Shareholders in a public company, whose holdings are less than 5%, requested to review the voting papers at the company’s general meeting, at which a management agreement with the company’s controlling shareholder was approved, after the Securities Authority claimed that it was not approved as required by law.
The court accepted the claim and allowed the review. The law states that a holder of 5% of all voting rights in the company, minus those of the controlling shareholder, is automatically granted the right to review the voting papers. The considerations that must be considered in examining a request for review are the extent of the holdings of the person requesting the review, the degree of materiality of the decision, the degree of involvement of the controlling shareholder in the vote and the extent of his influence on the company and its ability to supervise the voting process, and other circumstances that depend on the case. Here, we are dealing with a decision of fateful significance and the controlling shareholder has the ability to receive information and act to achieve the required majority and to stay in touch with those opposed to the decision. This is also an exceptional case in which the Securities Authority found it appropriate to intervene and therefore the shareholders have the right to review the voting papers.
Published in Legal Channel 433 19.02.2025 Afik & Co. https://he.afiklaw.com/
To read the verdict, Tel Aviv District Court (Tel Aviv) 52687-10-23 The Estate of the Deceased Alfred Mann v. Taoza Fairchild Technology Ventures Ltd.
