Damage to the natural person

Shareholders are held hostage to competition

Is it easy to be natural persons, shareholders of the largest enterprises in Ukraine? In most cases, no. But in order to experience the full depth of this “no”, it is necessary to ask the shareholders of Central GOK. The fact is that while there is a controversial debate of large companies around the 25-percent stake in Central GOK, physical persons-shareholders of the plant are forced to wait. And even the fact that the state is a controlling stake in the company, can not protect ordinary shareholders. The prosecutor’s office in Kiev and seized the register of shareholders of the Company, became, thus, in “combination” is also the registrar and custodian of the shares CGOK. Now shareholders if necessary securities transactions … have to go to the prosecutor’s office, which was necessarily involved in the conflict.


First, a little history. September 6, 2002 a blocking stake of JSC “Central GOK” has been implemented by the owner, the American company «Detroit Cold Rolling Company LC», small enterprise “International Business Center” (IDC) for 13.15 million dollars. With the payment terms of 600 thousand . dollars a month, starting from the next month after the treaty’s entry into force. To guarantee the payment of MDC packet pledge agreement was concluded between the company’s products in the amount of 8 million. Dollars Guarantor hereunder made himself CGOK. Among the terms of the deal has also been getting permission from the Antimonopoly Committee (AMC) and its coordination with the State Property Fund. December 20, 2002 AMC has given permission to ICC deal, and a week later (Dec. 28) imposed a visa and the State Property Fund.

And everything seemed to be going well, but … But four months after the conclusion of the first transaction «Detroit Cold Rolling Company LC» re-sell the same package, but JSC “System Capital Management” (SCM). From this point we had difficulty. And the number involved is growing. February 12 AMC without any explanation withdrew its decision to issue a permit ICC. A day later, the committee said permission for the purchase of shares of SCM Mining, providing the company more than 25% of the votes in the supreme governing body of the combine.

February 24 SCM refers to the registrar of the Central Mining – “PrivatBank” – with a request to amend the registry, but is refused. As it turned out, in early February 2003 on the obligation of the Dnepropetrovsk Economic Court “PrivatBank” made in the register of shareholders CGOK MDC. The court’s decision was based on the fact that the presence of the transfer order, issued by a US company January 4, 2003 in favor of the MDC signed by the Director «Detroit Soldrolling Sompany L.C.» Michael Wilkinson. However, from the transfer orders in favor of the MDC director of the US company refused, calling the fake signature on the document. An interesting fact, especially if we take into account the fact that the documents before the ICC in the next six months have been a number of state institutions, and not one expressed even a hint of suspicion of forgery. Silence is kept and «Detroit Soldrolling Sompany”. All seemed to have been waiting signal.

Here is a brief digression. The fact that the name of the companies participating in the conflict, certainly bright, but do not say anything in fact. The situation becomes clearer, if we assume that «Detroit Cold Rolling Company LC» belongs to the Black Lion, one of the owners of Trans World Group (TWG), made famous in the Ukraine losing the titanic struggle for the Nikolayev Alumina Plant. Perhaps it was the Black Lion is the author of economic innovations at Aksu ferroalloy plant, where, according to reports in the Russian and Western press (about TWG in 1999 wrote, “Moscow News”, “Kommersant- Money» «Le Figaro»), the losses amounted to 145 million . dollars, and on JSC “Aluminium of Kazakhstan”, affected 102 million. dollars. Flexibility as a businessman, Mr. Black showed, according to the same media, at the Achinsk Alumina Plant and Bratsk aluminum smelter, where it was created from nothing a quorum for the approval of additional issue of shares.

In pursuit POWER – who they are, he is right

So, based on the fact that suddenly opened forgery, Dnipropetrovsk prosecutor initiate a criminal case. As it turned out, the infinite. The courts twice closed it due to lack of grounds for the initiation. But the “invisible hand” resumed business again and again.

Gradually, the case “moved” to the capital and they became engaged in investigating Kyiv Prosecutor’s Office. In May 2003, the investigating prosecutor’s office in Kiev on the old foundations filed another criminal case. It is in this case in the Guardian’s Office Central GOK ( “Slavutich-Capital”) and registrar ( “Privat”) in July and August this year were carried out searches and seizures of documents. Moreover, data were seized on the owners not only disputed 25% of the shares, and on all 100%. Conduct searches, it should be noted, with a thoroughness. In particular witnesses during a search in Dnepropetrovsk, Donetsk residents were attracted by an expert – a judicial representative of SCM, and gunners, covering the Kiev visitors, not even featured in the report.

But these facts pale before contempt of court. August 15 Goloseevskiy district court cancels the decision of the Kiev prosecutor’s office about the arrest of shares CGOK and points out that the prosecutor’s office “makes it impossible for the functioning of the company and shareholders.” On the same day there is a new decision the prosecutor’s office, which is one in a previous duplicates.

By the way, this decision “PrivatBank” is obligated to inform the shareholders that on further disposal of shares they should contact the prosecutor’s office.

Illogical in this situation and the position of the Prosecutor General that the complaint CGOK shares keeper forwards in the same investigation department, who complained of the arbitrariness of “Slavutich-Capital”.

But forensic prosecutor’s story did not end there. The data obtained during the search of the custodian and the registrar has already featured in the subsequent judicial review, and had no SCM list of shareholders held mailing of invitations to the extraordinary shareholders’ meeting, which he intended to take place on 28 of October. In the agenda: changes in regulations, changes in the management bodies, the issue of transfer of keeping the register. It is important to note that the presence in the hands of 40% stake in the “hands” are able to block major decisions on the state enterprise, what is essentially a Central GOK. For example, the decision to change the composition of management. If you now to immediately choose the desired candidate, and the next time will come 40% of the shareholders represented by one person, the meeting will be incompetent.

Naturally, such an attitude to privacy and the interests of shareholders remained “unappreciated”, and now a number of plant owners to prepare appropriate action against the prosecutor’s office and the courts of Ukraine in the international courts.


The less government involvement in market relations, the more they are harmonious. But when business disputes, to a full-fledged party rights, wedged power structures, warping becomes catastrophic and absurd – the norm. In court proceedings and investigations around the 25% stake CGOK logic of the third branch of government becomes absolutely indecipherable form. But, nevertheless, judicial decisions and actions of law enforcement agencies with respect to the custodian and registrar of the Central Mining shares show the real attitude of the officials to the rights and interests of the owners and the rule of law. Although it would seem, talk from high tribunes about citizen rights, taxpayer and voter every year becomes only more.

According to lawyers, protecting the rights of MDC, is now a case of a 25% ownership stake CGOK preparing for the consideration of the Supreme Court of Ukraine. And if MAT can not remain “immune” to the pressure, and to the court in Strasbourg. Most likely, the struggle on the question of ownership of this stake will be continued.

REFERENCE. JSC “Central GOK” located in the center of Krivoy Rog iron ore basin. The plant specializes in the extraction and production of iron ore (concentrate and pellets) for the metallurgical industry, and produces about 15% of produced in Ukraine iron ore pellets and 9% of all-Ukrainian iron ore concentrates. In the state-owned fixed 50% of its shares.


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