On the 23 September, the Department of Enterprise, Trade and Employment (the DETE) published guidance on the Shareholders Rights (Directive 2007/36/EC) Regulations 2009 (the Regulations). The Regulations, which were passed into Irish law on 6 August 2009, set out a number of important provisions on the rights of shareholders in Irish-registered EU-listed companies.
The DETE guidance traces the key provisions of the Regulations and is broadly in line with our previous understanding and interpretation of the Regulations. However, the guidance does contain some additional points regarding the interpretation of certain of the provisions, and the reasoning behind some of the provisions, which may be of interest.
Perhaps, in our view, the most significant points to emerge from the guidance notes relate to the provisions regarding the notice period of EGMs. The Regulations provide that if companies wish to continue to hold EGMs on 14 days’ notice (which was previously the notice period for EGMs of many Irish companies, other than meetings for the passing of a special resolution), they must satisfy two conditions. Condition (a) is that the company must pass a special resolution at its next general meeting (and at every AGM thereafter) to the effect that EGMs can be held on 14 days notice and Condition (b) is that the company must provide the means for shareholders to vote electronically at meetings. A number of potential issues and concerns arise around these provisions and the DETE guidance deals with some of these:
In particular, it is not entirely clear whether it is sufficient to have passed the special resolution required to satisfy Condition (a) at a meeting held prior to the date of coming into force of the Regulations. The DETE guidance suggests that, contrary to the provisions of the equivalent UK regulations and the position adopted by a number of companies both in the UK and Ireland, this may not be sufficient and such a resolution would require to be passed at the first general meeting of the company after the introduction of the Regulations. We hope to raise this point with the DETE to obtain further clarification in relation to it.
As regards Condition (b), A&L Goodbody had urged the DETE to ensure that the term "voting by electronic means" was clearly defined in the Regulations, as it was open, in our view, to a number of meanings. We understood from both the DETE and UK's BERR (as was) that voting electronically by proxy was regarded as sufficient for the purposes of satisfying this Condition (b). However, the Regulations regrettably did not clarify that voting electronically by proxy is sufficient, thereby leaving the question somewhat open. Having said that, the DETE have helpfully clarified in their guidance that "voting by electronic means" is a wide-ranging term which can include voting electronically by proxy via a website authorised by the company. This should provide companies with some comfort on the point.