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CAPITAL MARKETS LAW
209
The CMB no longer determines dividend ratios. Public companies
may distribute profit in accordance with the profit distribution policies
as determined by their general assemblies. The CMB may, however,
determine that different principles shall be applied to certain companies
and certain sectors, as per Article 19 of the Law.
A separate provision with regard to prohibition on the hidden income
(income shifting) has been added to the Law (art. 6).
The Law defines which transactions are regarded as being of an
important nature for public companies and authorizes the CMB to
determine the principles and procedures to be applied to such transactions,
as well as the sanctions to be imposed in case of noncompliance.
Article 24 of the Law provides for the “
right to exit
”. This right allows
shareholders who attend general assembly meetings where resolutions
regarding transactions of an important nature are taken, and who vote
against such resolutions, to exercise the right to sell.
A shareholder’s voting rights shall be frozen where they are in
noncompliance with the mandatory call obligation pursuant to Article 26
of the Law.
Art. 27 of the Law addresses takeover bids. Known as the “
squeeze-
out right
”, this right arises in cases where a shareholder reaches a certain
threshold of shares, to be determined by the CMB. Having reached the
required threshold, such a shareholder may exercise his right to purchase
the shares of or “squeeze-out” minority shareholders by paying them fair
compensation for their shares.
The Law gives the CMB the authority to terminate the privileges
related to voting rights and representation on the board of directors in
public companies who show losses for 5 consecutive financial years,
pursuant to their financial statements. However, pursuant to Article 28 of
the Law, this provision shall not apply to the privileges of state institutions
and organizations.
In line with corporate governance principles, the Law holds that
the general assembly shall be convened to meet as determined in the
articles of association and by announcements made on the Company’s
website, Public Disclosure Platform and/or other places as determined