Kangaroos aren’t indigenous to Ukraine, but kangaroo courts seem to be another matter. On April 7, a Ukrainian court ruled against Swissport International in a shareholder lawsuit. The verdict meant that a minority shareholder in Swissport Ukraine won the right to pay just $400,000 for a business that Swissport valued between $25 million and $30 million.
The Loadstar, an excellent blog on global cargo and logistics, reported that Ukraine has “developed something of a reputation for ‘corporate raids’ in the past few years.”
As the country looks to integrate with Europe, government officials have initialed free trade and other business agreements with the EU. The EU, however, says much more needs to be done over “the fight against conflict of interest and corruption in the judiciary … ,” according to an EU memo reported by The Loadstar.
The case looked rigged from the start. Half of the case’s six scheduled court hearings were postponed – two of which saw the Ukrainian judge changed at the last minute. At issue was Ukraine International Airlines’ claim that Swissport International had attempted to dilute the carrier’s minority stake in the Ukraine company.
Swissport claimed that the dilution of UIA’s minority stake would be the result of capital invested into the Ukrainian operation to handle the double-digit growth in the country. According to Swissport, the matter wasn’t even finalized and was due to be discussed at the next shareholders’ meeting prior to the litigation.
In the end, the court decided that Swissport International was in breach of contract and had to hand over its 70 percent share to UIA for 1 percent of its value.
Swissport has no plans to appeal. While UIA gets a sweetheart deal, the 800 workers of the former Swissport Ukraine worry about their jobs. UIA’s latest public accounts show an operational loss of $17 million. Its accounts payable increased 5 percent to $50 million and debts to bankers leaped 53 percent to $38.75 million.
Swissport also announced the week after the verdict that it would re-enter the Ukrainian market.
