EXPERT. SOLIKAMSK MAGNESIUM PLANT MAY SOON BE FULLY TRANSFERRED TO THE STATE

Comments of Yelena Gladysheva, Advocate, Managing Partner of RI-Consulting, on the possible return of the Solikamsk Magnesium Plant to state ownership. The Perm region Prosecutor's Office has decided to reclaim shares of Solikamsk Magnesium Plant JSC (SMZ, Perm region) from minority shareholders through the courts, following the return to the state of the 89.5% of SMZ shares held by majority shareholders.

Earlier, prosecutors had spoken to SMZ employee stockholders and explained that they held securities illegally, because the plant had been privatized in violation of the law, without the approval of the Russian government. Thus, the prosecutor's office disputes the privatization of the plant in the 1990s. 

Elena Gladysheva in her publication to Expert Journal about the fact that in Russia so far the Prosecutor's Office has never taken away minority shares traded on the Moscow Stock Exchange. Is there any chance that this decision will be made this time? What are the dangers of it?  If their shares are taken away from the minority shareholders, how should they proceed? Should they sue the Moscow Stock Exchange or the former shareholder from whom the stock was bought? Will the number of nationalized companies grow in the country? What kind of threat does this pose to private property? Is there any way to protect it? How can we assess the attempts to revise the results of privatization today - are they justified within the framework of the current legislation?

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