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NEWSLETTER 2011
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acquisition or disposal of shares at the percentages stated above should
be indicated in the annual activity and audit reports under a separate title
and should be announced in the website of the company.
As a requirement of transparency principle of good corporate
governance an obligation to disclose information imposed on the board
of director’s members and other executives of the both entities; enterprise
and the controlled company.
According to art. 198 of NCC, all rights including the voting rights
attached to the relevant shares will be ceased unless and until the
registration and announcement obligation is satisfied.
Reporting Obligations, Right of Information and Special Audit
The reporting obligations and right to obtain information regarding
the inter-company relations among dominant company, subsidiary
company and other group companies are regulated under art. 199 and
200 of NCC. In general, these articles set forth reporting obligations on
the subsidiary company’s board of directors to the controlling company
which will allow the controlling company, the right to obtain information
as to the operations and performance of independent companies thus
rendering the parent company to evaluate the loss and profit accounts and
overall financial standing of the subsidiary companies.
Furthermore, as per art. 207 of NCC, subsidiary company’s
shareholders have the right of claim before the court for appointment
of a special auditor in certain situations according to the opinions of the
auditors and special committees.
Abuse of Dominance and the Consequences thereof
Art. 202 of NCC regulates abuse of control by the dominant company
in two major categories as; firstly, by means of the transactions performed
by the board and secondly by means of an important decision taken by the
general assembly. Such abuse inflicts the liability on the dominant company.
Apart from the above reasons, the dominant company has also a
liability arising out of trust which was created within the community by
virtue of positive reputation, is regulated with art. 209 of NCC.