Prime Minister
Shmyhal D. A.
Minister for Development of Economy, Trade and Agriculture
Petrashko I. R.
Minister of Agrarian Policy and Food
Leshchenko R. M.
Dear Prime Minister Shmyhal,
We would like to express our respect, and to take this opportunity to thank you for your leadership during the COVID-19 pandemic.
Given your important role as the key person in Ukraine responsible for the investment climate, we ask that you turn your attention to the matter of the ongoing pressure and attempts by a raider to seize control of the company Ovostar Union. We believe this issue warrants your attention as Ovostar Union is partially owned by foreign investors. If the situation is not resolved in accordance with the rule of law, it will continue to negatively affect the ongoing efforts of your Government to increase Ukraine’s investment attractiveness.
Ovostar Union is a Ukrainian investment success story. Today, it is one of the leading Ukrainian producers and exporters of chicken eggs and egg products. Further, Ovostar Union successfully trades its products in more than 50 countries worldwide. Canada and Poland are proud to be part of this success story, since the company’s shareholders include such large international institutional investors as Canadian investment fund Fairfax Holdings, Polish Generali Group, and Aviva Poland.
The premise the raiders are using to try to steal Ovostar would be laughable if the implications were not so serious. Very briefly: «MakarOVO» CJSC was a poorly managed company that in 2013 was forced into bankruptcy. Left holding the debt from MakarOVO’s failure, MakarOVO’s bank, NADRA, was declared insolvent by the National Bank of Ukraine in February 2015. MakarOVO’s former assets were sold, and then resold. And in 2018, Ovostar purchased the distressed assets from BV Trading. Today, the raiders accuse Ovostar of having orchestrated the bankruptcy of MakarOVO. What makes this claim even more spurious is that MakarOVO’s former owners have offered to drop the lawsuit if Ovostar makes them a lump-sum cash payment.
It concerns us that the Office of the Prosecutor General allowed these conspiracy charges to proceed to court in the first place. By not rejecting the clearly made-up charges, the Government of Ukraine has forced Ovostar and its international investors to defend themselves against wild accusations in a judicial system where some judges are still willing to render verdicts on a fee-for-service basis. And so, by allowing the case to proceed, the Government of Ukraine has unwittingly supported the raiders’ attempts to steal Ovostar Union from its lawful owners. This clearly contradicts your Government’s publicly announced commitment to protect the rights and interests of foreign investors.
Over the last few years, Ukraine has taken important steps to improve the country’s investment attractiveness. However, situations like the one we describe here undermine the trust of international investors in Ukraine’s judiciary, and in Ukrainian state institutions as a whole.
We sincerely hope the hearing of Ovostar Union’s case concerning the protection of their legitimate property rights will be conducted in full compliance with the principles of impartiality, legality and objectivity. We also hope the judicial institutions entrusted with the protection of foreign investors’ rights in Ukraine will have the opportunity to adjudicate Ovostar’s case without any undue third-party pressure.
A swift and sustained end to the legal harassment of Ovostar Union will have a direct and positive influence on Ukraine’s investment climate. In this context, we write to you with a request to undertake all possible measures within the legislative framework and your competence to ensure the protection of the legitimate rights and interests of Ovostar Union.
Yours sincerely,
Ambassador of Canada Larisa Galadza
