How to defend against a mythical attack Article 6 of the PCCC

A public company received a request from a shareholder (the former President of this company) holding more than 1/20 of the company’s share capital to supplement the agenda of the company’s forthcoming Extraordinary General Meeting with, inter alia, the adoption of resolutions on changes to the Supervisory Board of the shelf. Immediately thereafter, the largest shareholders of the company received an enquiry from this shareholder as to whether they have a relationship of domination or dependence with a certain commercial company that is also a shareholder of this company

This would seem to be a minor question. Nevertheless, until this question is answered, a shareholder that is a commercial company – pursuant to Article 6 § 5 of the PCCC – may not exercise the rights attached to the shares, including the right to vote. In addition, this question must be answered within 10 days from the date of receipt of the request, but no later than two weeks before the date on which the next general meeting is convened. If a shareholder does not manage to answer the question within the deadline referred to above, then pursuant to Article 6 § 5 of PCCC the deadline for answering the question shall not start running until after the general meeting, and at the next general meeting the shareholder who has been asked such a question may not exercise the right to vote.
One of the shareholders who has received such a question, realising the seriousness of the situation, has immediately sent a reply to the shareholder, to the correspondence address indicated by the shareholder in the question and to the proxy of that shareholder. It turned out that the correspondence address is not where the inquiring shareholder lives, but his mother, who refuses to accept the reply. The shareholder’s attorney also evaded accepting the answer. Such actions unequivocally confirmed that the shareholder’s aim was not to obtain an answer to the question at all, but to suspend the rights of the largest shareholders so that, at the next meeting, this shareholder would appoint its board of directors and hostile takeover of the company.
Therefore, the shareholder who had been asked the question and who had seen the behaviour of the shareholder who had sent such a question requested that the company publish the answer to the shareholder’s question in a current report pursuant to Article 6 of the PCCC. The company complied with this request. The Company also published the response of another shareholder who was asked the question in the same manner. Afterwards, almost 10 proxies of the shareholder who sent this question appeared at the meeting and none of them even invoked the suspension of the voting rights of the largest shareholders under Article 6 of the PCCC. These proxies at the meeting attempted – unsuccessfully – to hostilely take over the company by other means, but this will be discussed in more detail in other posts.
It is worth remembering the proverbial ‘six’ especially now that the hectic period of assemblies is beginning.