The President of Ukraine has signed Law No. 289-VIII “OnAmendments to Some Legislative Acts of Ukraine relating to Investors’ Rights Protection”(the “Law”)aimed at deregulating the economic activities of joint-stock companies in orderto enhance their attractiveness to investors. Another goal of the law is toimplement stricter requirements towards listed public joint stock companies toensure a higher level of protection for minority investors’ rights and promoteUkraine’s compliance with the requirements of the Ukraine-EU AssociationAgreement.
In particular, the Law provides for the introduction ofderivative action (i.e., the right of a minority shareholder to sue fordamages in favour of the joint-stock company); the introduction of liabilityfor officials of business companies in case their unlawful actions inflicteddamages to the company; establishing the procedure to invalidate a legaltransaction carried out by an official and refunding profits obtained as aresult of such a transaction; granting a claimant the right to be reimbursed bythe company for the expenses incurred as a result of court proceedings relatingto the claim against the company’s official for indemnification of damagesinflicted on the company – within the limits of amounts actually received bythe company; creating the conditions for the transition of quasi-publicjoint-stock companies to the private form; introduction of the institute of“independent directors” that will represent the interests of minorityshareholders in public joint stock companies; and establishing a detailedprocedure for regulating transactions with signs of interest which will take intoaccount interests of all shareholders.
The Law must be published in the official bulletin and will takeeffect as from 1 May 2016, except for clauses 4 (regarding the procedure forcertification of the powers of attorney right to attend and vote at the company’sgeneral shareholders’ meetings) and 5 (removing the requirement to specify thelocation in the constitutional documents of the company) of Section І, whichwill take effect on the day following the day of publication.