Ukraine passes legislation to counter hostile business takeovers

The Ukrainian parliament adopted a bill in first reading, which was developed with the participation of the Justice Ministry and is aimed at countering hostile takeover attempts on Ukrainian enterprises.

Some 271 Ukrainian MPs voted for the adoption of bill No. 5067 on amendments to certain legislative acts of Ukraine concerning the improvement of state registration of rights to immovable property and the protection of property rights.

The required minimum is 226 votes.

The draft law introduces, among other things, the notarization of signatures of a chairperson and a secretary of a general shareholders meeting when registering changes of legal entity; notarization of signatures on the founding documents, the distributing balance sheet, the statement on withdrawal from the company. What is more, the amendments introduce criminal responsibility for wrongful acts of registrars when carrying out re-registration of property.

One of the initiators of the bill MP Oksana Prodan stated during the presentation of the document that it would help to better protect investors` property while facilitating investment in Ukrainian companies.

”Without it [bill], neither investment, nor economic development is possible,” she said.

As UNIAN reported earlier, about 30,000 raider attacks have been reported in Ukraine over the past 15 years, resulting in the redistribution of assets for a total amount of $20 billion. As part of the fight against hostile takeovers, Ukrainian MPS have developed jointly with the Justice Ministry the bill, which was registered in parliament on September 5. Deputy Justice Minister Pavlo Moroz noted that postponing the adoption of the documents would encourage further raider attacks on businesses.

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