Corporate Law

 

Mandatory Offer

On 14 June 2012 the President signed Federal Law No. 77-FZ “On Amending Article 84.2 of the Federal Law On Joint Stock Companies’.”

According to Article 84.2 of the JSC Law, if a person together with its affiliated persons owns more than 30 percent of a company’s shares, this person must make a mandatory offer to the other shareholders of the company to buy out their shares. Para 8 of the Article provides for the exceptions from to rule. This rule has now been supplemented with the below provision.

A mandatory offer doesn’t have to be made if the title to shares is transferred (i) from the Russian Federation to its constituent entity or municipality; (ii) from the constituent entity to the Russian Federation or municipality; and (iii) from the municipality to the Russian Federation or its constituent entity.

The Law entered into force on 26 June 2012.

General Shareholders’ Meeting

On 2 February 2012 the Federal Service for Financial Markets (“FSFM”) issued Order No. 12-6/pz-n approving the Regulation on additional requirements for the procedure of preparing, convening and conduct general shareholders meetings.

The Order was registered with the Ministry of Justice on 28 May 2012.

The Regulation applies to annual and extraordinary shareholders meetings in all closed and open joint stock companies in Russia, conducted either in the form of a meeting or absentee voting. It does not apply to companies where all voting shares belong to a single shareholder.

In particular, the Order (i) specifies the procedure for defining the dates when the offer to the agenda of the general meeting have been sent and received, and the date when the demand to conduct an extraordinary general meeting has been received; (ii) provides that the offer nominating a candidate, in particular, to the company’s board of directors and its executive body is to include information on such candidate’s consent (if the company’s charter or other internal regulations require such consent); and (iii) regulates the requirements on voting by shares which are circulated outside the Russian Federation as depository securities.

The Order envisages that, among other things, when the shareholders are to vote on the reorganization of the company, they are to be provided with (i) the draft decision on division, spin-off or reorganization, or the agreement (its draft) on merger or accession, and (ii) the draft transfer deed (divided balance sheet). Further, when defining the quorum of the general meeting, the shares are not taken into account if they, among other things, (i) had been redeemed after the list of participants of the meeting was approved and before the general meeting was conducted, and (ii) belong to the same person and exceed limitations set out by the company’s charter.

The Order further stipulates that the minutes of the general meeting and the minutes of the voting results are to be compiled after the general meeting. If the general meeting’s decisions and the voting results had not been announced, the report on the voting results is to be compiled. The Order defines the information that needs to be included.

The Order will enter into force six months after the date of its official publication and replace FCFM Resolutions No. 17/ps of 31 May 2002 and No. 03-8/ps of 7 February 2003 on the same matter.

For further information please contact Igor Ostapets or Irina Dmitrieva in the Moscow office of White & Case, tel + 7 495 787 3000 .

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