Bank precedent: what are the chances to contest rehabilitation. Case study, case №А40-169963/14

23 august 2018 2018-08-23


Claimant – Baltiyskiy Torgoviy Dom, OOO, owned by Andrey Isayev and Oleg Shigayev, former majority shareholder in Baltiyskiy Bank (99.7%); respondents – Central Bank, Baltiyskiy Bank.


Claimant – KIAP (КИАП).


Isayev and Shigayev could not reach a compromise on the sale of Baltiyskiy Bank as a result of which the latter went bankrupt. Alfa Bank took over rehabilitation process. Considering that Baltiyskiy Bank's own funds fell below zero and amounted to RUR minus 16.1 million, Central Bank decided to reduce its share capital to RUR 1 upon which additional issue of shares was effected. This resulted in Alfa Bank becoming 89% shareholder of Baltiyskiy Bank while the share of the former majority shareholder was diluted to 0.000005%.


Baltiyskiy Torgoviy Dom appealed allegedly illegal reduction of the share capital and share issue, stating that both were in breach of its rights.


Considering that the bank's own funds amounted to a negative figure, decisions made by the Banking Supervision Committee were found justified.


The claimant contested additional share issue (case №А40-3562/2015) and transaction on acquisition of additionally issued shares by one of the investors (case №А40-3547/2015), both – with no success.


There aren’t that many cases alike in the current case law in which bank’s rehabilitation is contested by minority shareholders; neither of such attempts was successful. In this circumstances the case at issue is precedent-setting – before that banks’ majority shareholders have not tried contesting rehabilitation.

Rehabilitation usually results in shareholders losing control over the bank due to the fact that their stakes are diluted, at the same time new investors step in. This happens as a result of share capital reduction to the amount of their own funds and as a result of additional share issue. Since such actions are provided by the law, Central Bank and temporary administration acted in accordance with effective rules.

Nevertheless, Baltiyskiy Bank's shareholder still had a chance to win the case if he succeeded in proving that the Central Bank failed to correctly determine the amount of the bank's own funds, which in turn would have meant that it was not entitled to reduce share capital and convert shares. However, the court was of the opinion that financial indicators were calculated in compliance with the law.

Пресненская набережная, 6 строение 2 123112 Москва
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