The majority shareholders of “Gemeni” SA, who have managed the company since 2019, and a number of minority shareholders said that pressure is being exerted on the Supreme Court of Justice (SCJ) in a move to dispossess shareholders of the business they acquired legally. In an open letter, they ask the senior administration of Moldova and the resident ambassadors of the U.S. and the EU to monitor this case so as not to allow the illegality planned in relation to them to be committed.
In a news conference at IPN, Leonid Sidorov, the representative of the majority shareholders of “Gemeni” SA, said the minority shareholders, owning de facto 1.6% of the shares in “Gemeni” SA, aim to appropriate 72% of the business through the agency of their lawyer. They mislead public opinion about the essence of the case and resorted to manipulation because the SCJ is to pronounce on the revision application submitted by the Republic of Moldova through the governmental agent to the European Court of Human Rights (ECHR) on March 18, 2020.
“For those who don’t know the essence of the case, we will remind that in the 1990s, as a result of mass privatization in exchange for patrimonial bonds, the enterprise “Lumea Copiilor” turned into the joint stock company “Gemeni” with about 500 shareholders, most of whom were lessees and members of the staff. The multitude of shareholders led to intense struggles between different groups of shareholders during the first years of the switchover of the staff of “Gemeni” from collectivism to capitalism. This way, in 2002-2003, a minority group consisting of four persons and an offshore firm that concentrated about 40% of the shares in the joint stock company “Gemeni”, after failing to reach a consensus with most of the shareholders, took legal action in order to liquidate “Gemeni” SA and to take over the areas of the main shopping center of the country. Moreover, this group managed by court to liquidate the joint stock company “Gemeni” and to register an ownership title over a portion of 72% of the commercial areas of the shopping center with the cadastral office on September 12, 2003,” stated Leonid Sidorov.
According to him, another over 400 shareholders of the joint stock company didn’t register any own right over the liquidated company with the cadastral office at a time when their property decreased from 100% to 28% of all the commercial areas of the shopping center. Disagreeing with these unilateral actions of the mentioned minority group, in 2003-2007 the group of majority shareholders had struggled to keep the building and the company intact. In 2005-2007, the courts of law of all levels concluded that the liquidation of the joint stock company “Gemeni” was a judicial mistake and ordered to restore its registration by reincorporating all the areas into the company.
In 2006, the minority group that effectively held 33.22% of the share capital of “Gemeni” SA, complained to the ECHR, asking for damages from the state for being deprived of 72% of the commercial areas of the shopping center. In 2011, the ECHR ruled that the national authorities’ decision to quash the irrevocable court judgment based on which the minority group obtained the mentioned portion violated the rights of the minority group guaranteed by the European Convention on Human Rights. Under the Penal Procedure Code of the Republic of Moldova, the state and the minority group had six months at their disposal to seek the revision of the previous judicial solutions, but none of the parties used this right that expired in 2012.
In February 2020, 14 years after the minority group filed its application, the ECHR passed a decision concerning the damages that Moldova is to pay to the applicant. The Court held that if the restoration of the property is impossible, the Government must pay the market value of the property in the amount of €2.12 million to the minority group, €1.5 million of which represented the revenues that failed to be collected. Instead of clarifying the relations, as the ECHR decision stipulates, the state and the minority group try to solve the problems on account of the current majority shareholders that are bona fide purchasers. For this goal to be achieved, public opinion is being manipulated and public pressure is being exerted on the SCJ, concluded Leonid Sidorov.
