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INSTITUTE OF LEGISLATION AND LAW SCIENCE
WITH THE GOVERNMENT OF THE RUSSIAN FEDERATION
117218, Moscow, Bolshaya Cheremushkinskaya st., # 34
Tel./Fax (095) 719-7602
July 19, 2001 ¹ 01-80/82
EXPERTS’ OPINION
JSC Yugraneft Corporation’s Claim on the Legality of an Extraordinary General Meeting of Shareholders of the Company dated June 28, 2001 and Protocol # 1 prepared representatives of “TNK-Nizhnevartovsk”
- Materials submitted to our office indicate that JSC “Yugraneft Corporation” was created in the city of Nizhnevartovsk (Tyumen region). Partners in this joint stock Company are “NoreX Petroleum Limited” and “Chernogorneft”. In accordance with data from the State Registry the first partner owns 600,000 common shares, which equals to 97.6 % of its votes in the Company, and the second partner – 14,500 shares, which equals to 2.36 % of its votes in the Company. In compliance with information from “Energoregistrator”, a company conducting registration of shareholders, as of June 27, 2001 “Yugraneft Corporation” issued 614,500 common registered shares.
As a result of legal dispute and arrest put on part of “NoreX Petroleum Limited’s” shares based on bailiff’s writ of June 26, 2001 of Moscow, “NoreX Petroleum Limited’ was prohibited to vote with 497,142 of its shares at the general shareholders’ meeting.
On June 28, 2001 two general shareholders’ meetings of JSC “Yugraneft Corporation” were held. Only representatives of ”NoreX Petroleum Limited” participated and voted in the first meeting. On the same day the second shareholders’ meeting was organized by “TNK-Nizhnevartovsk”. Only representatives of this Company voted in the second meeting. Protocol ¹ 1 passed a resolution to terminate Director General’s powers before the expiry of her term of office and to appoint a new Director General.
Materials submitted for our examination indicate many legal violations on the part of “TNK –Nizhnevartovsk” when holding a general meeting of JSC “Yugraneft Corporation” – provisions of the Civil Code of Russia, of the Federal Law on Joint Stock companies dated December 12, 1995, as well as other legal acts.
II. Legal violations by “TNK –Nizhnevartovsk” when holding an extraordinary general meeting of JSC “Yugraneft Corporation” are as follows:
- Meeting was called and held not by the Company’s shareholders.
“TNK-Nizhnevartovsk” can not be recognized as JSC “Yugraneft Corporation’s” shareholder. It means that “TNK-Nizhnevartovsk’s” representatives, not being partners in JSC “Yugraneft Corporation”, did not have the right to vote at the general meeting of the shareholders.
Article # 44 of the Law on Joint Stock companies declares that the State Registry of shareholders determines members of a joint stock company and their rights at a specific date. Lists of shareholders that have rights to vote at general meetings are compiled only based on the State Registry.
Main requirements to the content and procedures of Registry maintenance are determined by the Law on Securities Market of June 22, 1996 (Item # 8), by Decrees of the President of the Russian Federation and by Provisions on Maintenance of Registry of the holders of registered shares approved by the Federal Committee on Securities Market dated October 2, 1997 ¹ 27 (Bulletin of the Federal Committee on Securities Market of Russia, 1997, ¹ 7).
In accordance with the certificate received from a special registry office “Energoregistrator”, as of June 27, 2001 partners in JSC “Yugraneft Corporation” are “NoreX Petroleum Limited” and “Chernogorneft”. Even if in fact shares of “Chernogorneft” now belong to a new owner “TNK-Nizhnevartovsk”, it can not be recognized as a shareholder of the Company and does not have the right to vote at a general meeting of the shareholders until the necessary changes have been made in the Registry of Company’s shareholders.
- Protocol ¹ 1 of the extraordinary general meeting of June 28, 2001 prepared by “TNK-Nizhnevartovsk” indicates incorrect total number of shares, incorrect number of shareholders in JSC “Yugraneft Corporation” and incorrect number of votes that belong to the participating parties.
Protocol ¹ 1 states that total number of votes that belong to JSC “Yugraneft Corporation’s” shareholders is 1,000,000 votes. In fact, as it was mentioned above, and in compliance with the Registry, the number of shares of JSC “Yugraneft Corporation” is 614,500.
As it is stated in item ¹ 1 of the Experts’ Opinion “TNK-Nizhnevartovsk” is not a shareholder of JSC “Yugraneft Corporation”. It is recorded in the Registry of shareholders that JSC “Yugraneft Corporation’s” shareholder “Chernogorneft” has 14,500 shares. This is the reason why even in case of transfer of “Chernogorneft’s” shares to a new owner, a new owner can vote based on this number of shares and after necessary changes have been made in the Registry of “Yugraneft Corporation’s” shareholders.
It is stated in the Registry of the Company’s shareholders that the shareholder “NoreX Petroleum Limited” owns 600,000 shares in “Yugraneft Corporation”. Though “NoreX Petroleum Limited” was prohibited to vote with 497,142 common registered shares at the general meeting, it still had the right to vote with the remaining 102,858 shares.
Based on the above mentioned facts, number of voting shares at the general shareholders’ meeting of “Yugraneft Corporation” at the time of the meeting was distributed as follows: “NoreX Petroleum Limited” - 102,858 shares, “Chernogorneft” – 14,500 shares. This distribution of voting shares should have been reflected in the Protocol of the general shareholders’ meeting of “Yugraneft Corporation”.
CONCLUSION
Violations listed above, give legal grounds to recognize illegal nature of “TNK-Nizhnevartovsk’s” actions when holding an extraordinary general shareholders’ meeting of “Yugraneft Corporation”. Protocol ¹ 1 and decisions of the meeting do not have any validity. Article ¹ 49 (item ¹ 8) of the Law on Joint Stock Companies stipulates shareholders’ right to file an appeal as to the decisions of general meetings made in violation of the Law. In this particular case decisions were not made by the Company’s shareholders and despite the court’s statements produced by “TNK-Nizhnevartovsk”, Protocol ¹ 1 does not have legal validity.
Honoured Science Worker
Ph. D. Legal Sciences
Professor
Leading Researcher of the Institute
- T.Masevich (signature)
Seal of the Institute of Legislation and Law Science
with the office of the President of the Russian Federation
Date 19.07.2001
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