METHODS OF THE PROTECTION OF MINORITY SHAREHOLDERS' RIGHTS IN DISPUTES OF MANDATORY SHARES SALE

Abstract

Background. The institution of mandatory sale of minority shareholders' rights at the request of a person (group of persons) who owns a dominant controlling stake (squeeze-out) is new for the theory and practice of the domestic corporate law. In the legislation of the EU countries, a public offer is a mechanism that guarantees the protection of minority shareholders in the process of redistribution of corporate control and takeover of a joint-stock company and ensures a balance of private and public interests in a joint-stock company in the process of the exit of a public company from the regime of publicity and the termination of share trading on the regulated stock market. The updated legislative regulation of Ukraine in the part of the mandatory sale of shares (squeeze-out) has gaps in the part of special methods of the protection of minority shareholders' rights and interests violated by such a transaction, for example, in case of the understatement of the shares price or non-compliance with the normatively established rules for the procedure of mandatory sale of shares.

Methods. The article analyzed the practice of the Supreme Court aimed to solve this problem and determine methods of protection the minority shareholders' rights in a jurisdictional form. General scientific and special scientific methods are using the article,: system analysis, dialectical, system-structural, analyzed the legal norms, doctrinal provisions and practice of the Supreme Court, which regulate the procedure for determining and choosing methods of protecting the minority shareholders' rights in а jurisdictional form.

Results. Effective and ineffective methods of protecting of the minority shareholders' rights were determined. Among the effective methods of protection, the following were highlighted: recovery of damages, recovery of compensation – the amount of money that is the difference between the fair market value of shares and the price of their mandatory sale, recognition of the right to receive compensation, recovery of acquired property (money) without proper legal basis, recognition voiding the deed of compulsory sale of shares of the minority shareholder-plaintiff by public irrevocable demand, recovery of inflationary losses and 3 % per annum. Ineffective methods of protection were defined as the invalidation the decision of the supervisory board and the invalidation of a public irrevocable demand, the termination of the action that violates the right.

Conclusions. The specified legal regulation without defining in the law special methods of protection and joint liability of the applicant of a takeover bid and persons acting together with him appears to be insufficient. The shares of minority shareholders are redempted without a will, the shareholders are not able to influence the process of the redemption and determination of the shares price and the law does not provide grounds to stop the squeeze-out procedure for the appeal period.