In March 2014, this blog featured an article discussing
the effect of the recent crisis in Ukraine on M&A activity.
The crisis began in November 2013 when Ukrainians protested en
masse after then-president Viktor Yanukovych failed to sign an
association agreement with the European Union. Yanukovyvh was
ousted in February 2014. During that time and following, violent
protest, armed conflict between separatist forces and the Ukrainian
government, and the annexation of Crimea by Russia, played a
substantial role in the contraction of Ukraine's economy by 8% in the year 2014. Since this time,
Ukraine has undertaken a number of steps that may signal an
improvement in the economy. For example, on January 1, 2016, Ukraine officially joined the
Deep and Comprehensive Free Trade Area to reduce trade barriers
with the EU markets and enhance regulatory standards.
Since Ukraine's economy is highly dependent on two highly
polarized parties – the EU and Russia – any
improvements to relations with one trading partner incites tension
within the other. A recent report by MergerMarket Group, Open for Business: M&A in
Ukraine, highlights the contraction of
Ukraine's M&A activity in recent years. According to the
report, M&A deal volume in 2015 decreased to only 26 deals
worth a total of USD $150 million. In contrast, there were 34 deals
worth a total of USD $831 million in 2014.
On the flipside, the report notes the upward potential for
M&A activity in several key industries, including financial
services, energy, mining, utilities and telecommunications. One key
finding is that although there are only four reported deals in Q1
of 2016, the total value of those deals already surpasses the total
value of all deals conducted in 2015.
Although the financial services sector is likely the most viable
target for future M&A activity, the improvement of
Ukraine's economy will depend on enhanced privatization of
state-owned enterprises. Ukraine's State Property Fund, its
privatisation authority, is planning to sell approximately 88 state
enterprises in 2016. The sale of these large assets, encouraged by
planned tax reforms, efforts to counter corruption and greater
protection for minority shareholders, could help lift Ukraine out
of its crisis.
The author would like to thank William Goldbloom, articling
student, for his assistance in preparing this legal
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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