During March–April 2022, the Ukrainian authorities adopted a set of measures to address the challenges and uncertainties that joint stock companies ("JSC") have faced since the start of the war.
General shareholders' meeting
On 16 March 2022, the National Securities and Stock Market Commission ("Commission") adopted Decision No. 176 "On amendments to the temporary procedure for the calling and remote holding of general shareholders' meetings and the general meeting of corporate investment fund participants" ("Temporary Procedure").
The Commission introduced the following key amendments applicable to JSCs during the period of martial law:
- during martial law a general shareholders' meeting ("GSM") may be held only remotely and according to the Temporary Procedure;
- if it is impossible to hold the GSM under the Temporary Procedure, or if a supervisory board decides that holding the GSM is inexpedient, the GSM must be held within 90 days after the termination of martial law. Thus, the annual GSM required to be held by 30 April may be postponed;
- the GSM will be deemed valid if three conditions for the calling and holding of the GSM indicated in the Temporary Procedure are met. These conditions concern the peculiarities of obtaining the lists of shareholders from the National Depository of Ukraine;
- the minutes on the result of registration, voting, and minutes of the GSM may be signed with a qualified electronic signature (with the exception of those that must be notarised).
On 16 March 2022, the Commission adopted Decision No. 177 "On the peculiarities of the functioning of governing bodies of joint stock companies during the period of martial law" (as amended on 4 April 2022). Under this decision, the powers of governing bodies of a JSC that expire during martial law are deemed to be extended until the date of termination of martial law (unless a GSM was held where new governing bodies were elected/re-elected).
Transactions with a JSC's shares and other securities
On 8 March 2022, the Commission passed Decision No. 144 "On streamlining operations in the capital markets for the period of martial law" (with the latest amendments dated 24 April 2022). The Commission temporarily suspended the offering, circulation and redemption of all securities and all operations in the depositary system of Ukraine, with exceptions listed in this decision. Consequently, in relation to JSCs, the following operations are temporarily impossible:
- the sale and purchase of shares and other securities;
- encumbrances of securities; and
- squeeze-out, sell-out and buy-out procedures.
Disclosure of regulated information by JSCs
On 13 March 2022, the Commission passed Decision No. 161 "On disclosure of regulated information by securities issuers". The Commission cancelled the deadlines for the disclosure of the regulated information by securities issuers, including JSCs, during the period of martial law.
After the termination of martial law, JSCs must disclose the regulated information within the following deadlines:
- annual information for 2021 – within 90 days after the termination of martial law;
- quarterly information for the respective quarter of 2022 – together with the annual information for 2021; and
- special information about facts that occurred during martial law – within 30 days after the termination of martial law.
As can be seen, following the russian invasion, the Ukrainian authorities adopted a range of measures to regulate the activities of JSCs during the period of martial law in Ukraine. These measures are somewhat similar to those adopted in response to the COVID-19 pandemic (e.g., the remote holding of the GSM, which was introduced in Ukraine in 2020).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.