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The importance of protecting shareholders’ interests and the link to investor confidence.

The importance of protecting shareholders’ interests and the link to investor confidence. . Prof. Eddy Wymeersch Former Chairman of the Committee of European Securities Regulators. Shareholders have to be protected. Which shareholders ?

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The importance of protecting shareholders’ interests and the link to investor confidence.

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  1. The importance of protecting shareholders’ interests and the link to investor confidence. Prof. Eddy Wymeersch FormerChairman of the Committee of EuropeanSecurities Regulators

  2. Shareholders have to be protected • Which shareholders ? • minority, public investors, foreign investors and institutionals • Applies in all companies • Why protect? • Respect for property right • Safeguarding confidence and insure financing • How insure this protection • Disclosures • about the company, its financial statement, recent events • about the ownership structure • about decisions to be made, e.g. nomination to board

  3. Specific protection mechanisms • Abuse of majority rights – oppression in case law • very general – difficult to apply • Statutory Right to leave the company in case of abuse • Take over the shares of the other party, or be bought over • Mandatory bid in case of acquisition of control(at 1/3rd level- at which price) • Conflicts of interest with shareholders, corporate opportunities • Related party transactions in accounting treatment • prevention, indemnity, liability, annulation

  4. Specific protection mechanisms • Major transactions to be approved by agm In fact change of corporate identity • Parent subsidiary relations • What are the limits of instruction powers by parents • Can or must subsidiaries refuse? • What about personal liability of subsidiary directors • Which rules for group support • What in the pre-bankruptcy phase • Solutions is some jurisdictions

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