Yes. As a shareholder you own part of a company. I do not know what percentage shareholding Rostelcom held, or whether they were voting or non-voting shares. The type of shares will determine the shareholder’s influence - if they were ordinary (voting) shares then the shareholder has influence and power within the company to determine what happens, if they were non-voting the shares are basically just an investment.
Yes. But probably not as much of an asset as you might think. I believe a great deal of SFOS is open source, so will effectively have no monetary value as a company asset. Only the proprietary bits will have a value. I suspect that some value will also be assigned to SFOS and App Support as ‘packaged products ready for sale’ but have no idea how much. Again I do not know what proportion of both SFOS and App Support is proprietary and what is open source.
Yes, they are entitled to the ‘winnings’(i.e. profits), but (a) only if there are some, and (b) only if the board of the company decides to pay those winnings to the shareholders as dividends. Often companies do not pay dividends in any particular financial year for all sorts of quite legitimate reasons. Such reasons might be that they want to re-invest the profits in the company to finance expansion, or a new project, or they may want to strengthen their balance sheet (i.e. build up cash reserves) as a hedge against an expected downturn in business or for something else.
No, there weren’t any ‘winnings’. Jolla Oy had entered a court administered restructuring due to bankruptcy. In other words the company was no longer what is known as a going concern. Every financial year a company has to legally declare that, for the next 12 months, as far as it can reasonably see, its assets will cover its liabilities. In other words at the end of that financial year if it ‘cashed up’ everything it could it pay its creditors in full. If it can’t make that determination then it is deemed insolvent (bankrupt). Jolla Oy said that it made a turnover of 5 million in the last financial year, which is completely different to a profit (your ‘winnings’) of 5 million. Turnover is basically revenue (income) coming in to the company without looking at how much cost it took to earn that 5 million. If it cost them, say, 6 million in costs to earn that 5 million in revenue then they’ve actually made no profit at all, but a loss of 1 million. If Jolla were still making a profit then they wouldn’t be bankrupt. Company board directors have what is known as a ‘fiduciary duty’ to their shareholders - and in part this is to keep the company a going concern for as long as possible by exploring all options to keep it that way. Partly this duty exists because keeping a company going is almost always better for its creditors (to ensure they have the best chance of being repayed what they are owed in full). And by creditors, we don’t mean shareholders. Creditors are people who are owed money from the company - so things like rent on office space, banks who have loaned money to the company, employees who need to be paid their salary, contractors who have current contracts to deliver services to the company (consultancy, cleaning, printing, advertising, legal, web hosting, etc).
Yes, if the shareholders have voting (ordinary) shares as explained above. They can vote in the proportion of shares that they hold. This may be a majority shareholding, in which case they have a great deal of power, or a minority shareholding, which is more about influence than power.
Neither do I. Directors are appointed and removed from company boards according to whatever processes, and according to whatever rules, are set out in the company’s Articles of Incorporation. This is a formal document which is drafted and agreed when a company is originally set up (its ‘constitution’ if you like) and which it must legally operate within the boundaries of. There could be many ways of removing a director from a company board - voting off by a majority number of directors, voting off by a majority vote of shareholders, disqualification to serve because that director has acted in a way materially detrimental to the company, disqualification to serve because the director has been convicted of a relevant criminal offence (e.g. fraud) and so on. However directors are removed there must be a legal, formal and legitimate process behind the removal - they can’t just be thrown off the board because, for example, nobody likes them any more.
As I posted above, nobody has stolen anything here. A proper legal process has been executed and overseen by the Finninsh court according to Finnish insolvency law. There is no sleight of hand or trick here. This is not a case of Jolla Oy simply deciding themselves that a good way of removing Rostelcom from their ownership would be to just ‘change companies and lose Rostelcom along the way’ If Jolla Oy was making a profit, and therefore solvent, they couldn’t do this. As I said above, the company directors have a duty to look at all possible ways of keeping the company going as long as they possibly can - and I suspect this is the reason that the uncertainty around Jolla Oy’s viability has lasted so long. When, after exploring all options, this is no longer possible and they are deemed insolvent (no longer a going concern) then they can enter a court administered bankruptcy process. At this point the company directors effectively lose control of what now happens and the court decides according to Finnish insolvency law.
What’s likely to have happened, in very simple terms, is as follows:
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The court will bring in an independent insolvency expert who will help them value the assets of the company. This will look at tangible assets (SFOS and App Support proprietary code, any property they own, coffee machines, intellectual property, patented or copyrighted designs, … whatever) and intangible assets like the Sailfish and Jolla brand value (known as ‘goodwill’). Companies like Apple, etc probably have brand values of billions because they have global reach, are household names, etc. Jolla, with a customer base probably only in the 10,000’s and not well known outside its enthusiast base, will only have a very small brand value.
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The court will then oversee the sale of those assets. Generally they will want to get the highest price possible for them so that the insolvent company’s creditors (not shareholders as described above) get as much money back towards what they are owed. Obviously this won’t be 100% (if it was the company wouldn’t be bankrupt), but as much as possible. However the court will temper this objective with other considerations - so they’ll mandate the sale of the assets to whomever meets those objectives and other considerations. Other considerations could be things like protecting the failed company’s employees’ jobs (which is why ‘management buyouts’ are often chosen), or ensuring that a customer base wouldn’t be left with a paid for product or service that would no longer work, or not selling to a foreign company deemed hostile to Finland’s interests, or to protect the national interest, or whatever. I have no idea what particular considerations the Finnish court will have used in Jolla’s case, but whatever considerations they did use will have been legitimate and according to law.
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Once all of the above has been successfully completed, the Jolla Oy company will be dissolved and removed from the national register of companies. And that’s it.
So, to answer your last specific question, (a) nothing has been stolen, and (b) there isn’t really any other name for what has happened that I know of over and above what I have said above.
Maybe a way to think of this, from the point of view of a shareholder losing their financial investment in Jolla Oy through the bankruptcy process, is as follows:
When you go to a casino to play roulette your hope is that by placing a bet (investment) you’ll get a much bigger win back. So you put your money on Red, because you think that is a winner and the odds look good. But if the wheel spins and the ball lands on Black you’ll have no winnings and, even worse, you’ll lose your bet as well (i.e. your original investment). You’re not going to then turn around and accuse the casino of stealing your money or your property are you?
By placing a bet (investment) you bought yourself a stake in the game. You wanted to win big, but you also knew that you could lose. It was a risk you decided to take. Whilst investing in a company by buying shares can be a little more scientific and less open to pure chance, the principle is the same - you invest in a company in the hopes of a return, but you also know that there is a risk that you will lose your investment if things go badly. This is exactly what has happened with Jolla.
Sometimes I very much like his comments but sometimes I don’t.
