05 April 2016

The Ministry of economic development has prepared amendments to the law "On joint stock companies", aimed not only at simplifying the approval of related party transactions, but also at more complex contestation for shareholders. The initiative seems very controversial to the experts, as it will aggrevate unenviable position of minority shareholders.
Mikhail Budashevsky commented on the amendments.


"On the one hand, the need to simplify procedures for approval of related party transactions is really overdue – primarily this applies to the counting shareholders' votes, said the lawyer of "Khrenov and partners" Mikhail Budashevsky.
On the other hand, the tightening of the regime for contestation is not necessary: "In addition, after clause 2, article 174 of the civil code took effect, it suggests a redistribution of the burden of proof in lawsuits contesting the transactions. Now the plaintiff in this category of cases is in a very unenviable position: he has to prove the violation of the procedure of approval of the transaction, and its unprofitability. However the document does not contain a solution to this problem."