Shareholders Can Block Sale of Crown Jewels

As a result of our battle against the allegedly fraudulent restructuring (read: "acquisition") by Trafigura of Nyrstar, minister of justice Vincent Van Quickenborne launches some legal initiatives at the suggestion of the FSMA. We see this as an important first step, and as a (partial) fulfillment of one of our key objectives, being the improvement of the protection of minority shareholders and companies in Belgium.

Belgium could further opt to become best in class for the protection of minority shareholders and our economic tissue, thus giving a strong signal to immoral/amoral investors that they are not welcome if they are not willing to abide by the principles of good governance, by taking measures such as:

• Expand the mandate of the FSMA by giving it real powers to proactively enforce compliance with the corporate governance legislation; the functioning of the Security Exchange Commission in the US could serve as an example;

• In case of serious allegations of fraud, ensure that an institutional body (FSMA?) takes on the defence of minority shareholders - and not the minority shareholders themselves at their own expense

• Drastically cut the period within which litigation has to be settled or decided (2 years?), and limit the possibilities to postpone and delay endlessly based on abuse of law

• Recalibrate and enforce the notion of "loyal litigation", whereby the inappropriate stalling of proceedings with the sole purpose of exhausting and demoralizing the weaker/smaller party is severely sanctioned and considered as a serious indication of guilt

• Allow FSMA to overrule or revoke the nomination of an independent director if such nomination primarily occurred due to the vote of the reference shareholder(s), in case of serious allegations that a conflict of interest exists

• Ensure that at least one board member has the Belgian nationality and resides in Belgium

• Increase personal liability for enablers (lawyers, experts, banks, advisors, PR experts and auditors) who contributed to the wrongdoing, either by the design, the implementation or the covering up of the legal and financial structure that was used to implement the fraude, and charge an institutional, non-corporatistic body with the duty to supervise, monitor and act on such matters. 

• In case of proven complicity by an enabler, prohibition for such enabler to participate in tenders for, or provide services to, the public sector for 10 years.

• Obligation for service providers to pro-actively inform the court or the FSMA in cases where there are serious suspicions of organized fraud with a waiver of professional secrecy

• Make the existing toolbox for minority shareholders (nomination of an expert panel or a provisional administrator) more efficient and effective in case of serious allegations of wrongdoing

• Prohibition for lawyers and law firms to take on the defense of fraudulent schemes they invented, advised on or implemented themselves

• Facilitate class action procedures

  
  

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