The President of Ukraine has signed Law No. 289-VIII “On Amendments to Some Legislative Acts of Ukraine relating to Investors’ Rights Protection” (the “Law”) aimed at deregulating the economic activities of joint-stock companies in order to enhance their attractiveness to investors. Another goal of the law is to implement stricter requirements towards listed public joint stock companies to ensure a higher level of protection for minority investors’ rights and promote Ukraine’s compliance with the requirements of the Ukraine-EU Association Agreement.
In particular, the Law provides for the introduction of derivative action (i.e., the right of a minority shareholder to sue for damages in favour of the joint-stock company); the introduction of liability for officials of business companies in case their unlawful actions inflicted damages to the company; establishing the procedure to invalidate a legal transaction carried out by an official and refunding profits obtained as a result of such a transaction; granting a claimant the right to be reimbursed by the company for the expenses incurred as a result of court proceedings relating to the claim against the company’s official for indemnification of damages inflicted on the company – within the limits of amounts actually received by the company; creating the conditions for the transition of quasi-public joint-stock companies to the private form; introduction of the institute of “independent directors” that will represent the interests of minority shareholders in public joint stock companies; and establishing a detailed procedure for regulating transactions with signs of interest which will take into account interests of all shareholders.
The Law must be published in the official bulletin and will take effect as from 1 May 2016, except for clauses 4 (regarding the procedure for certification of the powers of attorney right to attend and vote at the company’s general shareholders’ meetings) and 5 (removing the requirement to specify the location in the constitutional documents of the company) of Section І, which will take effect on the day following the day of publication.