Shares, shareholders, dividend...

Croatian
shareholdings!

Protection of minority sharelholders in Republic of Croatia is very poor comparing to other western countries. On market you can buy shares of companyes that did not make any profit for more then 10 years. Just eating own capital. There were no responsibilty for presidents, management and directory boards, there were no political consequences and no moral implications!

Not reaching optimum in business , shareholding companies affect state in country in general. In Croatia privatization process iss defined as crimnal process but there were no consequences for it. Politicians ,even president say, "It was robbery , but all was according to the LAW!" We were withnessess tat even politics was supporting such illegal activities! We saw trickd minorit shareholders without any legal actions taken against "Masters of privatization".
Political leaders all the time reapeat:"All was legal!" But results shows different!

Here are presented materials available for reading that shows problems minority shareholders face in Croatia. Some problems are samples from the Croatian courts. There were not cases finished yet so we cover only cases that we can publish. We do not comment judg decisions at all due to the time of process is in progres.

We willuse our power of public talk to try to influence responsible people to change what is inproper in the Law and suggest corective machinery to bring this system to start function acording standards required to reach stabilty and security for all investors (not only partially involved interest groups, mainlly very close to the politicians that create the LAW in Croatia.. ,

We have one case which is very indicative and show majority of problems that one foreign investor reach in trying to find justice at the Croatian courts.

Materials are supplied thanks to Mr. Prodanov who is wery well aware of situation re. Minority Shareholding Protection in Croatia.

HEre are originally written documents send to some shareholding companies. Violation of shareholding rights isnot obovious so all documents explain in details the problems minority shareholder faces in Croatia.

There are unanswered questions (allso solving at the Croatian courts) realted to shareholding compaines : Arenturist, newlly formed comapyny Maistra formed by joing the company Jadran-turist rovinj and comapany Anita Vrsar. Company Maistra is in confilct with small shareholder due to posible wrong setup of share value for each compayn before joing it together. What is the right value, final words will come from the court when case is finished (and is not on July 20, 2006, as far s we know).

On these pages will be found also documents showing criminal activities during privatization proccess in Croatia, ralted to political structures, and the documetns are in process of aprovall to be published free. Some documents will show moral and economic non justification so as such they do not have any legal consequences except the moral ones! Also soem documets will only show only thoughts of one or more person ans aas such they do not have any value except the subjective expression!

Dokuments ...

Maistra dokuments

Shown documents with decription of Maistra case!

No.	Document name	Description of document
1.	Maistra vs. Prodanov	Minority shareholder analyses in Croatian language
2.	Otheri	Other materials

For more informationa about these documents pleae contact via E-mail!

About minority shareholders protection in general

These is very sensitive issue and very complicated even in society with long shareholding tradition so process itself is very long, complex and painfull.

It is to be expected that minority shareholder could not influence the majority shareholder in decision making process, but on same time Majority shareholder should not have any personal interest in the company or have more income then other shareholders in the company. This include: paying extra fees, unproper manager payments etc.

BAsic question: how much to pay manger who for more for 10 years did not make profit in the company or eat company capital.

Very good sample of legal destruction is formin of doughter companies with majority shares owned by managers.
Very often transfer of money was lager to these realted comapnies than own profit of the company. As minority shareholdersa are very often affected with lower sums of money due to their small amount of shares, there is not any protectionto prevent such cases!

Other samples of illegal activities without legal implications could be :

Fired directors or managers
Discrimination of minority shareholders
Dividends non paid
Extensive cash sucking from the shareholding compayn
Unadequate manager fees
Shares manipualtion
Giving "core business" to other comany (most of the time dougther company
Lost "business opportunities"

Any particular action in the direction of protection own rights for minority sharholders can be with enormous costs as analitical and deep work should be to ind out all transaction history of the company. As well as managemetn and board is involved in helping court to find out all needed materials.

There si one efective way to find if the Law is broken! Whistlers!

We do have cases that mangement and board is on the court using company money to defend themselfs at the courts. Such model leaves space for manipulations and does not protect minority shareholders as they do not have power to protect their small capital invested. We show you samples from real life.

It is interested to see court expenses for minority shareholders as the investor who has invested around 15.000 USD ! Expenses to go to the court reach this values multiple times. These is even case that you see obvious company destruction.

How to protect small investors? This is unanswered question in Croatia.

We can expect that people are joined in NGO , but from the state there is no way that support orginized PROTECTION on state level. Maybe the reason is that situation is Croatia is brought by illegal activites of some plotiacal structures and some hard evidence shows taht this is obvious.

To continue to be whitneses of malesting of minority shareholders in Croatia, maybe the solution is to take legal action on our courts in the USA and on that way force goverment to setup stronger and better standards on theses issues.

These pages will follow any activity related to this subject and accordinglly inform...

For more inforamtion about protection:

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About MINORITY SHAREHOLDERS

“A shareholder may apply to the court… for an order under this Part on the ground that the company’s affairs are being or have been conducted in a manner which is unfairly prejudicial to the interests of its shareholders generally or of some part of its shareholders…” [...]

For more information NASAA.

MINORITY SHAREHOLDERS

Those with a 50% shareholding or less.

“unfairly prejudicial”

In very general terms it means that minority shareholders have a right to complain to the court if the majority shareholders run the Company in a manner that damages their position and the worth of their shareholding, often done deliberately and often by misapplying or misusing Company assets.
Complaint cannot be trivial F.e. “they’re managing the business badly”.
Complaint must stand up to some objective analysis.
Example of “unfairly prejudicial” conduct might be using company assets or money for the personal benefit of a shareholder.

Next example could be if the majority shareholders paying themselves far more than people in their position could objectively justify.

Funding the fight

Majority shareholders who control the Company (and its finances) have a massive advantage in any fight with the other shareholders.
They can pay their legal fees using Company funds. Even with a great legal case, a minority shareholder has only limited funds and is no match for the funds at the disposal of the Company.

The courts will not allow Company money to fund what is essentially a personal battle.
The Company does not exist to serve the majority shareholders and spend its funds on their personal legal fees so the courts will be willing to prevent any attempt to use Company funds in the battle.