Ukrainian tycoon faces legal challenge over Warsaw delisting

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The Ukrainian founder of one of the world’s biggest producers of sunflower oil is facing a legal challenge from minority shareholders over his move to delist the company from the Warsaw Stock Exchange.

Andriy Verevskyi decided in March to retake full control of Kernel, which went public in Warsaw in 2007 and is one of Ukraine’s largest agricultural groups. He cited a lack of liquidity and an absence of coverage from analysts.

Kernel’s planned departure from the Warsaw bourse is the highest-profile delisting of any Ukrainian company from a foreign exchange since Russia’s invasion, which sent the group’s shares tumbling. In March, minority shareholders claimed Verevskyi was trying to regain control of Kernel, which is registered in Luxembourg, on the cheap and without their consent.

Verevskyi, who held on to almost 40 per cent of the company after the IPO, has offered minority investors 18.5 zlotys a share. The shares were sold for 24 zlotys in the IPO and were trading near 60 before the invasion.

Kernel was served a summons by a law firm representing minority shareholders, most of whom are based in Poland, in the first step in their legal challenge. Under Luxembourg law, Kernel has a deadline of this weekend to appoint lawyers. The shareholders then intend to file a suit in a court in Luxembourg. 

According to the summons, Kernel’s board exceeded its powers in deciding to delist without first getting approval from shareholders. The shareholders also claim there is “a conflict of interest by one or more members of the board,” according to a summary of the summons, which was shared by the law firm with the Financial Times.

Verevskyi controls Kernel through Namsen, a Cyprus-registered investment company. Minority shareholders initially hoped that Polish regulators would prevent the delisting, but the watchdog said it could not intervene because the sunflower oil producer was registered in Luxembourg.

The chair of Poland’s KNF regulator, Jacek Jastrzębski, told the Financial Times in June that the delisting could be “a threat to our [Polish] market’s reputation,” but also “a lesson for investor education.” Shareholders knew that Kernel was registered outside Poland when they bought shares, he argued. 

Kernel did not respond to requests for comment. 

Kernel this month struck a deal with bondholders to postpone repayments on debt the group issued before last year’s Russian invasion.