Verkhovna Rada passes law “On Joint Stock Companies”

Yesterday, the Verkhovna Rada of Ukraine adopted the long-expected law “On Joint Stock Companies.” The law was supported by a total of 358 votes, including support from the Party of Regions, Tymoshenko Bloc, Communist Party, Lytvyn Bloc and Our Ukraine. According to the American Chamber of Commerce in Ukraine, the law is in general compliance with EU provisions in the sphere of corporate governance and principles recommended by the OECD and other international institutions. The new law brings in focus firmer conditions to protect the rights of shareholders in Ukraine and removes several gaps in current legislation regarding the establishment and operations of joint stock companies. The law will be effective after six months after publication. Concorde Capital: As the majority of Our Ukraine MPs, the de facto pro-presidential party, did not support the law, it stands a high probability of being vetoed by the president. On the other hand, the Tymoshenko and Party of Region’s combined 310 votes would be sufficient to override the veto. We view adoption of the law as a great step toward protecting the rights of minority shareholders in Ukraine and removing loopholes often utilized by corporate raiders.