Infocenter

The Central Bank came out for depriving the minority stakeholders’ right to request additional information from the Issuer . The regulator explains that a shareholder shall not perform auditing functions in the company. In order to compensate the right for request the Central Bank proposes to expand the information the Issuer is obliged to disclose to issuers. Lawyers are uptight that limitation of minority stakeholders’ right to request additional information from the company may deprive the possibility to make the top management accountable for abusing their rights.

Minority stakeholders’ response was predictable. “Shareholders' interests are again infringed. It is especially offensive because the Central Bank makes this propose though it has promised during FCSM acquisitions procedure that protection of shareholders’ interests is a priority”, - says Denis Spirin, Corporate Management Director of Prosperity Capital being a minority stakeholder of generating and power grid companies. He states that there is no big problem due to minority stakeholders abuse of their right for access to information, but it is magnified by issuers.

Company issuers have a contrary opinion. The Head of Corporate Practice of Pavlova&Partners law firm Artem Vasilevich representing interests of Kirovsky Plant Director believes that the Central Bank’s idea is quite right: “This will simplify the life of joint stock companies and allow to prevent cases when shareholders constant requests make it difficult for companies to operate”. And the penalty rates for failure to present the information are significant - 500-700 thousand roubles”, he reminds.

Mr. Vasilevich believes that the limitations proposed by the Central Bank will not deal with the main company documents. “Article of Associations, minutes of board meetings and general shareholders meetings will be accessible for minority stakeholders, it’s likely that their right for insignificant information will be deprived”, he says. However, Mr. Shvetsov gave no definite answer to this question yesterday.