The Court of Appeal of Lithuania satisfied the claim of the prosecutor of the Klaipėda Regional Prosecutor's Office in a civil case regarding the shares of AB Klaipėdos nafta granted to employees
Freitag, 02.12.2022 12:01 von GlobeNewswire
AB “Klaipėdos nafta” (hereinafter – the Company) informs that the Court of Appeal of Lithuania issued a decision in a civil case No. e2A-803-912/2022 which annulled a decision of 8 April 2022 of Šiauliai Regional Court and adopted a new decision, i. e. satisfied the claim of the Klaipėda Regional Prosecutor's Office defending the public interest:
- annulled the shares granting rules approved by the minutes of the extraordinary general meeting of shareholders of the Company of 8 November 2018;
- annulled the respective decisions of the minutes of the Board of the Company of 9 October 2018 that approved the program of granting shares to employees in accordance with the set rules;
- annulled the share granting agreements of 26 April 2019 from the moment of their conclusion.
It should be noted that the Court of Appeal of Lithuania by its decision made conclusions inter alia that:
- by paying part of the bonuses to employees not in cash but in the form of shares, the Company violated the relevant provisions of the Law on Companies;
- by granting shares to employees, the Company did not transfer the state property;
- no harm is made to the Company and its shareholders;
- employees who received bonuses in the form of shares cannot be considered unfair;
- shares granted as bonuses to employees in accordance with employment contracts concluded with them are considered as remunerative transactions;
- restitution is not applicable, as its application would not meet the proportionality criterion.
In the Company's opinion, although the Lithuanian Court of Appeal satisfied the claim, the court's decision basically supported the position expressed by the Company regarding the absence of harm and the fact that employees were not given the shares of the state but instead purchased by the Company from private individuals, whereas the demands of the prosecutor's office regarding the application of restitution and compensation of damages were not satisfied. It should be noted that the outcome of the case does not cause significant financial consequences for the Company and its employees, since restitution is not applicable and there is no need for the employees to return shares or compensate for damages. The Company will continue to assess whether to appeal this decision in the cassation instance.
Chief Administrative and Corporate Governance Officer Rytis Valūnas, +370-655-66421