Olena Kapustinska
Deputy Managing Partner,
Attorney at Law

Raiders are cleaners of the business. As odd as it may seem, this is true. What lies in temptation's way often becomes the target of raider attack. What is well-protected is left untouched. This is a survival of the fittest in a nutshell.


However, at the dawn of civilization, the human kind was by no means the strongest in the literal sense of the word, but somehow it still survived. Why? Because the man was smarter. The mind and the knowledge are the same force, only a lot more powerful. The same principles apply in business. There are the strong ones who got the money, administrative resources, etc. Yet, being smart and cautious enough, one can survive in a battle with them.


Rader may not necessarily be after the company’s assets. His focus can be destruction of competitor’s business. Depending on the mission, the raider selects the mechanisms using which he will accomplish it. He finds the jugular, the so-called “entry point.” It may be co-owners of the company, law-enforcement agencies, staff, creditors etc. Following identification of the entry point, preparatory procedures commence, often going unnoticed by the top managers of the potential victim. The latter begins to realize that the company got attacked by raiders, only after the process has already gained momentum. At this point, stopping it becomes extremely difficult.


Raiding is something one should prepare for in advance, even though effective countermeasures can be used even during the raider attack. The key is to identify the exact target of the attack. For example, corporate assets can be pledged, let out for a long-term lease or just sold on a deferred-payment basis. If the raider starts buying shares, you can initiate additional issue to dilute the share packages owned by unreliable shareholders. If a negative PR campaign is launched against the company in the mass media, one needs to adopt a tough stance, refute false information and, if possible, go to court with a lawsuit for protection of business reputation. For every action there is a reaction.


However, the most efficient protection against raiding is a seamless security system. Such a system must keep a close eye on the following aspects, namely:

  • potential re-title of the company assets by the third party in his or other person’s name under specific documents, as well as prospect change of the ownership as a result of fraud;
  • potential inspections from controlling authorities paralyzing the company’s operation, possible fines and major additional taxes and charges;
  • potential investigatory actions (searches, etc.) in the company as a result of ordered criminal cases;
  • potential leakage of confidential information;
  • potential spread of false and defamatory information;
  • potential corporate conflicts between the company owners, etc.


Having properly identified and analyzed the weaknesses, it is possible to develop a system of measures which can turn the business from an easy meat into unwinnable fortress.




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