Kernel: What the Squeeze-Out Case Really Means for Foreign Investors

Kernel is not merely another Ukrainian agribusiness. It is the country’s largest integrated agro-industrial group, one of the most profitable exporters, and since 2007, a flagship for Ukraine’s presence on European capital markets. In 2024, Kernel topped Forbes Ukraine's ranking of Ukraine’s most prominent agricultural companies by revenue, highlighting its strategic importance to the economy.

Yet Kernel now finds itself at the centre of one of the contentious corporate governance disputes in Ukraine’s business scene. The company’s controlling shareholder, Andriy Verevsky, has been accused by activist investors of exploiting the wartime environment to delist Kernel from the Warsaw Stock Exchange and force out minority shareholders at an unfair price. What initially was a corporate restructuring has developed into a broader debate about investor protection, fairness, and the long-term credibility of Ukrainian issuers on international markets.

I. Kernel: A Flagship of Ukrainian Agribusiness

Kernel’s scale is undeniable. It remains one of the most profitable agribusinesses in Eastern Europe and a key supplier of sunflower oil and grains worldwide. The company is vertically integrated, highly efficient and, under normal conditions, exactly the kind of success story that foreign investors seek.

Its long-standing listing in Warsaw was also symbolic: Kernel was one of the most significant Ukrainian presences on an EU stock exchange, signalling that domestic companies could operate under European disclosure and governance rules.

That symbolism has now cracked.

II. The Dispute: Legal Mechanisms vs. Perceptions of Fairness

The heart of the controversy lies in Verevsky’s decision to take Kernel private through a delisting and subsequent squeeze-out of minority shareholders.

The legal reality

Kernel is registered in Luxembourg. Under Luxembourg corporate law, once a shareholder crosses the 95% ownership threshold, they can initiate a mandatory buy-out of remaining minorities.

This mechanism—common in Europe—requires:

• an independent valuation,

• regulatory oversight,

• and confirmation that the offer price is “fair.”

Regulators and courts have already acknowledged Verevsky’s controlling stake and rejected several minority claims. From a narrow legal standpoint, Verevsky appears to have operated within the structure allowed by law.

But legality is not the whole story.

Minority shareholders argue that:

• the valuation was depressed due to Russia’s invasion,

• liquidity was artificially low,

• information asymmetry favoured the majority,

• and the delisting forced them to exit at a moment when prices did not reflect Kernel’s long-term value.

Some commentators describe it as deliberate “opportunistic timing.” Activist investors accuse Verevsky of building a campaign of “legal and illegal pressure” around the process. Whether or not such claims stand in court, they significantly shape market perception.

This is where Kernel’s case becomes more than a legal dispute: it becomes a governance signal.

III. How Other Ukrainian Champions Behave: Astarta, MHP, Ferrexpo

Institutional investors immediately compare what Kernel is doing with what other major Ukrainian corporates are doing under similar wartime stress.

• Astarta has maintained its Warsaw listing and continues to engage openly with minority investors.

• MHP remains listed in London despite operational and geopolitical shocks.

• Ferrexpo, facing sanctions-related pressure on its controlling shareholder and challenges in ore logistics, still honours its public-market obligations.

These companies are not without problems, but they demonstrate an apparent willingness to preserve their listings, transparency, and minority rights—even in highly adverse conditions.

Kernel’s approach stands out in the opposite direction: withdrawing from public markets when liquidity is low and valuations are depressed.

For global investors, this contrast matters.

IV. What Does This Mean for Ukraine’s Investment Reputation?

Kernel is not just a company—it serves as a proxy for how foreign investors assess Ukrainian corporate behaviour. Its actions have several implications:

1. Elevated Governance Risk Premium

Foreign equity funds will now account for a higher risk that, even if they invest in a Ukrainian issuer listed abroad, a controlling shareholder may later use legal mechanisms to take the company private at an unfavourable price.

This translates into:

• higher required returns,

• increased caution,

• and more rigorous due diligence.

2. Listing Abroad Is Not a Guarantee of Protection

Many foreign funds assumed that a Warsaw or London listing automatically implied European-grade governance. Kernel demonstrates that:

• the legal wrapper matters, but

• so does the behaviour of the controlling shareholder,

• and the responsiveness of local courts and regulators.

Investors now know that jurisdiction alone does not eliminate governance risk.

3. Damage to “Ukraine Inc.” Narrative

As Ukraine seeks massive post-war reconstruction capital, it positions itself as a future regional hub for agritech, logistics, metals, and energy. In that context, cases like Kernel’s become cautionary tales.

Foreign investors discuss reputational markers. They share stories. One bad case can overshadow ten good ones.

Kernel risks becoming the example that global funds cite when explaining why Ukrainian equity carries a discount.

4. Not All Ukrainian Issuers Are the Same

The good news is that other Ukrainian corporates—Astarta, MHP, Ferrexpo—offer a counter-narrative. They show that Ukrainian companies can maintain public accountability even through war.

This reinforces a key point: Ukraine is not monolithic. Governance quality varies by shareholder, sector, and corporate history.

5. So, Is Verevsky “Right”?

The answer depends on perspective:

Legally

He might have acted within the boundaries of Luxembourg and WSE regulations. Courts and regulators have not ruled the process unlawful yet.

From a governance and reputation standpoint

The delisting and squeeze-out will be remembered as heavy-handed, timed to a crisis, and unfriendly to minority investors—even if would be recognised by courts as entirely legal.

Strategically

The move may benefit Verevsky as an owner, but it comes at a high reputational cost for both Kernel and the broader Ukrainian investment landscape.

In global markets, perception often matters as much as law.

6. What Should Foreign Investors Take Away?

The Kernel case underscores a critical point:

When investing in Ukrainian companies—especially majority-controlled groups—financial statements are not enough. Investor security depends on understanding the character, incentives, and track record of the controlling shareholder.

This is where business intelligence and governance due diligence become indispensable.

A robust pre-investment review should assess:

• shareholder behaviour across past transactions;

• litigation history and corporate-governance patterns;

• regulatory relationships;

• ultimate-beneficial-owner structures;

• red-flag patterns such as related-party transactions or opaque restructurings.

In the Kernel’s case, sentiment among investors shows that even technically lawful actions can generate lasting reputational damage.

Conclusion

Kernel’s squeeze-out dispute is more than a disagreement between a majority owner and minority shareholders. It is a diagnostic moment revealing how fragile investor confidence can be—and how much corporate governance behaviour shapes Ukraine’s broader investment narrative.

As Ukraine prepares for unprecedented foreign capital inflows during reconstruction, maintaining global trust will be essential. Companies like Astarta, MHP, and Ferrexpo show that Ukrainian issuers can uphold international standards even under wartime pressure. Kernel, in contrast, has highlighted the risks when majority power is used aggressively.

For foreign funds, the lesson is clear:

Business intelligence is no longer optional—it is the foundation of safe investment in post-war Ukraine.

Entrypoint remains available to support investors with market intelligence, governance assessments, and risk advisory across Ukraine and the wider region.