Self-Dealing by Controlling Shareholders: Improving Minority Protection in Light of Article 9 c SRD

Hallemeesch Nick ()
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Hallemeesch Nick: Ph.D. Candidate, University of Leuven; LL.M., Harvard Law School. This research was funded by the Belgian American Educational Foundation and the Harvard Law School Summer Academic Scholarship. I wish to thank Prof. Bernard Tilleman and Mr. Jarret Huang for their useful comments. All mistakes are mine. A related article on this topic has been published in Dutch: N. Hallemeesch, ‘Belangenconflicten van meerderheidsaandeelhouders. Zoektocht naar betere minderheidsbescherming vanuit rechtseconomisch en rechtsvergelijkend perspectief’ (2017) TRV-RPS 5-41.University of LeuvenHarvard Law SchoolLeuvenBelgium

European Company and Financial Law Review, 2018, vol. 15, issue 2, 197-235

Abstract: Controlling shareholders may cause a company to enter into transactions with themselves or one of their subsidiaries, thereby expropriating minority shareholders. General principles of company law, such as board autonomy, often do not adequately constrain controlling shareholders. Moreover, Belgian, French and Dutch courts apply deferential standards of review to related party transactions, while approval procedures in these jurisdictions are also flawed. A recent amendment to the Shareholder Rights Directive requires adequate protection of minority shareholders against self-dealing. Member States may subject related party transactions to a majority-of-minority vote, the approval of independent directors or judicial review. This paper discusses the efficiency of each of these mechanisms.

Date: 2018
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DOI: 10.1515/ecfr-2018-0008

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