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Gramatskiy and Partners LF
Contacts:
Phone: +380 (44) 581-15-51
E-mail: office@gramatskiy.com
Skype: GramatskiyLawFirm
Address:
Ukraine, 01001, Kyiv,
16 Mykhailivska Street
floors 2-4

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The Ukrainian Journal of Business Law (декабрь 2017 года)

Published 23.03.2018 Mykola Voytovich

The National Securities and Stock Market Commission by its Decision No.904 of 19 December 2017 approved the procedure for supervision over registration of shareholders, holding a general meeting, voting and summing up its results at general meetings of joint-stock companies. What changes should shareholders expect?

The new Procedure benefits the business environment as it mitigates the regulatory pressure of the Commission on the process of a general meeting of shareholders (GMS). The most important achievement of the Procedure is the transition from a punitive approach to a preventive one. With the new Procedure, if at any stage of GMS some violations are detected, the Commission will not bring to responsibility but, as a preventive measure, will send a report to the company with the description of the results of provided supervision and discovered violations. Such a measure must prevent a company or any other participant of GMS from future wrongdoings. Unlike the previous form of report, the new one does not even need to be signed by company officials. Ultimately, the Commission was deprived of the authority to prosecute and to penalize a GMS procedure breaker, which constituted a huge corruption risk.

It is also important that, in contrast to the previous version, failure to provide documents upon a request by the Commission’s representatives is no longer grounds for an extraordinary inspection. It was another major field for abuse of power where Commission representatives required an amplified amount of documents and explanations in order to gain the ground for an extraordinary inspection that covered a wider range of company activities in the respective area.

As in the past, the Commission’s supervision is not an obligatory procedure for every GMS and is the Commission’s right. At the same time, shareholders or company officials may no longer initiate the procedure of the Commission’s supervision. Such initiation has become the sole discretion of the Commission. The new Procedure also specifies in more detail the process of designating the Commission’s representatives who will be more prepared for supervision actions, as they will have to analyze lots of information about GMS and a targeted company in particular.

Николай Войтович

The Ukrainian Journal of Business Law декабрь 2017 года
http://ujbl.info/article.php?id=1077

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