2023-07-19 23:00:44
The federal government wants to strengthen the rules relating to the sale of major assets and corporate governance in publicly traded companies.
Companies cannot no longer sell whole sections of their assets behind the backs of their (minority) shareholders. The Minister of Justice, Vincent Van Quickenborne (Open VLD), has prepared a bill aimed at avoiding a new “Nyrstar affair”, named following this zinc company.
Only the shareholders of a listed company will be able to approve the transfer of three quarters or more of the assets.
As a reminder, Nyrstar had been acquired by the commodities giant Trafigura, which then transferred almost all of the assets of the acquired company, listed on the stock exchange, to NN2, a separate company, for a symbolic 1 euro. Nyrstar thus became a de facto empty shell, except for cash. The minority shareholders had expressed their strong dissatisfaction with this legal hold-up. They have been contesting this operation for years.
Approval by at least 50% of shareholders
In order to make such situations impossible in the future, Vincent Van Quickenborne presents this Thursday to the Council of Ministers a bill providing that only the shareholders of a company listed on the stock exchange can approve the transfer of three quarters or more of the assets – read: the crown jewels. Until now, only the board of directors might decide. In the UK and France, the rules are even stricter. As soon as the operation concerns respectively 25% and 50% of the assets, the company is required to ask the shareholders for their agreement.
In Belgium, such a transfer operation will soon – if the bill is approved by Parliament – be approved by at least 50% of the shareholders. If the company’s board of directors ignores this obligatory passage by the general meeting of shareholders, the transaction concerned may be invalidated. “It’s a risk a publicly traded company won’t want to take, given the damage to its reputation and the cost of canceling the deal.“, we say to the office of the Minister of Justice.
Independent directors
Alongside these new provisions, the draft law – drawn up on the basis of the recommendations of the stock market supervisory authority FSMA – also strengthens certain rules relating to corporate governance.
For example, the requirement of three independent directors for listed companies will now be enshrined in law. Until now, this was only a recommendation of the corporate governance code. Companies that did not comply with the rules had to explain the reasons in their annual reports. But most companies listed on the Brussels Stock Exchange already have three independent directors.
Persons with convictions – money laundering, bribery, insider trading, etc. – may no longer be directors of listed companies.
The project also plans to tighten the assessment of (candidate-)directors of listed companies. Reinforced control already exists for managers and directors of the financial sector. They must go through a selection process and be declared “fit & proper” by the supervisory authorities (the National Bank and the European Central Bank). In recent years, this “fit & proper” profile requirement has influenced changes in management and chairman at Degroof Petercam and Belfius.
From now on, people who have been the subject of convictions – money laundering, corruption, insider trading, etc. – may no longer be directors of listed companies.
No administrative sanction is foreseen in the event of non-compliance with these new provisions. It will be up to the shareholder who wishes to sue a company for this reason to go to court.
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