Indirect Corporate Ownership and Acquiring Controlling Stake Ownership in Public Companies

This graduate paper is aimed at producing an effective rule, which will ensure the protection of minority shareholders' rights upon the change in controlling stake ownership in public company. There are four main objectives of the paper (a). To determine the general means of protecting the rights of minority shareholders in the U.S., the UK, European Union and Russia. To analyse the mandatory tender offer procedure upon the change of indirect ownership. To consider and to compare the criteria of qualifying the relations between parties as concert To resolve the main issues arising in arbitrazh disputes. Based on this research the following conclusions were made: first, the main difference between the mandatory tender offer procedures in the UK, European Union and Russia are the criteria for qualifying the relations between parties as concert. Russian takeover law provides the highly criticised conception of affiliated parties. At the same time, English and European jurisdictions both apply the idea of acting in concert. Second, we believe that Chapter XI.1 of Russian Law on Joint-Stock Companies should rescind the conception of affiliated parties and substitute it with the notion of controlling and controlled parties proposed in Bill №1036047-6. Third, at the same time it is necessary to create conditions for the subsequent introduction of the acting in concert conception. However, this cannot be done until the mechanism for qualifying the concert parties is formulated.