The Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine regarding investor protection,” provides direction changes to address the difficult issue of protection of investors’ rights, by granting rights to every participant of the economic society to go to court on behalf of society to prosecute officers of the company, whose actions resulted in a loss. It is proposed to introduce a new tool to protect the violated rights of investors – a derivative suit.
The bill amended the article 1 of the Economic Procedural Code of Ukraine: in accordance with this Article in the cases stipulated by legislative acts of Ukraine in the Economic Court have the right to state and other authorities, individuals who are not business entities, participants of economic societies. Consequently, natural persons – participants of business entities recognized by the participants in the economic process.
The bill also added the Commercial Procedural Code of Ukraine article “Official publication of announcements in cases of damages caused to the partnership it official.” Announcements should be made public no later than 7 days before the hearing, with the exception of ads on initiation of proceedings concerning the damages caused to the partnership its official, which shall be announced at the latest 20 calendar days to the day of the hearing.
The ads that are relevant, are placed on a single electronic page, where there is a claimant name, its location and the identification code, the price action and the case number, the date of publication of the announcement. This innovation is a very useful and relevant to the practice of corporate governance, the scope of protection of investors, because in this way Ukraine closer to international standards. The main factor of the real investor protection is the transparency of corporate management, the availability of information on the activities of the company and its officers. With this resource, investors will be able to receive truthful, accurate information about the possible negative practice in the history of the activity of the individual companies, so will be able to make informed staffing decisions, to assess the possible risks.
Supplement to the article 12.14 of the Economic Procedural Code provide for jurisdiction of the economic courts, the territorial jurisdiction of disputes between a business entity and an official for compensation for damages caused by this official of the Enterprise for the claim specified companies or participant (shareholder) in the interests of the enterprises subordinated to economic court. These disputes will be considered by the economic court of the location of economic the company listed in the Unified State Register of Legal Entities and individuals – entrepreneurs.
Relevant changes experienced and Article 21 of the Code of Ukraine: of the defendants in the economic process assigned officials of the economic company, which filed the claim, – in disputes for damages caused to the partnership these officials. At the same time, according to the rules of the Civil Procedure Code will be dealt with disputes over claim participant (s) of the company, which (who) collectively are holders of 5 percent or more of the statutory capital of the enterprise to go to court in the public interest on the compensation of losses to society supported by an official society through their actions.
Summing up, we want to note that the adoption of this bill strengthens the protection of minority shareholders’ rights and brings Ukraine closer to meeting the requirements of the Association Agreement with the European Union. Also on the bill “On amendments to some legislative acts of Ukraine concerning the protection of the rights of investors” will allow Ukraine to gain a foothold in the top 20 ranking Doing Business.The Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine regarding investor protection,” provides direction changes to address the difficult issue of protection of investors’ rights, by granting rights to every participant of the economic society to go to court on behalf of society to prosecute officers of the company, whose actions resulted in a loss. It is proposed to introduce a new tool to protect the violated rights of investors – a derivative suit.
The bill amended the article 1 of the Economic Procedural Code of Ukraine: in accordance with this Article in the cases stipulated by legislative acts of Ukraine in the Economic Court have the right to state and other authorities, individuals who are not business entities, participants of economic societies. Consequently, natural persons – participants of business entities recognized by the participants in the economic process.
The bill also added the Commercial Procedural Code of Ukraine article “Official publication of announcements in cases of damages caused to the partnership it official.” Announcements should be made public no later than 7 days before the hearing, with the exception of ads on initiation of proceedings concerning the damages caused to the partnership its official, which shall be announced at the latest 20 calendar days to the day of the hearing.
The ads that are relevant, are placed on a single electronic page, where there is a claimant name, its location and the identification code, the price action and the case number, the date of publication of the announcement. This innovation is a very useful and relevant to the practice of corporate governance, the scope of protection of investors, because in this way Ukraine closer to international standards. The main factor of the real investor protection is the transparency of corporate management, the availability of information on the activities of the company and its officers. With this resource, investors will be able to receive truthful, accurate information about the possible negative practice in the history of the activity of the individual companies, so will be able to make informed staffing decisions, to assess the possible risks.
Supplement to the article 12.14 of the Economic Procedural Code provide for jurisdiction of the economic courts, the territorial jurisdiction of disputes between a business entity and an official for compensation for damages caused by this official of the Enterprise for the claim specified companies or participant (shareholder) in the interests of the enterprises subordinated to economic court. These disputes will be considered by the economic court of the location of economic the company listed in the Unified State Register of Legal Entities and individuals – entrepreneurs.
Relevant changes experienced and Article 21 of the Code of Ukraine: of the defendants in the economic process assigned officials of the economic company, which filed the claim, – in disputes for damages caused to the partnership these officials. At the same time, according to the rules of the Civil Procedure Code will be dealt with disputes over claim participant (s) of the company, which (who) collectively are holders of 5 percent or more of the statutory capital of the enterprise to go to court in the public interest on the compensation of losses to society supported by an official society through their actions.
Summing up, we want to note that the adoption of this bill strengthens the protection of minority shareholders’ rights and brings Ukraine closer to meeting the requirements of the Association Agreement with the European Union. Also on the bill “On amendments to some legislative acts of Ukraine concerning the protection of the rights of investors” will allow Ukraine to gain a foothold in the top 20 ranking Doing Business.
