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Seventh Continent minority squeeze-out

Jan, 2012 to Nov, 2012
The majority shareholder of 7th Continent, one of Russia’s largest consumer retail chains in Russia, Pakwa Investments Ltd., is squeezing out minorities at a price considered to be half the market value of the shares, in clear violation of Russian law.

The IPA filed a lawsuit against 7th Continent on behalf of minority shareholders.

The FSFR (the Federal Service for Financial Markets) supported the minority shareholders’ claims and ordered 7th Continent not to proceed with the mandatory buyout. In violation of the FSFR’s order, 7th Continent did proceed with the buyout, in the process switching its registrar, acquiring minorities’ shares by force, then switching registrars again. 

For this violation, 7th Continent was fined 7.5mln rubles ($240,000), the largest fine levied upon any Russian company in 2012. 

The proceedings are ongoing, as is the IPA's lawsuit. 

The IPA wrote a detailed story on the loophole the shareholders of Seventh Continent are exploiting for ICGN

Project-related news:
Kommersant, Aug. 1, 2012: 7th Continent has “multiplied” its chartered capital through violations (in Russian)
FoodMonitor.ru, Oct 4, 2012: 7th Continent fined for 7.5 mln rubles; IPA comments (in Russian)
RBK, 22 Oct, 2012: Moscow court of appeals to review the IPA's case against 7th Continent (in Russian) 
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