Securing Regulatory Approval for a Complex Shareholder Transaction

How Preventive Due Diligence Saves Clients Hundreds of Thousands of Euros

Country: 🇱🇹 Lithuania

‍The Client:

Our client is a leading name in the European FinTech sector. As a licensed Electronic Money Institution (EMI), they manage an annual turnover of approximately €1 billion. They navigate the market successfully, operating within a highly diligent regulatory environment. For them, meticulous compliance is a constant, high-stakes reality.

The Challenge:

It all began with what seemed like a simple internal matter. A member of their board of directors wished to acquire a small, minority stake of less than 10% in the company. In most contexts, this would be a straightforward transaction. But due to the specific requirements of Lithuania’s regulatory landscape, this required careful navigation. The law demanded a full review by the Bank of Lithuania to scrutinize the deal for any potential “conflict of interest” or “significant influence.”

This presented a huge risk. The market is littered with cautionary tales of companies that rush forward, pay a non-refundable deposit (often a six-figure sum representing 20-30% of a multi-million Euro valuation) only to have their application rejected. Our client was facing the same dangerous gamble, with a substantial amount of money hanging in the balance.

The Solution:

Instead of rushing into the fire, we treated the situation like a game of chess. Our philosophy is that you must understand the entire board before making your first move. Rather than just filing an application, we initiated our signature Preventive Due Diligence (Pre-DD). This involved a deep dive into the regulator’s mindset, anticipating their every concern about influence and independence.

Armed with this insight, we built a fortress of an argument. We crafted a comprehensive legal case for the Bank of Lithuania that proved three key points:

The board member’s minority stake would be insignificant compared to other shareholders, making “significant influence” impossible.
Robust governance structures were already in place to neutralize any potential conflict of interest.
The transaction would have zero material impact on the company’s operations or decision-making.
Simultaneously, we acted as project managers, navigating the client’s own complex internal hierarchy to ensure the process moved forward smoothly, preventing delays that could have jeopardized the entire deal.

The Result:

With our strategic case submitted, the outcome was no longer a gamble. The Bank of Lithuania issued a positive decision, fully accepting our position and authorizing the transaction.

This victory was more than just an approval; it was a complete validation of our strategic approach.

• Financial Risk Eliminated: The client completely avoided the six-figure trap of a non-refundable deposit because we had ensured a high probability of success before any money was on the line.
• Clarity and Confidence: Instead of a stressful, uncertain process, the client moved forward with a clear, methodical plan, confident at every step of the way.
• A Solidified Partnership: By transforming a high-risk situation into a controlled and successful outcome, we reaffirmed our role as trusted strategic partners. It’s a testament to our core belief: the best way to win a tough game is to see the entire board before making the first move.