SHAREHOLDER RIGHTS TO INFORMATION IN CORPORATE GROUPS
I. INTRODUCTION
Recently, the High Court passed appellate judgement number 324/2012 of 21st May, which clearly establishes the information it understands should be provided to a company, in this case the Banco Santander Central Hispano S.A., (BSCH), regarding the companies in which it has shares with the purpose of not infringing upon shareholder rights to information.
II. INFORMATION FACILITATED BY CORPORATE GROUPS
This judgement evaluates the information to which company shareholders have the right to access regarding companies in which it has shares, and in particular whether the right of the shareholder to obtain “documental information”– which not only has an instrumental purpose in relation to voting rights – to include the balance sheet, profit and loss accounts, annual report and any other documents which form a part of the respective annual accounts included in the consolidation.
The shareholder in question claimed the balance sheet, profit and loss accounts, annual report and further documents forming an integral part of the annual accounts from the BSCH, such as the auditing report of the instrumental companies before the Ordinary General Meeting of the Bank. Said petition was denied using the argument that said information is not included in the information to which the Bank had a right to access as shareholder. The intention of the shareholder was to demonstrate the strange accounting circumstances arising in the instrumental companies of the Bank in the absence of an explanation from the BSCH in this respect.
The petition was based upon the infringement of the right to information set forth in article 112 of the now obsolete Joint Stock Company Act, infringed in this case for not having received replies with the necessary precision and transparency.
The plaintiff understood that the companies in question, being instrumental companies created by the Board of Directors and subject only to the control thereof, they should be subject to the control of the General Meeting avoiding a lack of transparency and uncertain situations for shareholders.
III. CONCLUSION
The judgement concludes that the right to information in corporate groups does not attribute the shareholders with the right to obtain the documentation of each of the companies forming part of the group given that it is the documentation of the corporate group and not the individual companies that undergoes approval, according to article 42.5 of the Commercial Code “documents subject to the approval of the General meeting, likewise the Management report and the auditor’s report”.
Consequently the appeal was rejected confirming that the right to information does not correspond simply to the right to obtain any type of documentation, and, more precisely, to obtain the annual accounts of the company which, although integrated in the group, are not subject to approval.
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