OREANDA-NEWS. July 20, 2010. Following an application by Kawe Kapital, the court has assigned legal representatives to protect the rights of former minority shareholders in Eesti Telekom, who have initiated court proceedings claiming fair compensation for having to sell their shares in a distressed situation. Harju County Court last week gave the former shareholders of Eesti Telekom 30 days from the date of publication of official notice of the court order to pay 300 000 kroons into court as a deposit to cover legal costs. The court appointed law firm SORAINEN lawyers Reimo Hammerberg, Carri Ginter and Urmas Volens to represent them, reported the press-centre of SORAINEN.

Kristjan Hanni, a board member of Kawe Kapital, said the court application was preceded by thorough analysis. "Thanks to the distressed situation on the market and the extraordinary needs of the Estonian State to ensure compliance with the Maastricht criteria, TeliaSonera acquired Eesti Telekom shares from the minority shareholders more cheaply than the reasonable value of the shares," said Hanni.

Urmas Volens, who was one of the drafters of the law enabling appointment of group legal representatives similarly to class actions, said that the provisions were exactly designed to ensure that individuals who lose their shares at an unfair price due to takeover of the company have the opportunity to form a group or class to jointly protect their rights and finance their legal representation.

"The decision represents a major step in the practice of protecting minority shareholders. Although the provisions have existed since 2006, they have not been used hitherto," said Carri Ginter, adding that according to expert estimates there are strong arguments to suggest that the purchase price paid during the takeover of Eesti Telekom may have been unfairly small.

Hanni recalled that in 2003 the Finns were successful in arbitration in achieving a 15% higher price than offered during a voluntary takeover when Telia took over their Sonera shares. "The Finns had the resilience to fight and I very much hope that we are not weaker," said Hanni.

In January the minority shares of Eesti Telekom were transferred to TeliaSonera. This affected over a thousand shareholders, including Kawe Kapital AS.

"We have strong arguments for claiming additional compensation. But choosing the right approach is important. By appointing legal representatives for the minority shareholders as a class, the court prepared the way through competent legal representation, so setting a precedent," added Hanni.