Imagine that you are a minority shareholder in a major Russian company (R). You attend the annual general meeting (AGM) only to discover that the controlling shareholder, another company (S), has authorized a massive issue of additional shares – something that was not mentioned even in passing in the notice of the AGM. These additional shares can be placed at the sole discretion of the board. The board is at liberty to place them with corporate insiders or a dominant shareholder such as S at below-market prices and without being subject to any rights of pre-emption (proportional allotment to existing shareholders).
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