Ukraine's Supreme Court has ruled in favor of the demand made by the Prosecutor General's Office that a controlling 68.01% stake in OJSC Zaporizhial aluminum plant, or ZALK, be returned to state ownership.
"The highest court has put an end to a years-long dispute about the repeal of the sale of a 68.01% stake in OJSC Zaporizhia aluminum plant estimated under an agreement of over UAH 380 million and its further return to state ownership," the Prosecutor General's Office said in a statement posted on its website on Thursday.
In February 2001 Ukraine's State Property Fund and JSC AvtoVAZ-Invest concluded the ZALK sale and purchase agreement the statement said. Under the agreement, the buyer was obliged to not only pay for the stake but to also repay the plant's debts, namely long-term debt liabilities to the State of Export-Import Bank of Ukraine, a.k.a. Ukreximbank, under a loan agreement worth over $75 million.
"At the same time, the buyers of the controlling stake in ZALK – JSC AvtoVAZ-Invest and Velbay Holdings Limited – were trying to shun the fulfillment of their investment obligations before the state, failing to repay ZAlK's debt under the abovementioned agreement," the prosecutors said.
The failure to meet the investment obligations formed the basis of the prosecutors' claim.
"The legitimacy of the demand by the prosecutors was confirmed by all courts of appeals. At the same time, the defendants, attempting to retain the controlling stake in OJSC ZALK, repeatedly appealed to the Supreme Court of Ukraine. Having considered the case on March 11, 2015, this court satisfied the prosecutor's demand and left the previous courts' rulings in force," the statement reads.
