The Supreme Court saved Ust-Kamenogorsk Oil Production Plant
The dispute between the bank and the enterprise shall not interfere with the participation of the plant in the state program
LLP "Ust-Kamenogorsk Oil Production Plant" produces refined sunflower oil, which are known in the Kazakhstani market under the trademarks "Askan" and "Zarechnoye".
The company produces about 11 000 tons of oil each year, paying taxes and other payments to the local budget in the amount of 100 million tenge. At the same time, the plant doesn’t have any debts.
"Our factory employs more than 200 people who receive a salary and a social package regularly, without any delay", - said the director of "Ust-Kamenogorsk Oil Production Plant" Ilya Batov. - Our company is involved in many programs, as a philanthropist and helping those in need".
However, in 2011, the company faced a problem, the solution of which was delayed for 5 years.
Thus, the company has expressed a desire to participate in the program "Agribusiness - 2020", previously sending a request to the Chamber of Entrepreneurs of East Kazakhstan region. The fact is that as a result of repeated breach of the agreement by the bank-operator - "VTB Bank" Kazakhstan, Ust-Kamenogorsk Oil Production Plant experienced serious financial difficulties.
"Since November 2014, we have repeatedly appealed to VTB Bank to grant loans on renewable contracts, but the bank didn’t grant it", - says the company's director Ilya Batob.
The partnership and the bank signed an agreement to open a credit line on 10th of June 2011, in accordance with which the debtor obtained a credit line in the amount of more than 2 billion tenge, the term of the renewable part until 21st of September 2016, the term of non-renewable part until July 30, 2021, the payment of remuneration11% per annum.
As it was noted in the Chamber, according to the key point of the basic contract, the bank's interest rate is 11% per annum, the interest rate offered by the bank of 25% per annum has the intention to put the company in the category of loss-making and is contradicts to the essential terms of the contract, that is, in fact, is illegal and it changes all the basic essence of the contract.
The lack of necessary funding at the time would have inevitably led to a failure in the supply of raw materials, production stop, loss of markets for finished products, the loss of specialists. The result would be bankruptcy of the enterprise.
Given the fact that funding for the program "Agribusiness 2020" goes through the second tier bank-operator - "VTB Bank" Kazakhstan, the oil production plant is not able to directly fulfill obligations to the administrator of the Program "Agribusiness 2020" – the Ministry of Agriculture RK, as the bank takes the money for repayment of interest and principal debit.
"It should be noted that the state program, operating in the Republic of Kazakhstan for the support of business, is focused primarily on the financial rehabilitation and support of small and medium agribusiness, not banks. We believe that the dispute between the bank and the oil production plant can’t be cause for its exclusion from participation in the state program "Agribusiness-2020", - said the director of RCE of EKR Igor Shatsky.
The National Chamber of Entrepreneurs "Atameken" send a petition to the Ministry of Agriculture to extend the participation of LLP "UKOPP" in the state program "Agribusiness 2020".
Thus, the company was forced to take extreme measures and to submit a claim to the Economic Court of East Kazakhstan region on the use of accelerated rehabilitation procedure.
As a result, the petition was supported by regional prosecutor's office, the Chamber of Entrepreneurs and the Department of State Revenue. The claim was satisfied partially. The enterprise was given 2 years, instead of the requested 4 years and 11 months.
The Court of First Instance partially approved the application of the partnership, based on the evidence presented by the partnership, confirming the threat of insolvency of "Ust-Kamenogorsk Oil Production Plant" upon expiration of the date of fulfillment of obligations in the next twelve months.
The appellate court cancelled the court ruling and approved the application of the partnership in full, based on the fact that the term of the accelerated rehabilitation in two years, established by the trial court is clearly insufficient for the improvement of the activities of the enterprise.
Thus, the deadline was extended to 4 years 11 months.
But JSC "Bank VTB (Kazakhstan)" filed a cassation petition to the Supreme Court.
As a result the Supreme Court decided to refuse to transfer of the petition for review of the decision of appellate judicial board on civil and administrative affairs of the Court of East Kazakhstan region.
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