CySEC cracks down on Veles International and its sole shareholder

The Cyprus Securities and Exchange Commission (CySEC) has decided to take action against Veles International Ltd, a Cyprus Investment Firm (CIF), and its sole direct shareholder, Dmitry Vitalyevich Bugayenko, after finding the impact of the Russian – who has Cypriot citizenship and has been included in the US sanctions lists – on the company was detrimental to its “sound and prudent management”.

In a bid to rectify the situation, CySEC said it would be taking a series of measures that will come into effect after a 12-month period. Bugayenko's voting rights attached to his shares in Veles International Ltd, which constitute the entirety of the CIF's share capital, will be suspended. This means he will not be able to exercise his rights as a shareholder to vote on company matters for a specified period.

Furthermore, Bugayenko, who serves as a Non-Executive Director of Veles International Ltd, and Ganna Dotsa, an Executive Director, will be prohibited from exercising management duties on the company's Board of Directors for two years. This effectively bans them from making managerial decisions for the company during this time.

In determining the type of measures, CySEC considered “the particular circumstances of the CIF, namely that Ganna Dotsa and Dmitry Bugayenko are the only non-independent directors of the CIF, following their appointment by the CIF's direct shareholder”, it said.

CySEC explained that it set the 12-month deadline after considering the need to ensure that “the funds and financial instruments are ultimately returned to the investors”.

Bugayenko was included in the Sanctions List of the US Treasury’s Office of Foreign Assets Control. His nationality is listed as “Russia; Cyprus”, while his country of residence is listed as Cyprus.