A company that supplies high-quality packaging for nearly all Ukrainian dairy products has fallen into the hands of corporate raiders and risks disappearing from the domestic market. Consumers may lose their favorite products on store shelves, producers may suffer significant losses, and the people who spent 15 years building a successful enterprise may be left without jobs.
When choosing our favorite products from the many options available on the market, we never consider how much our preferences can be influenced by the banal packaging of these products. Indeed, packaging can't make a product better, but it can easily make it worse. In poor-quality packaging, food can lose its properties and flavor, spoil, and become hazardous to the consumer's health and even life.
Today, many Ukrainian food producers are struggling to enter foreign markets. The main requirement is to align their production standards with European or international ones. However, it's clear that even the highest-quality product has no chance of reaching foreign consumers without high-quality packaging.
Coveris Rigid Ukraine, a company located near Kyiv that produces packaging for the dairy and confectionery industries, received an international quality certificate back in 2001. Today, it is one of the largest packaging manufacturers in Ukraine, accounting for approximately 60% of the market.
History in brief
Coveris Rigid Ukraine began as Interagropack LLC in August 1998. At the time of its establishment, the company was 100% owned by a Ukrainian investor.
However, the market was rapidly developing, demanding the same from the company. The best option was to attract a foreign investor with extensive experience and expertise in new technologies in packaging materials production. Among the leading European packaging industry players, the choice fell on the Hungarian holding company Pannonplast Industries Plc. The foreign partner became a shareholder a year after its inception, holding a 51% stake. Consequently, the Ukrainian side has owned 49% of the authorized capital since then.
In subsequent years, the company fully met investors' expectations. Interagropack's production operations were certified in accordance with the international ISO 9001:2000 standard; since 2001, the company has implemented and maintained a quality management system. Today, its clients include over 150 companies, both domestic and international.
However, any successfully developing enterprise has a drawback: sooner or later, market "sharks" begin to encroach on it. In 2013, a globally renowned multinational holding company, managed by an American fund, expressed interest in Interagropack. As a result, the holding company managed to acquire a stake in the company. Then, in 2013, Interagropack became part of the aforementioned group of companies and changed its name to Packor Ukraine LLC.
Who's in charge here?
Throughout this time, from the company's inception, through its development, and until it caught the eye of major international players, Vladimir Ivanovich Stepakhno remained the company's permanent director. It is to him and the team he assembled that the company owes its entry into foreign markets, its international quality certification, its leadership position among Ukrainian manufacturers, its strong customer base, and its production volumes. The company gained increasing confidence, easily accelerating production; employees and management worked as a single team, the composition of which remained consistent for years, accumulating experience and honing their collaboration.
However, this well-oiled machine malfunctioned on May 29, 2013, when Vladimir Ivanovich Stepakhno died. On that same day, an illegal battle for control of the enterprise began, threatening to destroy it.
The very next day after Stepakhno's death, the company appointed a new CEO. According to the Unified State Register of Entrepreneurs, Ivan Ivanovich Stepakhno, the deceased director's brother, has been the head and CEO of Coveris Rigid Ukraine since May 30, 2013.
The extent of this man's cynicism is difficult to fully appreciate. Judging by the speed with which Stipakhno carried out his appointment, he either had a plan in advance for such a contingency, or he was so indifferent to his brother's death that he managed to both plan and execute the takeover of the enterprise on the same day. In any case, both versions are monstrous and provide a clear picture of Ivan Ivanovich Stipakhno's true nature.
As it turned out later, the basis for his inclusion as CEO in the Unified State Register was a single document – the Minutes of the General Meeting of Participants of Packor Ukraine LLC dated May 30, 2013. In pursuance of this Minutes, Stipakhno himself issued an order appointing himself CEO and assumed his duties on May 30, 2013.
Interestingly, the information about the change in management was entered into the Unified State Register of Entrepreneurs almost a year later – on March 19, 2014.
However, the most interesting thing is that no general meeting actually took place on May 30, 2013. Furthermore, the aforementioned minutes state that representatives of the Ukrainian and Hungarian parties acted on the basis of documents dated... February 2014! That is, documents that didn't yet exist at the time, and were drawn up eight months later. The situation is similar with the name of the foreign co-owner's company: in the 2013 minutes, the foreign party is a company that only received a share in the company in 2014. Not to mention the fact that the individuals who supposedly represented the foreign and Ukrainian investors at the meeting had no authority whatsoever to raise the issue of replacing the director.
These details are more than sufficient to confirm that the protocol was forged. That is, the single document by which Ivan Stipakhno appointed himself CEO is a forgery. And all decisions made in this protocol are illegal.
Despite the fact that the order appointing a new general director was a sham, Stipakhno ran the company unchallenged for about a year, successfully exploiting his position for personal enrichment. Having acquired a taste for the business, the false director began to run it as if he were its sole owner. The existence of other shareholders was completely forgotten. In 2014, the Ukrainian investor stopped receiving not only his dividends but also any information about the company's operations. Consequently, he was forced to file a lawsuit.
Incidentally, one piece of evidence in the case is a letter from Ivan Stipakhno to the defrauded investor, in which the fraudster confirms that he is the CEO, specifically dated May 30, 2013. In court, however, he defends a different version. He claims the fateful meeting of May 30, 2013, never took place; it took place in March 2014, and the incorrect date was the fault of a secretary who made a typing error. Furthermore, Stipakhno insists that for two years, he had no idea he had been appointed CEO. And he wouldn't have known if the legal proceedings hadn't begun.
However, all the impostor director's theories fall apart easily with just a little digging. Despite all the existing documents and facts pointing to his lies and confirming the illegal takeover of the company, Ivan Stipakhno continues to deny it, dragging out the legal proceedings by any means necessary. Meanwhile, the company is spending hundreds of thousands of hryvnias on lawyers, which, by rights, should have been used to increase employee salaries.
In October 2015, shareholders, concerned about the company's financial situation, ordered an audit to determine the current state of the company. However, the so-called director, sensing danger, actively resisted the audit, despite it being in violation not only of the company's charter but also of Ukrainian law. Documents were concealed or lost, and auditors were denied access to the company's premises. Despite such active resistance, the auditors uncovered embezzlement of at least 15 million hryvnias during his two years of uncontrolled rule.
What's next?
It is clear that a person who is engaged in document forgery, corporate raiding, and the implementation of shady schemes at an enterprise is not at all interested in developing that enterprise.
Typically, such stories, of which there are many, end in a standard way. The company is either artificially driven into bankruptcy, declared unprofitable, and bought out for next to nothing; or it is acquired by some holding company; or it simply closes down.
Considering that this is virtually the only Ukrainian company producing packaging with world-class quality, producers working for export may face serious problems finding an alternative supplier. Furthermore, filling the 60% gap in the domestic market will be difficult, as this threatens both product supply disruptions and significant losses for producers.
At the same time, the company, 100% Ukrainian at its inception, having traveled a long path to success and ultimately lost all its domestic owners, will likely disappear from Ukrainian industry. Along with it, it will throw into the jobless market the highly skilled specialists whose team had been formed at the company over the past decade and a half. And all this "thanks" to Ivan Stipakhno, a man who cynically exploited the death of his own brother for his own selfish ends.
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