Disqualification of a Shareholder
A shareholder may not vote in a matter at the general meeting where he/she is disqualified. Such matters include:
granting a discharge from liability for the shareholder himself/herself
an action against the shareholder himself/herself
discharge of the shareholder himself/herself from liability for damages
discharge of the shareholder himself/herself from liability in another matter towards the company
above mentioned matters concerning another person, if the shareholder is likely to derive an essential benefit in the matter and that benefit may be contrary to the interests of the company (e.g. a matter which concerns a family member of the shareholder or another company where he/she is for example a majority shareholder).
In addition to the above mentioned, a shareholder considered as a related party in a listed company may not vote on an agreement or legal action where he/she or a person in a related party relationship to him/her is one of the parties and the action is not a part of the company’s regular business activities or it’s not carried out in accordance with regular commercial terms. However, there are many exceptions to these disqualification grounds regarding listed companies, such as share issue and share issue authorization, distribution of funds, stock buyback and redemption as well as merger and demerger.
The disqualification grounds relate primarily to the direct personal benefit of the shareholder. It must be noted, that the disqualification grounds involve only the discharge from the liability and proceedings matters as well as freeing oneself from the obligations and they do not prevent the shareholder from voting in situations where the decision will derive significant benefit to the shareholder, such as making decision about the dividend and the merger consideration.
A disqualified shareholder may, regardless of the disqualification, be present at the meeting as well as participate otherwise in the consideration of the matter, e.g. by speaking and making proposals.
Disqualification is not taken into consideration if all shareholders in the company are disqualified, i.e. not only those that are participating in the meeting. The purpose of this provision is to render it possible to make necessary resolutions in the company even in the aforementioned situations. However, the disqualified shareholders do not need to be unanimous on the matter to be resolved upon.