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Ministry of Justice Proposes Information Access Limit for Minority Shareholders

28.03.2016 13:16 / Rossiiskaya gazeta

Minority shareholders' access to company information may be limited. A bill of amendments to the Joint-Stock Companies Act and Limited Liability Companies Act has been drafted by the Ministry of Justice and published online.

Any shareholder can access the charter, the books, registration, license etc. However, other company documents are available only to 2%-plus owners, only with substantial business grounds for the information request. The limit is introduced for public company shareholders. In limited liability companies, full information is available to any shareholder.

The bill introduces a shareholding limit (over 25%), whereupon the shareholder can not be denied access to information. The bill limits access to business information and financial data to minority shareholders, who own a minimum stake, often in order to be granted access to company information.

The Ministry of Justice states that the need for limits is founded on growing misconduct by shareholders who do not have a material interest in successful business results. The Ministry also cites uncontrollable distribution of confidential business information.

The bill memo points out that corporate control is effected through a number of mechanisms (supervisory board, audit committee, mandatory audit). Therefore, the Ministry of Justice described shareholder control as 'excessive'.

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