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Fight for paints-maker turns nasty

A fight between two ownership groups for control of paints-maker Chemolak a.s. turned nasty when 167,432 Chemolak shares changed hands at the Bratislava Stock Exchange (BCPB) on October 22. The shares figure represents 33.38% of the company's share assets, which according to analysts significantly increases the influence in Chemolak of a group close to the former government of Premier Vladimír Mečiar.
According to the records of the Central Securities Registrar (SCP) from October 24, the new owner of a 28.52% stake of Chemolak is brokerage firm Penta Brokers, a.s.
An analyst at an investment bank, who declined to be named, said that the share transfer was the result of a struggle for ownership within Chemolak. "They [the Penta Group] just want to entrench, to change the Board of Directors and then increase the quorum for further changes to 80%," he said.


Happier days. Chemolak director Vojtech Valenta (left) receives award from environment hawk Ivan Janek.
TASR

A fight between two ownership groups for control of paints-maker Chemolak a.s. turned nasty when 167,432 Chemolak shares changed hands at the Bratislava Stock Exchange (BCPB) on October 22. The shares figure represents 33.38% of the company's share assets, which according to analysts significantly increases the influence in Chemolak of a group close to the former government of Premier Vladimír Mečiar.

According to the records of the Central Securities Registrar (SCP) from October 24, the new owner of a 28.52% stake of Chemolak is brokerage firm Penta Brokers, a.s.

An analyst at an investment bank, who declined to be named, said that the share transfer was the result of a struggle for ownership within Chemolak. "They [the Penta Group] just want to entrench, to change the Board of Directors and then increase the quorum for further changes to 80%," he said.

The loser in the battle for control is the Harvard Investors Group (Harvardska investična spoločnost), which prior to the stock shift had been the largest Chemolak shareholder with over 30%. The victor to date is Chemolak shareholder Istrofin, formerly known as VÚB Kupon and controlled by the Penta Group. Prior to the October 22 stock shift, Penta held 25% of Chemolak shares through VÚB Kupón.

Penta claimed that Harvard had acquired its share of Chemolak illegally, and on October 19 secured a court order to remove Harvard's voting rights in Chemolak. Harvard then cancelled a special shareholders meeting which was originally scheduled for October 20, arguing that the meeting had been summoned in contradiction with the Commercial Code. A change in the company's statutes, as well as dismissal and election of members of the Supervisory Board and the Board of Directors, had been on the agenda.

Istrofin then called another special shareholders meeting on October 20, which was held on the steps of one of Chemolak's buildings, Harvard having locked the doors to the normal meeting hall. At this meeting, the executive officers of Istrofin dismissed all members of the Chemolak Supervisory Board and Board of Directors, and ruled that an 80% quorum would henceforth be needed to secure major company changes.

Jaroslav Haščak, Chairman of the Supervisory Board of Istrofin, said that "our attempt was to make sure that the Harvard group would not be able to change the direction of the company's development to their benefit. So, we put our people onto Chemolak boards of control."

But Pavol Hollý, a member of the Chemolak Board of Directors and vice-president of Harvard, told the Pravda daily paper that Istrofin was a minority shareholder striving to put its people in control of Chemolak and then change the company's statutes to secure its position. The October 20 meeting had been held illegally, he maintained, because the Commercial Code required a 30 day period between the calling and holding of special shareholders's meetings.

Istrofin has since requested a special Chemolak shareholders meeting for October 30, whose agenda includes not only the dismissal and election of members of the Board of Directors and the Supervisory Board, but also approval of new wording of the company's statutes.

Chemolak, a.s., Smolenice, reported a gross profit of 105.4 million Sk ($2.91 million) nine months into 1998. Chemolak's total assets were 1.703 billion Sk ($47.2 million). Its long-term favorable results rank Chemolak among the bluechips of the Slovak stock market. Chemolak's product range includes paints (66.4%), varnishes (11.3%), and solvents (12.1%).

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