• Which companies may be of interest to raiders
• How the raiders prepare to take over
• The most common capture schemes
• What needs to be done to protect the company from raiders
• What preventive measures will help protect the company from attacks by raiders

raiding is not a unique Russian phenomenon, they also exist in countries with developed market economies. Raiding in Russia took shape as a completely independent, highly profitable and competitive business. A potential investor can easily and inexpensively “order” a raider company for a business or asset he likes. At the moment, the market of raider services has formed, there are companies that have gained considerable technological experience in this area over the years.

Raiding is a big danger for any organization. The criminal business of the raiders covers billions of rubles, causes great damage to all entrepreneurs and slows down the economic development of Russia. According to expert assessment, raiding can ruin a business of any level, if effective measures are not taken.

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The purpose of raiding is to make a profit on the difference between the purchase and subsequent sale of the shares of the target company, which, after the capture, is sold in parts. Usually the material base has a greater value than the conversion of funds into additional capital of the organization.

Known methods of raider takeover include:

Fraud in which the necessary false documents are created, for example, minutes of shareholders' meetings. It is also common to give bribes to registrars, the right officials.

"Greenmail" is one of the types of psychological pressure using threats and various methods manipulation.

Forceful seizure is one of the types of criminal business taking. Today it is becoming less and less popular.

Bankruptcy is the intentional creation or competent use of the debts that the target company already has. The raider initiates bankruptcy proceedings in order to seize control of the organization.

Buying up shares by its very nature refers to quasi-legal methods.

A big threat is the very fact of the presence on the market of organizations competently conducting a raider seizure, since they have a strong staff of lawyers and position themselves as investment firms.

raiding

Raiding - hostile appropriation of any type of property, land plots, forms of ownership. It becomes possible due to an imperfect system, as well as through the use of forceful methods.

Raiding is a process as a result of which one enterprise completely suppresses another, using both legal and completely illegal influences.

Raiding is the appropriation of all property of the company, which is facilitated by emerging business conflicts.

Gray raiding is a method of redistributing funds, which can actually be called criminal. In structure, it may have some semblance of a legal procedure.

Black raiding is absolutely illegal taking of funds. With this method, illegal methods are always used, which are associated with physical violence and may be accompanied by corruption, blackmail, forgery of important documents.

A raider is a person who carries out a raid. “Raider” has English roots: “the raid” - “raid”, “unexpected attack”. The same name is given to an American cruiser that intercepts important enemy messages. This word can also be found in other linguistic cultures. Previously, raiders were called warships serving the government, which attacked ships and settlements enemy states. In the first half of the twentieth century, ships sailing under the German flag were called raiders. Today in economics, this term is used to refer to people and firms that carry out a hostile takeover of other companies.

Greenmailer - a company or individual entrepreneur who is engaged in buying up an important block of shares in an organization, not having the goal of participating in the business, but planning to subsequently resell the same shares. After acquiring the right amount of securities, Greenmailer begins to manipulate them, putting pressure on the firm, filing massive lawsuits in the judiciary. He is trying to achieve such a result when it becomes more profitable for the company to buy its own shares from the greenmailer at an inflated price than to bear legal costs.

A hostile takeover is a legal form of takeover of a firm where the full price is paid for the assets. This is done in order to destroy a competitive company.

The dangers of raiding

Today there are conflicting views on the consequences of such a process as the takeover of one company by another. Some experts believe that raiding is only beneficial economic development freeing the market from uncompetitive companies.

Princeton University professor Jonathan Hendler is sure that "raiding is not only economically inefficient, but also undermines the basic foundations of the state." It contributes to four important problems:

• cause economic losses to companies,
• damage the social sphere,
• harm the stability of the country,
• make the investment market of the state unattractive.

The attack of raiders significantly undermines the company's ability to continue to exist in the market. The new owner is faced with such difficulties as the need to increase the legal protection of the business, the selection of a new management apparatus. Often this involves a large financial outlay. And since the process of raiding in almost all cases is associated with criminal actions, the customer may be in danger that the acquired property may be liquidated.

The degree of danger of raiding, according to experts, has the following characteristics:

• the seizure of property contributes to an increase in corruption in public authorities and the judiciary;
• raiding allows you to legitimize illegal ways of doing business;
• raiding does not benefit the economic development of the state, but may, on the contrary, waste economic resources;
• raiding reduces the investment attractiveness of the state in the international market;
• it is almost impossible to accurately measure the economic damage from raiding, so the threat of capture is often not taken seriously;
• raiding negatively affects the reputation of the entire state in the economic world;
• raiding brings problems and in social sphere: contributes to increased corruption at the state level, often suffer ordinary employees who lose their jobs.

By what signs do raiders choose their "victim"

There is an opinion that raiders are only interested in large industrial facilities and enterprises created in the process of privatization. This is not true. Small and medium-sized businesses are exposed to raider attacks. Moreover, the risks of raiders when seizing such firms are much lower: the owners of small and medium-sized companies cannot provide themselves with qualified protection due to lack of funds.

As a rule, the raider is rarely interested in the business itself, its goal is the assets of the enterprise. The prerequisites for raiding may be a quarrel between business partners, corporate conflicts, dissatisfaction with minority shareholders, the actions of competitors, etc. Many company owners consider it sufficient to bring their block of shares to a controlling stake or appoint “their” top manager. And then they stop paying attention to the protection of the company. It is not right.

Your company is at risk if the following conditions exist:

1. The company has attractive real estate, land and other assets.
2. Conflicts arise between the founders (shareholders).
3. The company operates mainly "in the shadows", double-entry bookkeeping is carried out.
4. Violations of the law were committed during privatization.
5. The organization works in the vertical of interests of the customer.
6. There is no active work with creditors.
7. The company receives significant budget orders.

What mistakes of top managers lead to raider attacks

1. Inability or unwillingness to distinguish the position of a manager from the position of a shareholder. This is the main mistake of top management. It is especially typical for companies that have undergone privatization. The head, having a significant block of shares, considers himself the owner of the company, he is used to treating all the profits of the enterprise as his own, using it for personal purposes. He is not faced with the task of making money as a shareholder, because the profit of the company is already at his full disposal. In such a situation, the temptation to forget about the interests of other shareholders is great. For example, 60% of the shares belong to the head, and the remaining 40% belong to the employees of the company. The manager feels confident and does not think about paying dividends to employees (minority shareholders). In this case, a corporate conflict is inevitable and it will not be difficult for the raider to buy back shares from minority shareholders at an acceptable price.
2. CEO pays little attention to the efficiency of the company. Almost all top managers with whom they had to communicate within the framework of defense projects were sure that their company was operating efficiently (making a profit, all production areas were busy, etc.), was of strategic importance for the industry and the country as a whole. None of the directors independent evaluation enterprise, did not find out how much his company is worth (as a business and as an asset). However, this measure is a priority within the strategy of preventing takeovers. So, if a company has large production areas that are not used, then its chance of becoming the subject of close attention of raiders is very high. It is better to rent out free space, build a warehouse there, that is, use it somehow.
3. The General Director pays little attention to the corporate component of management. Most often, the head of the company deals exclusively with production issues, and not with the joint-stock company (or LLC) as a whole. Joint-stock companies in Russia arose in an era of change, when legislation changed frequently, legal and financial culture left much to be desired, and there was no institution of registrars. Most companies have not yet formalized the procedure for the issuance and placement of shares. The registers of many joint-stock companies are kept in paper form among other documents of the accounting department or the personnel department, and accounting for share purchase and sale transactions is carried out inaccurately. All this allows you to make multiple sales of the same shares.
   Lack of transparent corporate history, minutes of decisions of the board of directors, minutes of meetings of shareholders - all these are vulnerable points of the victim company, which the raider will definitely use in his own interests. It is useful for any CEO, even if he feels prepared for an attack by invaders, to audit the corporate history, the history of real estate and assets owned by the society.
4. Carelessness of management when registering property. The confusion in land and property legislation has led to the fact that the assets of enterprises in most cases are registered with violations. Basically, raiders use this when attacking a company.

Other common managerial mistakes include forging documents, illegally increasing one's shareholding, issuing additional shares without taking into account the rights of shareholders controlled by the invaders.

Ways to minimize risks

1. Clearly fix in the labor contracts of top managers their responsibility for causing losses to society.
2. Make changes to founding documents your company and internal regulations that will limit the powers of top management on a number of issues. In the same documents, note who will exercise control over the activities of the company's management bodies.
3. Instruct top managers to regularly submit to shareholders the financial statements of the company, reflecting up-to-date information on the activities of the company and the state of its assets.
4. Appoint an independent auditor of the company, not controlled by top management.
5. Develop a system of motivation for top managers so that they are interested in making a profit for the company.

Signals of possible raiding

1. Increased inspections by regulatory authorities.
2. Purchase of accounts payable of your enterprise.
3. The emergence of new investors.
4. Requests from shareholders for the provision of certain documents.
5. Increasing demand for your company's shares.
6. Mass filing of lawsuits by your counterparties, as well as the beginning of an unprovoked black PR campaign in the press.

How raiders "work"

Before the start, the raiders select information about the company they are interested in for all the above points. Information is collected from all available sources and a dossier is formed, which indicates:

• name, legal form and official data of the target company, information about an independent registrar for joint-stock companies.
• shareholders and the ratio of their shares;
• specifics of activity;
• annual turnover of funds;
• main property, including all necessary licenses;
• the head of the company;
• collegiate governing bodies;
• composition of the legal department;
• security Department;
• accounting and storage of original documents;
• lobbying opportunities;
• possible contacts with law enforcement agencies;
• marketing resources;
• financial potential;
• communication in the team and relations between shareholders.

How the raiders prepare to take over

The takeover of the enterprise itself usually includes the following steps:

• collecting information about the victim company;
• planning a takeover strategy;
• raider attack.

Raider companies have departments dealing with information intelligence. They monitor the press, communicate with your partners and competitors, analyze the interviews of your company's top managers posted in the media. In addition, the raiders receive the necessary data from the representatives of the enterprise, inventing various legends for this. For example, they may come for an interview, ask you to be interviewed for printed edition, to rent a room. The victim enterprise has no doubts about such legends, and the raider without much effort becomes the owner of information about inner life company, relations between shareholders and the labor collective. Raiders can also engage any of your employees and receive information from him. The recruitment of a source of information within the company, the so-called fifth column, begins with seemingly harmless meetings.

Having accumulated data on the internal life of the victim company, the raider proceeds to collect documents about its economic activities and assets. The information intelligence department studies:

• company property;
• composition of shareholders or founders, register of shareholders;
• relations in the company, conflicts, groups of influences and interests;
• documents: charter, minutes of general meetings, accounting and tax reporting;
• conflicts with counterparties, litigation (if the company is involved in them).

Documents can be obtained from person concerned employed by the company, or from government agencies – tax office, land committee, municipality, etc. High level corruption among officials allows you to get any documents.

Having collected the information, the raiders find out what are the relations between the company's management and law enforcement agencies (Ministry of Internal Affairs, FSB, OMON), they study whether the General Director is able to mobilize the prosecutor's office, authorities, and "administrative resources" as soon as possible.

The next step of the raider is the generation of conflict in the company. It is necessary to control the enterprise, since one of the conflicting parties is a possible partner of the raiders: a potential seller of shares and (or) a source of information within the company (“fifth column”).

A raider attack is the culmination of a carefully planned takeover operation. An important circumstance is the choice of the optimal moment to start the attack. It occurs either during a period of exacerbation of certain problems in the company, or at the time of the absence of the owner and key top managers.

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The most common raiding schemes

A unique takeover plan is developed for each victim company. Of course, within the framework of one article it is impossible to consider all possible options for an attack. But it is useful for the General Director to know the most common schemes.

Scheme 1. Purchase of shares from small shareholders up to a controlling stake. The simplest and most effective method, but it is rarely resorted to, since significant financial investments are needed.

Scheme 2. Minority shareholders hold a "secret" meeting of shareholders and elect new advice directors. He appoints new management enterprises. Majority shareholders are unaware of this. Then the new owners send a lawsuit to the court demanding not to obstruct the new management in the management of the company. The court makes a decision obliging the former management not to interfere with the new director in the performance of his duties.

Scheme 3. Purposeful decrease in the value of the company and the acquisition of its assets. For example, the company may be involved in a large number of litigations, which most negatively affects the value of shares.

Scheme 4. Amendments to constituent documents. Since 2002, we have been operating in our country the federal law"On State Registration of Legal Entities and Individual Entrepreneurs". This document, on the one hand, simplified the registration of legal entities, on the other hand, opened up scope for fraud. State registration of legal entities and changes made to the statutory documents is carried out on the basis of the information provided by the applicant. The applicant is responsible for the accuracy of these data, that is, the registration authority does not verify the information. Raiders submit to the tax office an application to change the General Director of the company, using a fake seal. The tax authorities make an appropriate entry in the Unified State Register of Legal Entities (EGRLE). Then the raider receives a legitimate extract from the register signed by the head of the tax office. Further, the newly-minted director sells the assets to shell companies, which, according to the law, will be bona fide purchasers.

Scheme 5. Forgery of a contract for the sale of assets. After that, the transfer of ownership of the object is officially registered with the state registration authorities. Further, a well-established scheme of resale to shell companies is used.

Scheme 6. Blackmail and bribery of top managers of the company. Invaders can provoke leadership to inappropriate actions. The General Director, seeing the possibility, for example, of losing real estate, decides to urgently sell it to a controlled person. At the same time, the requirement to approve the transaction by the meeting of shareholders is ignored. As a result, the raider has the opportunity to initiate a criminal case against the head of the victim company under Article 201 “Abuse of Power” of the Criminal Code. Further, the raiders begin to blackmail the General Director, using the criminal case as a means of pressure.

Scheme 7. Initiation of the bankruptcy procedure. Raiders buy the debts of the victim company. Then a case is initiated to declare the company bankrupt. Next, "their own" bankruptcy trustee is appointed, and the assets are completely legally, under the hammer, go into the right hands.

Scheme 8. Power capture. The main goal of a power grab is to suppress the defending side morally. In addition, in such a situation, it is easy to seize the necessary documents of the company. A power takeover is usually accompanied by a large-scale PR campaign.

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What needs to be done to protect the company from raiding

Raiders are difficult to fight. They are well versed in the field of corporate relations and have administrative and law enforcement resources. Therefore, it is better for the CEO or the owner of the company, together with lawyers, to develop a plan in advance to repel a corporate takeover. It must be borne in mind that a universal protection system does not exist. Any strategy includes work in several directions. We list the most effective ways protection against hostile takeover:

1. Encumbrance of property - its transfer to trust management, pledge or lease. It is desirable to encumber property for protection purposes with the help of an owner-controlled company.
2. Changing the place of registration of the company by choosing a region in which it is possible to provide the most effective judicial protection and attract "administrative resources".
3. Buying shares of the invader for the purpose of subsequent exchange for shares in your company.
4. Redemption of the company's shares from the invaders at a higher price.
5. Initiation of legal proceedings against the invader, for example, for violation of antitrust, administrative or criminal laws5.
6. Emergency restructuring of an enterprise or transfer of assets to subsidiaries with subsequent separation of these structures.
7. Creation of artificial accounts payable and its withdrawal to "their" companies.
8. If the aggressor is interested in a part of the company, equipment, real estate, such an asset can be withdrawn from the enterprise, and interest in the takeover will disappear.
9. Organization of a PR campaign in the media. The goal is to form a negative image of the invading company.

Ways to protect the company from raiding

Vulnerable points	Protection methods
Ignorance of the situation	Audit of the company's vulnerability points Choice of protection strategy
Management block	Confirmation of the powers of the General Director and the Board of Directors
Assets	Eliminate deficiencies in paperwork Reducing the attractiveness of an asset for a raider
Stock	Transfer of the registry to a professional registrar Accurate processing of all transactions
Shareholders	Conducting a competent dividend policy Resolution of corporate conflicts Creation positive image companies
Counterparties	Analysis of accounts payable and transactions with it

Remember that well-designed internal documents should become the basis for protecting your company: the charter, regulations on branches, regulations on governing bodies, etc. As a rule, these documents are treated rather formally, simply repeating the norms of the current legislation in them. The charter of the company must contain the procedure for conducting transactions with the shares of the company, determine the quorum of the general meeting and the board of directors, establish the procedure for acquiring and redeeming shares, as well as the procedure for amending the charter, etc.

Limit the powers of the company's management (heads of branches and representative offices, commercial and financial directors, chief accountant). The current legislation allows you to limit the possibilities of individual officials. For example, in the regulation on a branch and a power of attorney, you can set restrictions on transactions by branch managers (by amount, types of transactions, etc.). This will avoid the threat of management actions in the interests of the raider. Instruct the security service to regularly check whether the established management procedures are observed in the company, whether internal orders and orders are correctly executed.

When creating a protection system, do not allow excessive bureaucratization of management procedures. Orient (for example, through the mechanism of deferred income) the company's management to increase the value of the business. You can provide in employment contracts with key persons of the company the amount of payments after a certain period. Let's say that the chief accountant, who has worked in the company for five years, is paid an amount in the amount of annual income.

Be sure to audit the corporate history of the company for the last 10 years. This is especially true for enterprises that have gone through the privatization process. It is necessary to find out: how the assets were sold and acquired, what documents need to be restored, how legitimate the transactions are, whether it is possible to initiate a criminal case against managers or major shareholders companies.

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3 tips to the CEO

1. Monitor the market to find out who is interested in taking over your company.
2. Don't let the raiders intimidate you - get on with the business.
3. The best defense is the truth. Be honest with your customers, employees, and government agencies.

What other steps to take

Increase the authorized capital. To do this, they usually expand the membership of the company or increase the nominal value of the shares. The total number of votes increases, while the share of votes that was, for example, bought by raiders, decreases. If the general meeting decides to change the authorized capital, the composition of the company's assets will increase and the costs of the invaders for their acquisition will increase (raiders most often cannot influence such a decision, since they usually have a minority of votes). This will create barriers to takeover. However, it is better to use this method after receiving absorption information. For example, the articles of association may state that the acquisition of 15% or 20% of a company's assets without the consent of its management is considered a hostile takeover. As soon as this threshold is exceeded, the company starts the specified procedure.

Society pledge. By pledging the company, the owner achieves two goals. Firstly, it complicates the capture process itself, forcing the raiders to invest more resources. Secondly, it reduces the liquidity of the enterprise, reducing its economic attractiveness. The imperfection of the pledge is that it is necessary to come up with an obligation that will be secured by the pledge (loan agreement or loan agreement). But you should not be afraid that your company will be mortgaged. By law, the pledgor may sell, exchange, lease, lend property that is part of the enterprise, if this does not lead to a decrease in the total value of the property and does not violate the terms of the loan agreement. True, for all these actions you need to obtain the consent of the mortgagee. In particular, if he does not mind, you have the right to dispose of real estate. For example, you can rent a mortgaged building, only in this case the term of the lease agreement must be less than the term of the pledge agreement. If you decide to sell the property, you will need to terminate the pledge agreement by repaying the debt to the mortgagee.

Establishment of subsidiaries. The decision of the general meeting of participants is not required for the creation of subsidiaries and dependent companies. Taking advantage of this, the company's board of directors or its CEO may establish a subsidiary company with a minimum authorized capital (so that this is not recognized as a major transaction). In the future, in the event of a threat, it will be possible to transfer the assets of the main company to a subsidiary, which will make it possible to evade the takeover. Let's give an example: the company "Alpha" creates a subsidiary company "Beta" with a 70% share in the authorized capital. The other founders of Beta are the minority shareholders of Alfa, who contribute part of their shares as a contribution to the authorized capital. Then Alpha enters into a loan agreement with Beta for some property (it can also be formalized by issuing closed subscription bonds secured by collateral) and deliberately refuses to fulfill this agreement. As a result, the property becomes the property of Beta.

In parallel with this, you can create several more subsidiaries and transfer your other property to them, as well as some functions (for example, management, production, sales).

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Raiding in its current understanding on the territory of the CIS countries (primarily Russia and Ukraine) is often outright banditry and the forcible seizure of assets and centers corporate governance enterprise.

Perhaps now, after corruption, the second most important problem for business in our country is raiding. Unfortunately, both of these phenomena flourish in tandem and feed on each other. Of course, raiding is the enemy of Ukrainian business, scares off foreign investors, and completely destroys the possible investment attractiveness of Ukraine.

The basis of raiding in countries with developed market economies is to make money on the difference in the value of shares and property of the acquired company, which, after the capture, is sold in parts. The property complex, as a rule, costs more than the capitalization of the company.

In Russia and Ukraine, raiding is mainly of a criminal nature and consists in taking assets from effective owners.

Of course, there have been more requests to us with a request to protect us from raiders recently. The mission of a lawyer is not only to protect business from illegal takeovers in specific situations, but also to lobby for the adoption of the necessary anti-raider laws, to show active citizenship, to make every effort to strengthen our legal system and create favorable conditions for business and competition.

Why do you need an anti-raider audit

Since state protection and control over the strict enforcement of laws and the effective work of the law enforcement system have to wait a long time, the companies themselves must take care of their security. Preventive measures are very important, since in the case of raider attacks, time and preparedness are of paramount importance.

Protecting the interests of our clients, we practice due diligence, the purpose of which is to identify weaknesses and risks of hostile takeovers in the structure of the company and develop security measures. A kind of anti-raider protection. At the same time, it is very important to know and take into account the specifics of the client's business industry.

If the unlawful seizure of the company has already begun, then the defense includes a set of measures that take into account the specific circumstances of the case, the features of business processes, the management structure, and so on. This may be the initiation and support of litigation, legal protection of both the company itself and its officials.

Competent and professional protection of the owners and management of the company in criminal proceedings is very important. Given the constant changes in legislation and the emergence of new "creative" methods of invaders, anti-raider measures cannot be the same for all cases.

What protection against raiding looks like in practice

For example, during a raider attack, we defended the interests of a large international company- producer of agricultural products. The objects of the seizure were intellectual property and shares of the company. The victory over the raiders was won with the help of comprehensive measures, including by advising and legal representation in economic, administrative and general courts in disputes regarding ownership of shares and objects intellectual property, invalidation of decisions of the general meeting of shareholders and others. The achieved results completely satisfied our client.

Also, we represented and accompanied a major domestic industrial enterprise in a case for the protection of a trademark registered under the Madrid Agreement Concerning the International Registration of Trademarks of April 14, 1891.

The raiders tried to appropriate the rights to the trademark in order to take over the domestic enterprise. During one of the raider attacks, the invaders filed claims for a ban on the use of the trademark and for early international registration of the trademark in Ukraine. As a result of the conflict, the trademark was officially recognized and today is widely known in Ukraine. The right to use the trademark has been recognized for our client.

Another case of protecting the interests of a large sunflower oil producer in the fight against a raider attack on an enterprise. The servicing bank of the client reported that the funds that were on the client's accounts were seized, and that along with the decision to seize the funds, a payment request was received to recover several million hryvnias. At the same time, the client did not receive a copy of the decision to seize the funds, nor the decision to open enforcement proceedings, and therefore was deprived of the rights granted to the participants in enforcement proceedings - to direct their thoughts (denial, provide evidence confirming them) on about the legitimacy of the plaintiff's claims. Lawyers of "Arzinger2" have developed an effective strategy for protecting the enterprise from illegal encroachment on the funds in the accounts of the latter.

In our practice, there have also been cases of raiding through fraud and abuse committed by hired management and authorized representatives of the company. We defended a large Austrian holding that specializes in investments in the real estate market in Western, Central and Eastern Europe. His activities in Ukraine included the implementation of a large project for the construction of several logistics complexes on large plots of land in the Kyiv region. The amount of investments amounted to more than 40 million euros.

The raiders, abusing the powers granted by the foreign investor, tried to seize the holding's assets in Ukraine and turn more than fifty hectares of land into their favor.

Another well-known Austrian holding investing in real estate suffered from the actions of hired management through abuse of assets and the sale of the same assets several times. In both cases, there were no difficult negotiations, no difficult lawsuits, no criminal cases.

In such situations, it is especially difficult to protect the affected companies, because the raiders are highly educated lawyers and economists, they act very cleverly and carefully, deceiving foreign investors who trust them. And, of course, the image of our state suffers.

How Raiders Operate

"White" raiding

It is carried out without violations of the law and force. In our country, it usually boils down to corporate blackmail, when a minority stake interferes with the normal operation of the company in the hope that its management or owners will buy this stake at an inflated price and thus get rid of the blackmailer. .

Raiders often create a corporate conflict and then benefit from it. This type of raiding is usually used to make money quickly and easily, and not to take over a business.

Sometimes "white" raiders use the existing gaps in the legislation, organize the purchase of shares or debts of the company, try to temporarily worsen its economic and financial condition, reduce the price of its shares, influence bankruptcy and reorganization procedures.

Perhaps "white" raiding is beneficial for the development of competition in the market by removing inefficient management from management, improving management and business processes, and stimulating the company to increase its own competitiveness.

"Gray" raiding

It includes more aggressive and sometimes even forceful actions, covered by decisions of the courts, state and law enforcement, and may have the goal of completely taking over the victim company. Legal registration raider actions can be so high quality that it creates the appearance of the absence of violations of the law.

The most dangerous companies specializing in the seizure of enterprises are among the "gray" raiders. They have serious legal and economic services, and are often referred to as investment companies. Professional "gray" raiders have appeared in Ukraine since the late 1990s - early 2000s.

"Black" raiding

It has especially spread recently with the advent of a new government and the redistribution of business. It is carried out with obvious violations of the criminal law and outright cynicism. In most cases, the owners of victim companies are first offered to sell the business (no matter at what price, the main thing is the fact of the offer), and only then, in case of refusal, actions begin to take over the company.

"Black" raiding is an illegal taking of property lying outside the legal field. The methods used in this case are always illegal and often involve physical violence. This can be bribery, blackmail, extortion, banditry, forceful entry into the enterprise, forgery of the register of shareholders, etc.

Raiding and law enforcement

Often, law enforcement agencies cover up raiding, and do not fight against it. This is due to a sharp decrease in the professional level and the lack of sufficient knowledge among law enforcement officials to properly qualify what is happening.

The situation is also influenced by the imperfection of the criminal and criminal procedural legislation, "interest" or inertial behavior on the principle of "no interference". In Ukraine, there are no effective institutions of state power and protection of property rights. In our country there are no special laws against raiding, legislative mechanisms for protection against it and any punishment for such activities. It happens that law enforcement officers would be happy to help, but they don’t know how or they can’t.

The paradox of the situation is that sometimes the victim companies themselves are far from "angels" - they do not conduct their business according to the rules, as a result of which they are afraid to contact law enforcement agencies.

Raiders often use law enforcement agencies for their own purposes. The most widely used and, unfortunately, effective way is to initiate criminal cases and prosecute the officials and owners of the victim company. Predominantly, articles are chosen whose sanctions make it possible to detain "necessary" individuals, which greatly facilitates blackmail and the selection of business. All this is facilitated by an outdated criminal procedure code and an imperfect criminal code.

In addition, all kinds of checks are sent to the victim company, including tax, searches, seizures, etc., in order to identify any violations of the law in the company’s activities, block it economic activity and find something to imprison officials for.

Who is behind this?

It is said that if a hostile takeover cannot take place under any circumstances, it is carried out through High Politics. One famous anecdote comes to mind here.

"Putin invites Roman Abramovich to his Kremlin and says:

Roman Arkadyevich, for your great contribution to the Russian economy, I have decided to award you a cash prize. I'll write a check for the amount you tell me.

150 million $$

200 million $$

I think that $250 million, Putin says, will be quite enough, and after writing out a check, he puts Abramovich in the breast pocket of his jacket.

Thank you, Vladimir Vladimirovich, for the high appreciation of my work, says Abramovich.

Please, - says Putin, takes Abramovich under the elbow. - Roman Arkadyevich, and the rest SHOULD BE GIVED!!!"

The authorities announced the start of an anti-raider campaign

Raiding is promoted, first of all, by corruption. Ukrainian raiding is mainly a corrupt redistribution of property, and not a process of economic optimization. In Ukraine, raiders are now called millionaires, who are credited with friendly ties with top officials of the state. As long as our business is inseparable from politics, raiding will flourish.

Also, raiding is helped by the imperfection of the judiciary and the corruption of the executive authorities. Often, raider actions are supported by court orders and decisions, which are implemented with the help of executive service bodies and support from law enforcement agencies. Raiders exercise pressure on shareholders, officials of the victim company in order to force the sale of their property at a clearly unprofitable cost. To do this, individuals are prosecuted, obstacles are created for the victim company in the implementation of its economic activities.

In addition, the development of raiding contributes to the weakness of the legal system. Most European countries have adopted special laws against raiding. In our legislation, even the concept of "raiding" is absent. Accordingly, it is impossible to bring anyone to justice for the illegal seizure of property, because this act does not qualify as an independent type of crime. We hope that the situation will change, since the deputies and businessmen are actively discussing this problem, and sooner or later the relevant bills will be developed and adopted.

According to law.com

In the heart of, perhaps, every businessman, the word "raider" causes at least an unpleasant feeling of anxiety, and sometimes fear. This is understandable, because quite recently any legal business could become a target for raiders. The concept itself came to us from of English language, where "raid" means raid or robbery. Indeed, the forcible seizure of a business can most accurately be compared with a robbery.

Today, the issues of protecting business from a possible attack by "hijackers" are still relevant. In the arsenal of lawyers appeared quite effective tools and methods to counter raiding. Of course, as in any serious defense, it is impossible to single out any one most effective method, only all of them together can give a result.

Business structuring

As the saying goes, don't put all your eggs in one basket. Many entrepreneurs resort to the business diversification model based on this proverb, thus obtaining a reduction in risks by spreading them among different areas of the company's activities.

Less often, the owner of the company thinks about the fact that the risk of losing the business can also be reduced by dividing it into several business entities in order to give them certain functions. For example, one company of the group may own real estate, another - fixed assets (equipment, vehicles, etc.), the third - directly conduct the main activities, the fourth - to carry out the functions of human resources management. Depending on the type of business, this list may be changed and supplemented.

Companies that own the most valuable assets become more closed and inaccessible to external intrusion. They are created in the form of LLC or CJSC, sometimes property (rights) is transferred to individual– an individual entrepreneur, usually affiliated with the ultimate beneficiary of the business.
Lease agreements are concluded between companies, as well as agreements for the provision of certain services, on the basis of which they act as one well-coordinated mechanism.

Thus, the capture of one of the firms will not lead to the loss of the business as a whole. In addition, the contracts mentioned above can be terminated, which nullifies the value of owning one of the target company's subsidiaries.

Such a strategy also allows many to optimize tax costs. By dividing a business into several companies, its owner can expect to reduce the tax burden through the use of various taxation systems. In addition, internal transactions of a group of companies can be charged to expenses, which in certain cases also positively affects the amount of taxes paid.

Protection of shares (stakes in authorized capital)

One of the methods of hostile takeover is the illegal acquisition of shares or shares in the authorized capital of the company.

If the target company operates in the form of a joint-stock company, then the most obvious means of combating such attacks seems to be tightening control over the register of shareholders. Depending on the size and nature of the business itself, as well as the type of threat, this control can also be carried out in more than one way.

Large companies, as well as companies planning to receive investments from outside, will most likely prefer to transfer the register of shareholders to a large registrar that values ​​​​its reputation, work with which is maximally formalized.

Smaller companies will tend to concentrate control over the registry in their own hands, maintaining it themselves.

However, neither remedy can be a panacea for a possible stock grab. In the first case, false documents may be presented to the registrar, and in the case of maintaining the register directly by the company, the employee responsible for the correctness of the related procedures may be subjected to some illegal influence in order to transfer shares to the raider.

In such situations, encumbrance of shares with obligations in favor of third parties can serve as a good remedy. The simplest solution is to pledge shares under a loan obligation.

This method is also applicable to shares in the authorized capital of a limited liability company. After relatively recent changes in the law, it became possible to register a pledge of shares in the Unified State Register of Legal Entities. If there is such an entry, it will be impossible to make changes to the Unified State Register of Legal Entities regarding information about the company's shares.

A pledge can secure the obligations of both the shareholders (participants) of the company and the company itself. Most important question– in the proper execution of all obligations and encumbrances.

Asset protection

Most often, the purpose of the raiders is not the company as such, but the property that belongs to it. In this regard, it is necessary as a priority to protect the property of the company.

An effective mechanism is the creation of such conditions under which property cannot be alienated. Here, as in the case of the protection of shares, the encumbrance of property with the rights of third parties is applicable. Pledge, mortgage, under which additional financing can be obtained, also provides the owner with a chance to secure his assets.

However, we should not forget about the risks associated with collateral. A debt, for example, to a bank, secured by a pledge, is not always controlled by the debtor. If the company has problems with liquidity, there may be a delay, which the "raiders" will not disdain to take advantage of. Having redeemed the debt from the bank, they will be able to take possession of the property on completely legal grounds, while at a price significantly below the market. In addition, the acquisition of a default obligation from a bank can lead to the initiation of bankruptcy proceedings by the raider, often accompanied by the removal of management and the withdrawal of assets. In this regard, it is recommended, in order to protect the business, to encumber assets with a pledge in favor of controlled persons and organizations.

In addition to the "immobilization" of assets, the scheme of structuring companies mentioned above is used.

In addition, such a method of protecting property as the internationalization of business has proven itself well in this area. Of course, after the speeches of the first persons of the state about the semi-criminal nature of offshore schemes, many will think twice before transferring property to foreign firms. However, our mental warehouse is still very close to the saying "you put it farther away - you take it closer". When the company that owns the main facilities is registered abroad and is subject to foreign law, the raider will have to make completely different efforts to seize it than when all the information and documents of the company are "lying" in the tax office within five minutes of reach.

Protection of normal operation

After the rapid flourishing of the raider movement in our country and the introduction of legislative restrictions, including in the field of criminal law, hostile takeovers began to be carried out by other methods.

Today, in order to paralyze the activities of the target company, deprive it of the strength and time to resist, and ultimately force it to yield to the invaders, the so-called gray raiding or "greenmail" is used.

Greenmail (English green mail) is derived from the English greenback and blackmail, the first word means a dollar bill, and the second - blackmail. Thus, in relation to the field of mergers and acquisitions, this term means corporate blackmail in order to obtain money. Gray raiding as such is not aimed at absorbing businesses. First of all, it aims to capitalize on the undervaluation of the company.

In a certain situation, a greenmailer can buy a small stake in the “victim” for relatively modest money (to prevent this, LLCs and CJSCs may introduce a statutory ban on the sale of shares and shares to third parties). At the same time, the equivalent of these shares in the company's property may be several times higher than the cost of acquiring securities.

Then the blackmailer resorts to legal, but debilitating for the company of which he has become a shareholder, measures aimed at hindering the current activities of the company. In particular, endless lawsuits can be filed to challenge the decisions of corporate governance bodies, requests can be filed to convene general meetings of shareholders, the board of directors, conduct an audit, audit, organize strikes by personnel, etc. It should be noted that the legally justified actions of the gray raider should not be subject to legal protection due to the abuse of the right. Chicana, as such abuse is otherwise called, is under a statutory ban, and in the case of litigation, among other arguments, reference to this restriction must be used.

In addition to diverting resources to support communication with such a shareholder, the company incurs reputational costs that can affect capitalization and investment attractiveness.

Ultimately, the blackmailer may receive the required compensation for stopping his actions in the form of a payment for his block of shares. The price of these shares will be significantly higher than what the greenmailer paid for them. Moreover, it will seriously exceed the market one. In the USA, where greenmail was born and developed into an independent branch of the financial business, such payoffs are called the "farewell kiss", obviously with a very bitter aftertaste.

All the above methods of business protection are applicable in this case. The spin-off of an asset custodian company that has the most closed structure can prevent the blackmailer from carrying out his plan. As well as the internationalization of the main companies of the group.

At the same time, it is necessary to understand that the main tool of a greenmail adherent is the use of legal illiteracy of the target company's management bodies. Incorrect registration of transactions, corporate decisions, non-observance of the procedure for convening and holding meetings of the company's management bodies leads to the possibility of their appeal in court.

In this case, the most reliable means is scrupulous adherence to the law in every action of the company's management. In the event of a threat of a hostile takeover, the company must increase its vigilance in the preparation of each, even the most insignificant document, not to mention powers of attorney, commodity, cash documents, contracts.

In addition, both greenmailers and raiders use all available methods of pressure on businesses, including through regulatory and licensing authorities. The risk associated with an unexpected check of a particular service dictates the need to legalize all business processes, from commercial activities to labor relations with employees. Total adherence to the law is vital in the light of the fact that law enforcement agencies can also become a tool in the hands of a raider (often unwittingly).

Concerning labor relations, here it should be noted that a very effective mechanism for preventing a raider seizure (or leveling its results) is to provide management with guarantees in case early termination powers. When shareholders change, they will necessarily first change the director, his deputies and the board of directors. Contracts with these individuals may provide for compensation in the event of early termination. Sometimes the size of such a "golden parachute" may exceed the gain from the takeover of the company or even affect the number of shares that will remain in the ownership of the buyer after the termination of the contract with the director (if the "golden parachute" includes the exercise of a certain option).

The best defense is an attack

This formula is applicable in any struggle, including the struggle for survival in business, but is subject to slight adjustments. An attack is possible and reasonable only if the rear is reliably protected, as discussed above. Knowing your enemy is already half the battle.

Victim awareness of who is the subject of the attack will help to understand the possible ways of developing the situation and plan further responses.

Depending on the depth of the problem and the current situation, the besieged company must choose one or another instrument of both passive and active defense.

Passive protection methods are described above. Active, offensive actions include "mirror" measures against the invader. You can organize endless inspections of government agencies and services, initiate litigation. As a rule, the raider counts on a quick payback of the "project". Therefore, it is extremely unprofitable for him to delay the process, as well as the situation in which he himself is under attack.

The criminalization (prosecution by law) of raiding in all its manifestations causes concern among the invaders. Therefore, statements to the police, to the prosecutor's office, to the Investigative Committee, and sometimes to the FSB can become effective means of defense against capture.

1. Build a clear management scheme that takes into account all the features of the business and the agreements of the owners. Periodically spend due diligence corporate documentation (charter, regulations on general meeting shareholders, on the board of directors, regulations on branches, representative offices) and major transactions that go beyond the scope of normal activities. Fix any bugs you find as soon as possible.

The basis of protection is carefully designed internal documents: the charter, regulations on governing bodies, corporate agreements. It is their shortcomings - contrary to the law, excessive procedures, lack of proper regulation of corporate aspects - that make it easier for raiders to seize assets.

To minimize the risk, clearly state in the charter of the organization:

Appointment, preparation and holding of meetings of shareholders (participants);

Decision-making procedure;

The procedure for appointing and changing the CEO;

Powers of governing bodies;

The procedure for conducting major transactions, transactions with interest, as well as transactions in which conflicts of interest arise.

For example, the unlimited powers of the director of a transport company to make transactions led to the purchase by raiders of a controlling stake and castling in its management. The invaders appointed their director, who, having complete freedom of action, resold the main assets to controlled firms.

2. Track debt obligations. Overdue and poorly managed debt is a great excuse for a raider attack. Debts should not be in the same hands. This will make it difficult to continue doing business (possibly bringing the company to bankruptcy) and will entail the sale of assets.

For example, two entrepreneurs in equal shares owned a warehouse for storing goods. One companion controlled him, the second did not mind, because he trusted him. The managing entrepreneur, allegedly with the consent of the second, hired a construction company to repair the warehouse and single-handedly paid off the contractor. Then, in court, he recognized his ownership of the partner's share as compensation for the alleged repair costs incurred by him. This would not have happened if the deceived co-owner had been actively involved in the operation of the warehouse.

3. Do not forget that the rights to real estate must be registered in the prescribed manner. That is, in the real estate register, the owner must have a record of ownership of the object. When there are no rights, property is considered suspended in the air. And after some time, after several resales, the object may end up with persons controlled by the aggressors.

4. Maintain a positive relationship between employees and the manager. Often, information leakage in order to harm the enterprise comes from employees who have a conflict with the employer. Also conduct a security check on each new person. Especially those who have access to meaningful information.

Example: top managers of a furniture company, before moving to another company, renegotiated contracts for new organization. Along the way, they took away the entire client base and documentation, and left their people in the old company, who provided top managers necessary information. As a result, the activity of the former company was blocked.

Take care of security information security in the field of data protection from hacker attacks, and from the leakage of information about the company. Use the services of specialists and instruct employees.

5. Fight the invaders with PR and build relationships with the business media in advance. The more actively the capture of a particular company (or its possibility) is discussed in the funds mass media, the less desire the invaders have to continue it.

No company is immune from raiders, especially if it has attractive assets. Therefore, contact specialists in a timely manner to develop the most effective defense strategy and take measures to repel an attack. Otherwise, you risk losing all the results of many years of work to develop your business in one moment.

The raider seizure of an enterprise or property belonging to it still remains a real problem for modern Russian business. The capture can be initiated both by an internal participant in the company, for example, one of the founders, and by third-party companies - competitors or professional raiders.

Those involved in the seizure of property, as a rule, act within the framework of the law, i.e. they are well aware of the current Russian legislation, therefore, without a staff of experienced lawyers, it is very difficult to resist raiding. The ALAR Law Office employs experienced specialists who have practical knowledge in solving problems related to the protection of a business that has faced a hostile takeover.

What is raiding?

The term “raiding” came to Russian from English, and in direct translation it means “raid” or “raid”, but in more detail it can be deciphered as an unfriendly seizure of an enterprise. A distinctive and main feature of raiding is that the seizure takes place against the will of the head and owners of the enterprise, while the management, as a rule, is subjected to economic, forceful and other types of pressure.

The methods of raider capture in each country are different, and in Russia they also have their own distinctive features. In our country, raiders most often act using methods of forceful pressure - for example, it can be a physical seizure of an existing object, which, after taking possession, is held with the help of security structures. As for law enforcement agencies, most often they prefer not to interfere in such proceedings. Returning a captured enterprise after a raider seizure is real, but rather difficult, so it is best for company leaders to act with the help of experienced professionals who know the law well.

Motives for raiding can vary, but the most common goals for a raid are:

• eliminate a competitor;
• capture the market share occupied by the enterprise in order to make a profit;
• take possession of real estate, land or other property of the company (this can be done both for the purpose of subsequent sale, and for reorienting the direction of the organization's activities).

How to deal with raiding

Today, the takeover of a company rarely occurs only on physical level- usually behind this is the work of competent specialists, whose goal is to seize the assets of the enterprise, lead it to bankruptcy or otherwise disrupt its work. Therefore, the methods developed to combat raiding should be implemented in several areas at once:

• maintaining the ability of management to control the activities of the enterprise;
• maintaining the current direction of the company;
• preservation of the company's assets;
• preventing the bankruptcy of the company.

Our company helps to resist hostile takeovers at all stages, from the first signs of a threat to any stage of the legal process. It is especially necessary to act actively at the stage of the trial, because if it ends unsuccessfully, the company may lose not only its property, but also the right to manage the business.

Our company offers representation and protection, as well as negotiating on behalf of the owner of the company. We work both in the development of an offensive strategy and in litigation: we initiate proceedings, which are brought to court and supported until a decision is made against the raiding company.

Countermeasures

Most entrepreneurs ignore the possibility of a raider takeover, despite the fact that such a situation is quite real for an LLC. As a rule, appeals to companies counteracting raider attacks occur after the onset of attacks, when the threat of loss of enterprise management becomes more than real. You can get out of the situation with much less losses if you think over your actions in advance in the event of a raider threat.

Let's consider a number of the most effective preventive measures that can be implemented in the operation of an enterprise in order to reduce the risk of its capture. Although the development of a plan of preventive measures is an individual work, which is based on the economic, legal and social characteristics of each enterprise, it is possible to identify common features that help to minimize the threat of raider capture in general:

• changing the structure of the company to a more secure one;
• curtailing the powers of the company's management and other actions aimed at eliminating interest in taking over the company;
• introduction of a monitoring system for credit debt;
• increasing the block of shares and protecting securities from buying and manipulation;
• protection of constituent documents;
• the introduction of measures that minimize the possible profit of the invader after the raider attack.