Corporate Governance, SigmaBleyzer, was reported by UKRINFORM’s correspondent as saying today during the round table Joint-Stock Company Legislation Novelties, held in Kharkiv. The round table was organized by the State Commission on Securities and Stock Market (SCSSM) and the Center of Commercial Law (Kyiv). Two goals were set by the initiators: to introduce the details of the Law of Ukraine On Joint-Stock Companies, recently passed by the Ukrainian Parliament, to Kharkiv experts and to identify a gap in this document.
Diana Smakhtina emphasized that the adoption of the Law of Ukraine On Joint-Stock Companies received broad public support. What is particularly important is that the law regulating the activity of joint-stock companies should undoubtedly loosen, if not resolve, the knot of problems in the sphere of corporate relations of the joint-stock form of ownership. The adopted version of the law has several gaps in terms of compliance with corporate governance, broadly applied around the world. The law provides for a number of documents to be prepared by the State Commission on Securities and Stock Market, as a body regulating the circulation of securities issued by joint-stock companies and exercising control over the observation of shareholders’ rights.
Round table participants noted that considerable progress has been achieved in terms of enforcement of ownership rights, which is one of the most vulnerable issues in Ukraine. For a number of reasons (consequences of large-scale privatization and ways of further concentration of joint-stock property) a lot of conflicts have developed in corporate relations. The old law On Companies not only failed to protect shareholders’ property in many instances, but also left room for manipulation with certain intrinsically controversial provisions. The new law On Joint-Stock Companies has an anti-raider focus – emphasized Valentina Stepanova, Head of Kharkiv Territorial Administration of SCSSM. She noted that the new law, among other things, restricts the possibility of filing claims against companies and invalidating decisions of general shareholders’ meetings. Under the law, a claim cannot be filed later than after the expiration of a three-month period, and this can be done only by a shareholder whose rights were infringed upon. The law requires that the buyer of a stake exceeding 10% of the company charter capital should notify the board of directors about such an intention in advance. Under the old law, the board of directors had to inform the public about the acquisition only after the deal has been closed. According to V. Stepanova, the new law, as well as the old one, entitles shareholders owning more than a 10%-stake to demand convention of a shareholders’ meeting. Now, however, shareholders can determine who will pay for the convention of such a meeting. For instance, a general shareholders’ meeting may resolve that a meeting should be funded by its initiator. In addition, the new law requires that meetings be held at the company owned by the shareholders.
Anatoliy Yefimenko, a senior expert of the analytical directorate of the UNO Development Program, noted that the old law did not allow minority shareholders to take actual part in company management. The new law states that the composition of a company’s supervisory board must be proportional to the stakes held by shareholders. According to Anatoliy Yefimentko, minority shareholders have the right to demand that their shares be repurchased in case any significant decision affecting the company has been made. For instance, if more than 50% of the company’s equity (a controlling stake) has been acquired, a minority shareholder can demand that the buyer of the controlling stake buy out his/her shares as well. At the same time, the per-share price of the minority stake to be bought out must not be less than the per-share price of the acquired controlling stake.
Publications:
Economic news 2008.12.23 19:04:00,
>>>Regions 2008.12.23 19:04:00,
UKRINFORM: news 2008.12.23 19:03:00
© 2004 Ukrinform
info@ukrinform.com
KHARKIV, December 23./Volodymyr Fomenko – UKRINFORM/. “At the moment, while the stock market is virtually “down” due to the economic crisis, we have a unique opportunity to do something that has not been done before: a systemic analysis, a clear-cut concept, and identification of the regulatory architecture of Ukraine’s stock market”, Diana Smakhtina, a member of the SCSSM working group and Director of Corporate Governance, SigmaBleyzer, was reported by UKRINFORM’s correspondent as saying today during the round table Joint-Stock Company Legislation Novelties, held in Kharkiv. The round table was organized by the State Commission on Securities and Stock Market (SCSSM) and the Center of Commercial Law (Kyiv). Two goals were set by the initiators: to introduce the details of the Law of Ukraine On Joint-Stock Companies, recently passed by the Ukrainian Parliament, to Kharkiv experts and to identify a gap in this document.
Diana Smakhtina emphasized that the adoption of the Law of Ukraine On Joint-Stock Companies received broad public support. What is particularly important is that the law regulating the activity of joint-stock companies should undoubtedly loosen, if not resolve, the knot of problems in the sphere of corporate relations of the joint-stock form of ownership. The adopted version of the law has several gaps in terms of compliance with corporate governance, broadly applied around the world. The law provides for a number of documents to be prepared by the State Commission on Securities and Stock Market, as a body regulating the circulation of securities issued by joint-stock companies and exercising control over the observation of shareholders’ rights.
Round table participants noted that considerable progress has been achieved in terms of enforcement of ownership rights, which is one of the most vulnerable issues in Ukraine. For a number of reasons (consequences of large-scale privatization and ways of further concentration of joint-stock property) a lot of conflicts have developed in corporate relations. The old law On Companies not only failed to protect shareholders’ property in many instances, but also left room for manipulation with certain intrinsically controversial provisions. The new law On Joint-Stock Companies has an anti-raider focus – emphasized Valentina Stepanova, Head of Kharkiv Territorial Administration of SCSSM. She noted that the new law, among other things, restricts the possibility of filing claims against companies and invalidating decisions of general shareholders’ meetings. Under the law, a claim cannot be filed later than after the expiration of a three-month period, and this can be done only by a shareholder whose rights were infringed upon. The law requires that the buyer of a stake exceeding 10% of the company charter capital should notify the board of directors about such an intention in advance. Under the old law, the board of directors had to inform the public about the acquisition only after the deal has been closed. According to V. Stepanova, the new law, as well as the old one, entitles shareholders owning more than a 10%-stake to demand convention of a shareholders’ meeting. Now, however, shareholders can determine who will pay for the convention of such a meeting. For instance, a general shareholders’ meeting may resolve that a meeting should be funded by its initiator. In addition, the new law requires that meetings be held at the company owned by the shareholders.
Anatoliy Yefimenko, a senior expert of the analytical directorate of the UNO Development Program, noted that the old law did not allow minority shareholders to take actual part in company management. The new law states that the composition of a company’s supervisory board must be proportional to the stakes held by shareholders. According to Anatoliy Yefimentko, minority shareholders have the right to demand that their shares be repurchased in case any significant decision affecting the company has been made. For instance, if more than 50% of the company’s equity (a controlling stake) has been acquired, a minority shareholder can demand that the buyer of the controlling stake buy out his/her shares as well. At the same time, the per-share price of the minority stake to be bought out must not be less than the per-share price of the acquired controlling stake.
Publications:
Economic news 2008.12.23 19:04:00,
>>>Regions 2008.12.23 19:04:00,
UKRINFORM: news 2008.12.23 19:03:00
© 2004 Ukrinform
info@ukrinform.com