Exercise and Protection of the Right to a Fair Price for the Compulsory Sale of Shares in Case of a Dominant Controlling Stake Purchase in the Conditions of Corporate Legislation Amendment.

Abstract

The paper deals with peculiarities of exercise and protection of the minority shareholders right to a fair price for the compulsory sale of shares by them in case of purchase of a dominant controlling stake by another shareholder (shareholders) in the conditions of corporate legislation amendment.
 In the process of exercising the right to compulsory redemption of shares by the owner of a dominant controlling stake (more than 95 percent of common shares), issues arose related to the violation of the right of the remaining minority shareholders to receive a fair price for the compulsory sale of shares. The problem in exercising the right of shareholders to have their shares purchased at a fair price by the owner of a dominant controlling stake is caused by the wrong wording of Art. 95 of the Law of Ukraine "On Stock Companies" regarding the need to involve a subject of professional appraisal activity, which violates the general rule established by the law on the highest price. Thus, considering paragraph 2, part 3 of Art. 95 of the Law of Ukraine "On Stock Companies", the market value of compulsory redemption shares must always be determined by the subject of professional appraisal activity, regardless of whether the shares circulate on organized capital markets or not.
 In order to overcome the obstacles to exercise of the right to a fair price for the compulsory sale of shares established by the shareholder law, it is necessary to exclude from it the provision on the mandatory involvement of an appraisal activity subject in case of an independent appraisal of the value of the partnership's shares at the request of minority shareholders who own 5 percent or more shares (in the case provided for by Article 95 of the law, more than 1 percent of the partnership's shares).
 The method of protecting the right to a fair share price in case of purchase of a dominant controlling stake, developed in judicial practice, was enshrined in Art. 95 of the newly adopted Law of Ukraine "On Stock Companies". Thus, according to part 21 of this article, shareholders who believe that the mandatory sale price does not meet the requirements established by parts five to seven of this article have the right to apply to court with a demand for recovery from the claimant for compensation of the proper value of the shares, purchased from them in accordance with such claim.