TALLINN - Invigorated by its recent court victory over Oliver Kruuda, chief executive officer and largest shareholder of Kalev, Estonia's leading confectionery, the minority shareholder, Milestone Ltd., has called for an extraordinary shareholders' meeting in order to elect a new supervisory board.
Milestone Chairman Priit Kotkas said that he had notified his request on Nov. 7 although company officials said that they had not received it.
Coming just days after the Tallinn City Court decision, Kotkas, whose Milestone owns 25 percent of Kalev, apparently wants to use the momentum to force changes in how the candy maker is run.
In response, Kalev said Nov. 11 in a news release that "there are no grounds to call an extraordinary general meeting and that with the application the manager of Milestone, Priit Kotkas, deliberately wishes to mislead the public and damage Kalev's reputation."
Kalev managers pointed out that according to the Estonian commercial code an extraordinary general meeting cannot be convened if less than two months remains until the next scheduled general meeting.
"Milestone filed its application on Nov. 7. The financial year of Kalev ended on June 30, thus in accordance with the commercial code a scheduled general meeting has to be held on December 31 at the latest, or in less than two months," Kalev said.
The court ruled that Kalev had violated other shareholders' rights when Kruuda, who reportedly owns over 50 percent of the company's stock, failed to make a buyout offer to the company's 1,300 minority stakeholders, as required by law. The court also ruled that the company had illegally decided to buy back some of its own stock in December 2002.
This was the first instance in which a court has ruled in favor of a small shareholder in a major company.