Evgeny Zverev commented on the next stage of the conflict at Kirovsky Zavod for RBC daily.
19 December 2011
Conflict of shareholders of Kirovsky Zavod reached the Supreme Arbitration Court presidium. The SAC decided to re-examine the case on recovery from Georgy Semenenko, General Director of the plant, of 579.5 mln rub. to the benefit of the plant as a compensation for losses. The SAC believes that inferior courts incorrectly distributed the burden of proof, having imposed it only on the plaintiffs. According to the SAC’s statistics, during the first half of 2011 80% of judicial acts considered by the court presidium in exercise of supervisory functions were cancelled.
In July 2010 the action of Doroga company, the minority shareholder of Kirovsky Zavod, against Georgy Semenenko for recover from him of 579.5 mln rub. was not sustained by the Arbitration Court of Saint Petersburg and Leningrad Oblast. Thereafter, similar decisions were made by the courts of appeal and cassation. However, by the ruling of December 12, 2011, the SAC presidium decided to re-examine the case in exercise of supervisory functions.
Pursuant to the SAC’s documents, by the resolution of Mr. Semenenko, in February 2007 Putilovsky Foundry, 100% subsidiary of Kirovsky Zavod, was established with the authorized capital in the amount of 10 ths. rub. A month later Kirovsky Zavod made a monetary contribution into the capital of its subsidiary in the amount of 579.99 mln rub.
At the end of 2008 Putilovsky Foundry purchased 65.297% shares in OOO Sigma-Invest for 612.8 mln rub. In December 2007 these shares belonged to Mr. Semenenko and his mother, and since the end of 2007 till the end of 2008 their owners have been changed three times. First, the shares of Sigma-Invest passed into the ownership of Fraxinius Holdings Ltd, Cyprus, then of Baylight Holdings Ltd incorporated in the British Virgin Islands, and later of OOO Intercon Profi, Russia, which sold them to Putilovsky Foundry. OOO Doroga thinks that these transactions were interrelated and resulted in sale at an overestimated price of property of Mr. Semenenko and his affiliate to the subsidiary of Kirovsky Zavod, which caused damage to this plant. The plaintiffs also give evidence explaining why they consider price of sold shares to be overestimated referring to valuation of assets of OOO Sigma-Invest.
In the SAC’s opinion, the courts that examined this case have incorrectly distributed the burden of proof, having imposed the entire burden on the plaintiff. At the same time, as specified in the SAC’s ruling, “the plaintiff provided rather foundational proof... that the mentioned transactions had features of interrelated transactions aimed at the shared objective, namely, transfer title from Georgy Semenenko and his mother to Putilovsky Foundry.” “In these circumstances… it shall be Semenenko on whom the burden of proof from the contrary shall be imposed,” judges of the Supreme Arbitration Court conclude.
Petr Frolov, representative of the plaintiff, notes that in all disputes with shareholders General Director of Kirovsky Zavod refuses to disclose information on the plant, its subsidiaries as well as on those transactions which are settled by them.
In its turn, the Press Service of Kirovsky Zavod reminded that the plaintiffs in this case lost it in three instances as well as all other cases. “We think that the SAC will also make a fair award and will dismiss the claim of the plaintiffs,” a message of the Press Service says.
According to Evgeny Zverev, senior lawyer of S&K Vertical law firm, the SAC presidium re-examines acts of arbitration courts if it establishes that the contested document violates uniformity of interpretation and application by arbitration courts of the rules of law, infringes human rights and freedoms or infringes rights and legal interests of the general public or other public interests.
Recall that the conflict of two groups of shareholders, those who control about 25% of plant shares, on the one part, and those who are close to Georgy Semenenko, head of the plant, on the other part, has already lasted for about four years.