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3 August 2009

Asters Partner Evaluates the Law of Ukraine "On Joint Stock Companies" at a Round Table

On 31 July 2009, Vadym Samoilenko, Partner at Asters, took part in a discussion at the round table entitled "Successes and Difficulties of the Law of Ukraine ‘On Joint Stock Companies’" organized by the Corporate Law Committee of the Ukrainian Bar Association in Odessa, Ukraine.

Partners and associates of the leading Ukrainian law firms, as well as heads of the legal departments of various companies, took part in the discussion. The panelists discussed a wide range of issues pertaining to the new Law of Ukraine "On Joint Stock Companies", which became effective three months ago. During the course of the discussion, the lawyers analyzed the pros and cons arising from implementation of the new Law, and gave brief suggestions as to introducing changes to it.

During the discussion, Vadym Samoilenko provided his professional assessment of the fundamental problems of the Law's provisions, its contradictions and shortcomings. In a critical analysis, Vadym Samoilenko rejected the requirement that public joint stock companies be obligatorily listed and that their shares be traded exclusively on an exchange as economically burdensome and impossible, as a practical matter, for thousands of public joint stock companies which must be formed out of contemporary open joint stock companies. Furthermore, Vadym Samoilenko emphasized that despite the lack of clarity of the final and transitional provisions of the Law at the present time it should used as guidance only by those companies, which have brought their activity into conformity with it by amending their charters and internal regulations. Other companies should be guided by the norms of the Law of Ukraine "On Business Associations" and concomitant legislation prior to 30 April 2011, and not by the Law of Ukraine "On Joint Stock Companies".

At the round table, the lawyers also discussed issues pertaining to preparing for and conducting the general shareholders meeting under the conditions of effective legislation, how minority shareholders realize their rights, determining the market value of shares and so forth. The panelists agreed to raise these and other issues for discussion at the Third Annual Corporate Law Forum, which will take place in Kyiv under the auspices of the Ukrainian Bar Association on 30 October 2009. As a result of the Forum, the legal practitioners' brief recommendations on introducing changes to the Law of Ukraine "On Joint Stock Companies" will be sent to a number of state agencies, including the State Securities and Stock Market Commission.

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