There is reason to believe that OLMAFARM Ltd. deliberately violated the court ruled ban and voted in a false Extraordinary Shareholders’ meeting
JSC Olainfarm has a reason to suspect the interference of Laila Medina, Deputy State Secretary for Legal Affairs at the Ministry of Justice, in the operation of the company. This can be inferred from publicly disclosed information provided by OLMAFARM Ltd. that the Ministry of Justice has been involved in an attempt to influence a dispute between Valerijs Maligins’ heir and the shareholders of JSC Olainfarm. The official from the Ministry of Justice has issued a favorable opinion to a particular shareholder, OLMAFARM Ltd., which allows to influence the company operations and the work of institutions under the authority of the Ministry, such as the Register of Enterprises, with the purpose of making decisions that are favorable for themselves, while ignoring the rights and views of other shareholders
The above is also confirmed by the fact that the largest shareholder, OLMAFARM Ltd., which has been denied voting rights by the court, claims that the Ministry of Justice has assessed the circumstances of the dispute with the heirs of JSC Olainfarm, incl. pending civil proceedings. It has allowed the Ministry of Justice to conclude that the arguments of OLMAFARM Ltd. are justified, but the court’s decision, in the context of a dispute with the heirs of JSC Olainfarm, regarding the denial on the use of voting rights is questionable.
JSC Olainfarm has addressed these facts with official letters to both the Ministry of Justice and the Register of Enterprises.
The conclusion by the Ministry of Justice is considered to be a gross violation of the principle of the independence of the judiciary and interference with the work of the judiciary. At the same time, it is the exact opposite of the Ministry of Justice’s previous position of not intervening in disputes between the parties.
Although in its opinion, the Ministry of Justice does not refer directly to any particular case, in the view of JSC Olainfarm, it does analyze a specific case that is currently in the process of litigation. The above is also confirmed by the fact that the Financial and Capital Market Commission (FCMC) has approached the Ministry of Justice and asked it to provide an answer in connection with the shareholders’ meetings of JSC Olainfarm.
According to publicly available information distributed by Peteris Rubenis, Chairman of the Board of OLMAFARM Ltd., the opinion by the Ministry of Justice and the explanation by the FCMC of determining the quorum at JSC Olainfarm Shareholders’ meetings has served as the basis for holding the Shareholders’ meeting in a manner not according to the Commercial Law.
A fraudulent Shareholders’ meeting has been held
It is known that Martins Tambaks has submitted unlawful amendments of the Supervisory Council and the Management Board to the Register of Enterprises, claiming that the Extraordinary Shareholders’ meeting allegedly took place near the premises of 5 Rupnicu Street, Olaine, at 11:36AM. This meeting has not been convened by the Management Board in accordance with the regulatory enactments and thus, in the opinion of JSC Olainfarm, it cannot be considered as an Extraordinary Shareholders’ meeting. This allows JSC Olainfarm to conclude that false news and a forgery of an Extraordinary Shareholders’ meeting were submitted to the Register of Enterprises. It should be brought to attention that Articles 272 and 275 of the Criminal Law request liability for the distribution of false information to a public authority and the falsification of documents. It should be emphasized that on 24 January, the only legitimate Extraordinary Shareholders’ meeting of JSC Olainfarm was convened at 11:00AM and was not held due to a lack of quorum.
This unrecognizable meeting has not been convened and it is not clear which JSC Olainfarm shareholders took part in this fraudulent meeting. The Commercial Law and the Law on the Financial Instruments Market stipulate the exact procedure for convening and holding an Extraordinary Shareholders’ meeting. Such a meeting has not been convened by the Management Board of JSC Olainfarm in accordance with the regulatory enactments and thus cannot be considered as a legitimate JSC Olainfarm Extraordinary Shareholders’ meeting.
OLMAFARM Ltd. has violated the court prohibition
JSC Olainfarm has reason to believe that OLMAFARM Ltd. has deliberately violated the court prohibition and voted on all issues on the agenda during the fraudulent meeting. This reinforces the suspicion that these persons have attempted to obtain an unlawful result through formal legal means in order to take control of JSC Olainfarm. In addition, JSC Olainfarm believes that the company should ensure equal shareholder protection. Publicly available information indicates that some of JSC Olainfarm shareholders have already condemned this behavior as unfair and unlawful.
The procedure for convening Shareholders’ meetings has been clearly defined by the legislator, amongst other things providing the right to all shareholders to be notified of an Extraordinary Shareholder’s meeting. The rights of other shareholders to participate in the meeting and to exercise the rights of shareholders specified in regulatory enactments were denied due to the lack of compliance with the procedure of convening and holding of the meeting.