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29.06.2017

The illegal takeovers in the agricultural sector: what's going on?

GROWING NUMBER OF THE ILLEGAL TAKEOVERS RESULTS IN ILLEGAL REDISTRIBUTION OF PROPERTY AND ASSETS, AND HAS A NEGATIVE IMPACT ON INVESTMENT ATTRACTIVENESS OF UKRAINIAN BUSINESS AS THE WHOLE.

At the present time, the agrarian sector like other sectors of the Ukrainian economy is experiencing crisis moments. The situation is aggravated not only by the growth of economic risks and not only by the uncertainty in resolving the issue of the open land market, but also by the continuing tendency for the illegal takeovers of the agricultural companies. The increasing number of the illegal takeovers leads to illegal redistribution of property and assets, and has a negative impact on investment attractiveness of Ukrainian business as a whole.

Talking about "innovations" in the sphere of the illegal takeovers, it is should be mentioned that they are mostly caused by the changing legislation in the sphere of state registration of companies and their property. Notwithstanding the type of the illegal takeover a victim company faces, whether it is "white", "gray", "black" or "greenmail", in most cases it happens to be a forgery of the documents that are used to make changes in the relevant State register. For example, manipulations with the registers took place when attempts were made to commit the illegal takeover of the agricultural private enterprise Chumaky (2014), owned by the international investment group Unison, and also while the attack on state owned Suntrade company (2015), Agrosvit (2016). These cases are united by the fact that they were aimed at establishing control over the mentioned enterprises. Thanks to the legal loopholes in the regulatory legal acts regulating the work of state registers, this direction of the illegal takeovers obviously will not cease to exist in the near future.

The harvest itself is the vulnerable area in agricultural business and the desirable object of the illegal takeover. In this case, the manipulations are aimed not at working with state registrars, but at imitating debt obligations in the case of "white" raids and at establishing physical control over the harvest, if the invaders work in a "black" way. In the latter case, the harvest is simply being reaped by unidentified individuals with unidentified agricultural machine and taken away in an unknown direction.

In the legal community, it is not the first year that there has been a dispute about what can be an efficient instrument for protection against the illegal takeovers. One of the possible options is the criminalization of the actions of the invaders that commit the illegal takeovers. However, court practice testifies to the ineffectiveness of the investigating of the illegal takeover cases - out of the total mass of criminal proceedings, only a few resulted in a guilty verdict. Whatever the legal debate result will be, it is obvious to everyone that there is a need to strengthen state control over the issues of property redistribution. In the meantime, the owners of agricultural business are left to rely on qualified lawyers that build a security system for them from the illegal takeovers.

Interview with Evgenii Kovtunenko for the Agravery resource http://agravery.com/uk/posts/author/show?slug=rejderstvo-v-agrosektori-so-vidbuvaetsa.

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