29 May 2017, Monday, 17:32 88

Appeal Court Invalidates Cherkasyoblenergo Shareholders' October 2016 Decision To Change Its Supervisory Board

Редактор: Daria Zubkova

The Kyiv Economic Court of Appeals has invalidated the decisions that the shareholders of the Cherkasyoblenergo power distribution company made at a meeting during the period of October 10-11, 2016, including the decision to change the composition of the company's supervisory board.

This is stated in the relevant court ruling dated May 18, a copy of which Ukrainian News Agency obtained.

The court ruled that the decisions that were made at the general meeting of shareholders of Cherkasyoblenergo were illegal because the State Property Fund approved the agenda of the meeting without preliminary approval of its draft, which is a violation of the requirements of the law of Ukraine on joint-stock companies.

In addition, since the state owns more than 25% of the shares in Cherkasyoblenergo, representatives of the state (in the person of the State Property Fund) can vote at general meetings of shareholders only if orders to cast votes are approved by the relevant Cabinet of Ministers's directive.

Since there was no such Cabinet of Ministers's directive, the votes of the state representative were illegally taken into account during determination of voting results.

In addition, according to the court ruling, the shareholders' decision to distribute the net profits that the company made in 2014 and 2015 and spend part of the profits on payment of dividends was made without the consent of the company's arbitration administrator and without taking account of the Cherkasy Regional Commercial Court's decision dated April 12, 2009, related to the bankruptcy case involving Cherkasyoblenergo (which prohibited payment of dividends to its shareholders in accordance with decisions of its management bodies).

As Ukrainian News Agency earlier reported, Cherkasyoblenergo's shareholders decided at an extraordinary meeting on May 12 (which was convened by the company's supervisory board that was declared illegitimate by a court) to dismiss the company's acting board chairperson Svitlana Kuzminska and appoint Oleh Samchuk as its board chairperson.

The state owns 46% of the shares in Cherkasyoblenergo through the State Property Fund, the Ukrainian Energy-Saving Service Company (UkrESCO) owns 25% (the Cabinet of Ministers intends to merge these two stakes before privatization of the company), and Svarog Asset Management (affiliated with businessman Konstantin Grigorishin) owns 23.9885%.