Claiming the dividends not paid by an industrial enterprise to its minority shareholder due to the gross violations of IAS and RAS committed during its audit in 2015 against the auditors
An audit conducted in 2015 failed to take into account certain transactions made by a company included in a complex corporate structure thus relating it with its contractors.
Some transactions resulted in considerable reduction of the company’s profits with its financial cash flows being re-allocated in favour of its major shareholder. All those facts were ignored by the auditors.
Although similar disputes occurred in foreign jurisdictions, Russian courts had never tried a case like this previously.
Despite the fact that the Russian court dismissed the claims, it did not find any evidence that the parties in question were related to one another or any accounting misstatements were made by the company as far as its audited transactions with those parties are concerned.