The macroeconomic situation in Ukraine contributes to the growth of both external and internal threats to the security of the enterprise. Any entrepreneur asks the question “how to protect your business and property?”. Today, this issue comes to the fore and becomes a key one in making managerial decisions at any stage of business development.
Legal security is one of the pressing issues in the context of the unstable economic situation. Business, which is already in a difficult situation, must also adapt to the new realities of the state of the law enforcement and judicial system. What safety factors should be taken into account based on the current situation?
The general situation conducive to the development of raiding
The macroeconomic situation in Ukraine contributes to the growth of both external and internal threats to the security of the enterprise:
- legislative norms are introduced that promote and simplify raiding;
- law enforcement agencies due to constant reorganizations, lack of will, unformed criminal procedure code – do not fulfill and do not achieve the goals of their existence;
- almost all structures are corrupt, including those that, by their very nature, must guarantee the equality of citizens’ rights (courts, police, prosecutors, the Ministry of Justice, etc.);
- the level of poverty and social tension is systematically increasing;
- and so on…
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In such conditions, there are many who want to make a quick profit, even if illegally, while others just need money from today to today for various reasons. Basically, these people are not afraid of criminal liability, believing that they cannot be punished through fraudulent operations and the use of methods to obfuscate the traces of a crime. Such conclusions are not unfounded, given the real operational capabilities of law enforcement agencies and the judiciary.
The legislative system does not properly deal with such dealers, moreover, the introduction of electronic systems for registering property, on the one hand, simplifies business activities, and on the other hand, creates conditions and opportunities for the preparation of raider seizures of property, making information from them public and available to third parties.
In the conditions of publicity and availability of information that is of commercial interest to the enterprise (mainly related to real estate), the possibilities of criminals associated with preparing to commit a crime are improving, which significantly increases the chances of illegal seizure of property.
Under conditions of trade secrets, a lot of information will not be available at the initial stage, which increases the financial costs of criminals associated with obtaining it. If the complexity of the preparation is high and the cost of it too, then the raider takeover may be abandoned already at this stage, since there will not be enough benefit from its implementation.
The trend suggests that more and more often registrars or notaries who register real estate and have direct access to information in the registry become participants in the illegal seizure of property.
In such conditions, business owners should think about the need to prepare the enterprise for possible illegal encroachments and take the necessary legal measures to protect it.
What to expect when preparing legal defense against raiding
To begin with, it is necessary to clarify what is meant by the so-called “raiding”. The term itself has recently been used in everyday life to refer to cumulative illegal actions aimed at the illegal selection of property of value to business in favor of malefactors.
The term “raiding” is not legally literate in the designation of committed crimes and other names of crimes are used in criminal qualifications depending on the illegal actions committed (for example, fraud, production of forged documents, and others).
In Western countries, raiding is also considered an aggressive takeover of companies by buying back their shares and subsequent removal of management, which we would consider quite natural and legal way … That is, the understanding that raiding is actions aimed at stealing the property of legal entities, in mainly inherent in the inhabitants of the CIS countries who went through the dashing 90s, from the time of which, apparently, such a characteristic of the term has taken root.
There are several negative features of raiding that need to be clearly understood and not under any illusions:
- It is impossible to protect yourself from a raider takeover, but you can only minimize the negative consequences
- The capture is carefully prepared and will happen quickly and unexpectedly
- In most cases, the capture occurs with the assistance of key employees of the enterprise, co-founders etc.
- Everything that can be stolen from an enterprise physically and quickly is guaranteed to be stolen, especially money and movable property
- If in the process of capture the statutory documents, orders and protocols are destroyed, which is quite likely, then it is almost impossible to restore your lost rights. Therefore, documents must be stored in a safe place
- The bulk of state bodies that are supposed to protect your rights will not do this. Moreover, it is highly likely that even without corrupt agreements, they will openly support the raiders.
The principle will work here – that the one who loses the legal fight will be a raider - Destruction of accounting, electronic databases, theft of funds – this is something that will not be restored
- If the raiders manage to make money, it is possible that all this illegal profit will go to finance the fight against the victim
- After the raider takeover, many of the employees are unlikely to want to continue working together
From the above, you need to draw timely conclusions and prepare.
The whole system of legal protection against raiding comes down to the creation of a procedure and procedure in the event of a negative event, which guarantees the restoration of legal rights, a minimum of losses, and the possibility of continuing the normal activities of the organization.
You should not be mistaken that you can build a system of protection against raiders on your own. Raiding in Ukraine is a kind of “professional” criminal activity, as a result of which the perpetrators improve their skills, knowledge, gain experience, strengthen ties, earn money and form capital for their intended use (that is, for raider seizures). A raider takeover happens quickly, property and financial resources are withdrawn from the enterprise within 2-3 days (during which you may not even have time to open a criminal case), and in any case, the capture takes place with the participation of your top management. Having access to money and connections, raiders can close any gaps in their knowledge and activities: legal – by hiring one or a group of corrupt and unscrupulous, but quite qualified lawyers ready for a round sum for everything; provide a “roof” – by giving a bribe to the court, the police, the prosecutor’s office, the Ministry of Justice, etc.; hire force support, etc..
Modern forms of combating raiding involve the participation of qualified legal professionals in protecting legitimate interests, maximizing publicity and publicity of ongoing events, and involving public organizations, the media and public leaders in solving the problem.
What you need to consider when preparing legal protection against raider seizure
To form an effective strategy and tools to protect your business, an entrepreneur must assess the sources of threats that are most likely to appear.
The main threats and destabilizing factors include:
- external factors:
- illegal activities of criminal structures aimed at seizing business (raiding): competitors, individuals with administrative resources, partners, organized criminal organizations, etc.;
- offenses by corrupt elements from among representatives of the administration, regulatory and law enforcement agencies (various forms of extortion of money);
- the crisis of the legal institutions of the state, as a result – the practical absence of the ability to protect business by legal means;
- business virtualization due to the introduction of electronic reporting forms, etc.;
- increased social tension. An entrepreneur today operates in an absolutely hostile environment, both in society and in his own enterprise, which directly contributes to the strengthening of negative trends associated with personnel.
- internal factors:
- action or inaction (including intentional or not intentional) of the employees of the enterprise, contrary to its commercial activities, which may result in causing economic damage to the company. The point is that in a society with a colossal and ever-increasing stratification of the population, it is difficult for the owner to count on the understanding or, at least, on the loyalty of all members of the team. As a result, a layer of personnel involved in the so-called “internal entrepreneurship” is increasing at the enterprise, which in principle differs from small, medium-sized theft and poses a direct threat to business.
- loss of information resources;
- leakage of information constituting a trade secret;
- leakage of data constituting confidential information, which entails the undermining of the company’s business image, the failure of contracts;
- personal conflicts of personnel with regulatory and law enforcement agencies, etc.
Both external and internal factors are dynamic, adaptable and evolve with the business system. Thus, the above listed threats will only intensify in the near future.
Factors can work in a business system with the presence of significant funds, property, etc., and in some cases without it. In any case, as a result of the operation of one or more factors, the business system will incur losses.
If you have any questions related to the article or others on the topic, you can contact WebYurist lawyers for advice.
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