Aequo team successfully protected the interests of “Rozdilska Tsegla” LLC in the state property privatization dispute in the Supreme Court of Ukraine.
The subject matter of the privatization dispute was an appeal of a share purchase agreement of a state-owned enterprise offered for sale by the State Property Fund of Ukraine (SPFU). The agreement, which was legally concluded between Aequo’s client “Rozdilska Tsegla” LLC and SPFU, was appealed by a disqualified bidder. The claim was grounded on the inability of the disqualified bidder to provide the SPFU with the full set of documents required from the potential buyers pursuant to privatization regulations. In particular, the disqualified bidder could not provide quarterly financial statements, as it was a newly created legal entity, which existed for two weeks at the time of holding the auction.
The Supreme Court’s decision in this case became a precedent. In particular, the Court stated that the newly established entities shall participate in the privatization of the state property with other enterprises on equal terms. Accordingly, they are required to submit all documents envisaged by the Law of Ukraine “On Privatization of State and Municipal Property”. This list includes annual or quarterly financial statements, information about beneficiaries etc. Consequently, the Court refused to satisfy the claim of the disqualified bidder.
«The decision on this case provides a long-awaited clarity regarding the scope of documents, which the newly created entities must provide to the State Property Fund to participate in privatization. In some cases last year SPFU admitted some participants for participation in actions regardless the lack of the full scope of documents envisaged by the privatization regulations. As a result, some unknown companies with suspicious founders and doubtful financial performance acquired state property, avoiding the Law. The Supreme Court decision should stop this practice.
For our client the Court’s decision became an extra validation of the transaction with the State Property Fund. Our team advised the client from the very beginning when the agreement was concluded, therefore we shared responsibility for each decision taken. We are responsible for the result and glad that clients appreciate the quality of our services and entrust us their key projects», — comments Olena Pertsova, attorney-at-law, Aequo' counsel.