Kovalchuk Energy: How Mosenergosbyt's Minorities Struggle with Inter RAO

27 September 2017

In June 2015, Boris Kovalchuk, the chairman of Inter RAO holding and son of the Rossiya bank owner, Yuri Kovalchuk, announced the intention of Inter RAO to consolidate 100% of Mosenergosbyt (MES). At the beginning of September 2017, the holding announced that it had finally collected 95.17% of MES shares and has the right to buy back shares from minority shareholders (the so-called squeeze-out).
It will not be easy to do this. Minority shareholders of MES have been trying for a year to prove that Inter RAO got the right to squeeze out bypassing the law. Not having succeed in two instances, minority shareholders on Wednesday, September 20, won in the cassation. Forbes, with the help of lawyers Dmitry Lobachev and Alexander Kondratyuk from Khrenov & Partners, figured out the reasons for the corporate dispute.

Hearings on the second lawsuit were also not in favor of minority shareholders. The arbitration court left the claim without satisfaction, referring to the fact that the rights of the plaintiffs were not infringed during the voting. "In fact, the court is right," says the project leader of Khrenov and Partners Dmitry Lobachev. - The plaintiffs participated in the meeting and voted on it. It follows from the acts that 98.7% shareholders voted for increase of the authorized capital, and the court found that the plaintiffs do not have a shareholding that would give them the opportunity to influence the voting. And two of the plaintiffs took part in the additional emission of shares, exercising their pre-emptive right to purchase shares".

But at the cassation stage on Wednesday, September 20, the court nevertheless took the side of the minority shareholders, transferring the case for a new consideration. The lawyer of Khrenov and Partners, Alexander Kondratyuk, believes that the court has moved away from the formal statement that the rights of minority shareholders have not been violated, and now it should decide whether Alor Invest was acting as an interested party and whether its shares had to be taken into account during the voting.

Nevertheless, to date Inter RAO managed to buy more than 95% of MES shares. According to Alexander Kondratyuk, even the continuation of the trial does not prevent the majority shareholders from implementing a squeeze-out. "In this case, the only way to somehow ensure the protection of property and corporate rights for minority shareholders will be the imposition of interim measures to prevent the procedure for the forced repurchase of shares," Kondratyuk said.



Tha whole article in Russian is here









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No na kassatsii v sredu, 20 sentyabrya, sud vse zhe vstal na storonu minoritariyev, peredav delo na novoye rassmotreniye. Yurist «Khrenov i partnery» Aleksandr Kondratyuk schitayet, chto sud otoshel ot formal'noy konstatatsii togo, chto prava minoritariyev ne byli narusheny, i teper' yemu sleduyet reshit', deystvoval li «Alor Invest» kak zainteresovannoye litso i nuzhno li bylo uchityvat' yego aktsii pri golosovanii.


But at the cassation on Wednesday, September 20, the court nevertheless took the side of the minority shareholders, transferring the case for a new consideration. The lawyer of Khrenov and Partners, Alexander Kondratyuk, believes that the court has departed from the formal statement that the rights of minority shareholders have not been violated, and now it should decide whether Alor Invest was acting as an interested party and whether its shares had to be taken into account during the voting.





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