Minor Shareholders Lose Another Battle Against Đuro Đaković Group

Đuro Đaković Group has won another battle against minor shareholders after the Commercial Court in Osijek – Permanent Office in Slavonski Brod issued a ruling dismissing the plaintiffs’ proposal. The announcement on the Zagreb Stock Exchange states that the lawsuit from the minor shareholders was dismissed at the preparatory hearing. Namely, the minor shareholders sued the company requesting the annulment of the decisions made at the General Assembly held at the end of August last year with a proposal to revert to the previous state.

Several lawsuits from minor shareholders have been resolved so far (this one is registered under number P – 289/2022), but it is to be assumed that they will appeal to the High Commercial Court.

The minor shareholders of Đuro Đaković sued the company because a decision was made at the General Assembly held on August 31 to simplify the reduction of the share capital (at the proposal of the Management Board, whose current president is Marko Ćosić, who was a member at that time). Due to carried-over losses from previous years (6.7 million euros or about 50 million kuna), the share capital, which then amounted to 13.5 million euros (about 100 million kuna), was reduced by the amount of the loss.

In addition, the value of the ten kuna share was halved, and then two shares (each now worth five kuna) were merged into a new – one share, worth ten kuna. The minor shareholders believed that they were harmed by such a decision, as they were left with only a small part of the capital they invested.

Then, at the General Assembly, a decision was made to increase the share capital by injecting money and the rights of the Czech company Acquisition (along with the state, the largest shareholder of Đuro Đaković) for recapitalization. However, the General Assembly completely excluded the preemptive rights of existing shareholders, including the minor ones, when subscribing to new shares.

Since only Acquisition was allowed to inject money by purchasing newly issued shares, the share capital increased by 30.9 million euros (about 232 million kuna). In the lawsuit, the minor shareholders stated that this is an unconstitutional ‘expropriation of citizens’ private property in these crisis times without adequate compensation (…), which is contrary to the fundamental structure and purpose of the Republic of Croatia, which exists for the benefit of citizens, and means grossly encouraging inequality between shareholders of Croatian citizens and the first shareholder.’ The Commercial Court in Osijek has not accepted their arguments so far.