Pulp Non-Fiction Fuels Hostile Takeovers.

(From The Moscow Times)

With its bullet-riddled cover design, "Shareholder vs. Joint Stock Company" looks more like a detective novel than a consultant's guide to doing mergers and acquisitions the Russian way.

But pulp fiction it is not. And the advice it contains for those waging hostile takeovers or building their defenses against corporate predators could turn a Western lawyer's hair white.

"The fact is, there are a number of methods that allow one to gain tactical advantage [in corporate disputes]," said the book's author, Alexander Osinovsky, who is a lawyer with the St. Petersburg law firm Qualitet. "Not all of these methods are irreproachable in terms of morals, but they are used."

This is the world of bogus bankruptcies and bribable judges, a world where crippling injunctions handed down by courts in far-flung provinces lead to armed face-offs at factory gates.

"It is hard to evaluate the Russian acquisitions market because, alongside the internationally accepted understanding of takeovers, Russia has its own unique practice," said Tseren Tserenov, head of the Economic Development and Trade Ministry's department of corporate governance and the new economy.

"As before, in the country there exist means of acquiring assets for far less than their true market value, when property or property rights are acquired by unlawful court decisions," Tserenov said. "From the macroeconomic viewpoint, this results in low capitalization of domestic companies and holds back investments in the real sector of the economy."