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Different from TCC art. 379 (the share transfers and pledges
exceeding ten percent of the capital), TCC art. 380 does not foresee
any threshold with respect to the amount of shares to be acquired. The
ban shall be valid regardless of the amount of shares acquired by the
third party that is financed by the target company. In addition, in order
to apply this provision, the transaction should be concluded with a
third party. The term “third party” is interpreted broadly, and includes
the shareholders, the persons in management, and the board of direc-
tors, as well.
The legal consequence of the violation of art. 380 of the TCC is
that the financial assistance transaction is rendered void. Where finan-
cial assistance is concerned, there are two transactions - one being the
acquisition of the shares, and the other one being the financial assis-
tance for the payment of the share price. When the purpose of the ban
is considered, it may be concluded that the voided transaction is the
financial assistance. The validity of the share purchase transaction is
dependent of its own conditions and is not affected by this ban.
Furthermore, art. 385 of the New TCC foresees the obligation of the
disposing of shares purchased in violation of articles 379. 380 and 381
that govern company share buybacks, rather than rendering such trans-
actions invalid (void). This wording is inclined to be interpreted that
share purchases, which are in violation of art. 380, may be realized.
Therefore, the only transaction that is invalid is the financing transaction.
The doctrine differentiates between the consequences of the finan-
cial assistance ban with respect to the promissory transactions and dis-
posal transactions. The dominant view accepts that only promissory
transactions are invalid and that disposal transactions are valid.
However, even if the validity of disposal transactions are accepted, the
action performed is required to be returned. For instance, if the com-
pany became a guarantor to a bank credit obtained in order for its
shares to be purchased by a third party, this guarantee agreement would
be invalid, and the responsibility of the company may not be claimed.
Exceptions to the Financial Assistance Ban
TCC Art. 380 provides two exceptions to the financial assistance
ban. The first exception governs the day-to-day transactions that are
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NEWSLETTER 2015