RAIDERS: UKRAINIAN BUSINESS REALITIES

Every entrepreneur wants to be successful, have steady income from his business and then pass it on to his offspring. Everyone wants things to be honest and logical: you develop your business, waste time and money, calculate risks and as a result get some income. However, in the ukrainian business realities you should take into consideration one grave factor – raiders.

Everyone is at risk: raider methods

Unfortunately, the raider seizure is a threat to the business regardless of the company size, years of experience or field of activity. Anyone can become the victim of raiders: big textile factory or small coffee shop. You may interest them anytime.

Raiders evaluate a lot of different factors: the value of assets, the level of legal protection, owners` ability to resist them, the ways of raider seizure implementation. Convenient way of “visit” is selected depending on identified weaknesses: through leadership, employees, shareholders, competitors, creditors, law enforcement agencies, etc.

The most common methods of business capturing include:

• Purchase of shares. The company’s shares are bought from shareholders through nominees, often for minor amounts. As a result, raiders get a blocking or controlling stake, which gives them an opportunity to influence future of the company (to change management, sale assets, merger with another company, etc.).
• Bankruptcy. The credit debts of the enterprise are redeemed at business partners, creditors or created artificially by financial fraud and forgery. Further, a bankruptcy procedure is initiated through the court, business assets are impaired and bought for pennies.
• Seizure. It is a banal, but effective method that does not require lengthy preparation. It`s the most effective for enterprises with a low level of legal protection. With good planning, efficiency, bribery of judges and law enforcement agencies business can be “taken over” in a few hours. It`s quite difficult to repel such attack, so business protection lawyers` reaction should be instantaneous.

Raiders attack: how does it happen?

Raiders carefully prepare for each attack. Raider seizure may last a day, a few months or even years – depending on the level of business protection. Traditionally raider seizure can be divided into the following stages:

1. Step one: collect information

This is a key point as now raiders decide whether it is cost-effective to attack the company on not. Investment attractiveness of the object, the level of its legal protection and weaknesses are estimated. The information about staff is collected and raiders choose whom to make contact with. In such a way the leak of confidential information happens.

Raiders need reliable data about the object, anything that can be used for influence. For example, compromising information about shareholders, executives. Particularly “scandal” is a relevant way of influence to enterprises which cherish their reputation.

2. Step Two: attack

At first “test” attack may take place. During it the enterprise readiness for defense is checked. If the company can`t defend properly, raiders exactly will hit on the identified weakness.

Raiders have a large number of “tools”:

• capture through equity by purchase of payables
• through intangibles
• through its bankruptcy,
• by creating problems with the supervisory authorities
• through opening of criminal cases on company leaders
• provocation within the team
• and others.

As business protection experts thinks, every company has at least a few weaknesses, which can be used by raiders.

3. Step Three: opposition

This period can last from one day to several years, depending on the victim’s efforts to counter. In case of an effective rebuff raiders can stop on this step, thinking that it`s impractical to continue as business security is at the highest level.

4. Step Four: legalization of illegal actions

In the worst case, after a successful attack the legalization of raiders begins. And the enterprise management is completely captured.

Tips on how to protect your business

It`s possible to resist raiders, although, there aren`t the best conditions for a “legal” protection in Ukraine. Beforehand preparing for such hazards is the best variant. Just build a system of legal protection based on risk audit. But a rapid response during raider attack can also help, especially when the power capture method is used.

In this case, the scheme of cooperation of business protection attorneys with a physical security is well-worked. Attorneys restrain an attack on the legitimate while security prevents the possibility of further raider actions (seizure of territory or offices, access to documentation, physical pressure on the owners).

In order to prevent the raider capture, your business needs to be protected at various levels:

Legal level

• draw up founding documents competently;
• have a clean history of privatization;
• create a complex legal “traps” that could significantly prevent attackers;
• prepare your team to any “attack” through specific trainings, simulating raider seizures, searches, etc.

Financial level

• transparent conduct of business;
• absence of debts;
• financial interest of management and staff.

Reputation level

• a positive image of the company among partners and on the market;
• favorable internal atmosphere in the company.

Physical level

• reliable physical and technical protection of facilities;
• effective operation of the Security Service;
• constant work of foreign intelligence, monitoring of the market.

The most effective is a comprehensive business protection. Start with an analysis of possible risks, check of company`s documentation, repayment of debt, the establishment of internal atmosphere in the team and relationships with partners.

Do not put off working with lawyers, because prevention is always cheaper and more efficient. Call your business protection lawyers today.