Electronic trading with assets of bankrupts enhance reduction of shadow market in Ukraine, say experts

Kyiv, June 12 (Interfax-Ukraine) – The introduction of the electronic trading system for assets of bankrupt companies foreseen in the new law on bankruptcy creates the preconditions for selling the property of debtors at realistic prices, as well as preconditions for the transparent work of arbitration managers.

This opinion was presented by players on the market of the sale of property of bankrupt companies at a press conference at Interfax-Ukraine on Tuesday.

"The law system has certain factors which are to force [arbitration managers to work in a transparent way], and we hope… that when not only this law, but by-laws and adjacent laws start working, then this will force movement in this direction," said Head of the Tytych & Partners attorneys corporation (Kyiv) Vitaliy Tytych.

He said that today only 10% of arbitration mangers and players of the market on the sale of property of bankrupt companies in Ukraine operate in a transparent way and set a realistic price for the property sold, while around 90% of the market is in the shadows.

In turn, the director of the Commercial Law Center (Kyiv), Valentyna Danishevska, said that the requirement on the increase of fees for the services provided by arbitration managers could bring them out the shadows.

The director of the Kyiv branch and head of the central regional department of Electronic Trading in Ukraine (ETU, Odesa), Iryna Serbin, said that the introduction of the electronic trading system will also help accelerating the procedure for selling property of debtors as a whole.

"We believe that with the help of electronic trading we'll bring Ukraine to a more adequate international level and will be in the mainstream," she said.

Serbin said that since January 19, 2013, 83 announcements on the sale of property of bankrupt companies with an appraised value of around UAH 1.5 billion have been posted on the Web site of the Justice Ministry of Ukraine, 29 of which or almost 35% are announcements by the ETU (the sum of the applications published is UAH 102.5 million or slightly over 6% of the market).

A total of 28 applications on the holding of electronic trading were posted on the Justice Ministry's Web site, including 27 applications submitted by the ETU, which processed 65 applications worth UAH 186.9 million since January 19, 2013. The leaders in the number of applications submitted are Cherkasy (UAH 73.4 million), Odesa (UAH 34 million), Kyiv (UAH 27 million), Khmelnytsky (UAH 13.7 million) and Sumy regions (UAH 10.3 million), Serbin said.

As reported, the amended law on the restoration of solvency of debtors or declaring them bankrupt has been in effect since January 19, 2013.