Dmitry Uryakin commented to the Russian Legal Information Agency on the draft law on the external management of companies with foreign participation
A draft law on the external management of companies that are at least 25% owned by investors from unfriendly countries has been submitted to the State Duma. At the same time, the document complies with internationally accepted legal norms and does not threaten foreign companies with losses. In particular, the draft law proposes to limit the external management ‘s ability to access official, commercial or bank secrets of the company and its counterparties, and also to deprive it of the right to participate in auctions for the sale of shares in the company it controls and to give it full responsibility for its actions.
In addition, one of the most important tasks of the draft law under discussion is to preserve both the functioning business itself and jobs in the companies that have been placed under external management. However, in the opinion of Dmitry Uryakin, Associate at Maxima Legal, the text of the draft law should be clarified in this respect.
“The idea declared by the legislator to preserve business and jobs in companies whose foreign beneficiaries have actually let the business run its course is unlikely to be realized by passing a law on external management. This can be explained by the fact that preserving business in the absence of clear logistics and numerous difficulties in procuring foreign raw materials, equipment and components will prove to be an impossible task. Therefore, external management is likely to be reduced to asset replacement and the creation of a new firm on the basis of the assets of a company with foreign participation. For these purposes, the draft law should provide for mechanisms to prevent ineffective restructuring, for example to establish personal liability of members of the external administration for any form of fault, not only for intent or gross negligence, as is done in Article 8 par 9 of the draft law. Otherwise external management may result in withdrawal of the most valuable assets of the company in favor of interested parties with subsequent bankruptcy”, Dmitriy explained to the Russian Legal Information Agency.
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