14.5.2020

General Meetings in Empty Halls

This spring will see the first ever general meetings held by listed companies without a single shareholder or shareholder’s representative, proxy or assistant being present. A temporary act entered into force in Finland at the start of May (Act 290/2020) allows listed companies to, in practice, prevent shareholders or their representatives from attending general meetings in person.

Remote Participation or Proxy Participation – Or Both

Under the temporary act, listed companies can organise their general meetings solely through remote participation in such a way that ‘shareholders can exercise their rights in the general meeting in the manner provided for in chapter 5(16)(2) of the Limited Liability Companies Act only by post, telecommunication link or other technological means’. It seems most likely that this kind of remote participation will be organised through advance voting in which the votes are collected either through an online service or an advance voting form. If so, it is worth paying particular attention to the clarity of the voting form and the instructions for advance voting.

A second exceptional alternative offered by the temporary act is for shareholders to exercise their rights at the general meeting solely through a proxy representative. In this alternative, shareholders are always entitled to pick their own proxies, and the company cannot obligate shareholders to use a proxy appointed by the company. This means that the number of people present at the meeting cannot be entirely controlled.

In many of the cases where the new alternatives provided by the temporary act will be used, it is likely that the more common option will be remote participation or a combination of the two alternatives so that proxy representative are only allowed to participate remotely.

Shareholder Rights Must be Secured in Advance

Using the new alternatives provided by the temporary act requires that shareholders are able to exercise their rights to ask questions and make proposals before the meeting. After publishing the notice convening the general meeting, shareholders must be given a few days to make counterproposals. Counterproposals must be put to a vote if the shareholder making the counterproposal holds more than one one-hundredth of the shares in the company. A separate deadline must be set for submitting other counterproposals and shareholder questions. Other counterproposals, shareholder questions and the management’s responses to questions must be published prior to the end of advance voting or the general meeting.

It is worth noting that in all items where there is only one proposed resolution, the voting options must be yes or no. This also applies to the election of the board of directors and other similar resolutions that normally cannot be opposed without submitting a counterproposal. This being the case, it is important that companies make sure that at least the key proposals have sufficient support amongst the shareholders prior to the meeting. If not, the company risks winding up in a situation in which no resolution is made and a new general meeting may have to be convened.

In addition to listed companies, many of the options provided by the temporary act are also available to First North companies, i.e. companies who have issued shares that are traded on a multilateral trading facility.

Traditional General Meetings Also Possible

The above new forms of general meeting have already been used by many companies. Processing counterproposals and advance questions does, of course, cause a fair amount of work for the company, but a great deal of work is saved due to not having to take precautionary measures at the meeting venue to avoid infection.

Despite the temporary act, it is still possible for listed companies and First North companies to organise ‘traditional’ general meetings. As mentioned above, this does require that arrangements be made to account for the coronavirus situation.

In addition to the special arrangements it makes available to listed companies and First North companies, the temporary act also allows companies to postpone their general meetings to the end of September, regardless of the deadlines set by the Limited Liability Companies Act or their articles of association. The temporary act also extends the deadline for completing financial statements to the end of June.

Latest references

We act as the lead legal counsel in the groundbreaking case of Multitude SE’s (Multitude) proposed relocation from Finland to Switzerland. The first phase of the relocation, involving the transfer of Multitude’s registered office from Finland to Malta pursuant to SE Regulation, was successfully completed on 30 June 2024. In this connection, Multitude’s shares were removed from the Finnish book-entry system and the issuer central securities depository of the shares changed from Euroclear Finland Oy to the CSD operated by the Malta Stock Exchange. In practice, all of Multitude’s shares are now held through Clearstream. In Malta, the company is anticipated to be converted into a public limited liability company under Maltese law, following which it will seek redomiciliation from Malta to Switzerland. Given that Finnish legislation does not allow for direct relocation to a non-European Economic Area country such as Switzerland while preserving the company’s legal personality, the process necessitated a multi-jurisdictional strategy as outlined above. Our mandate encompasses advising Multitude on all aspects governed by Finnish law concerning the proposed relocation and coordinating the work of local legal counsel and various other advisors involved in the project. The process also involved a written procedure to amend Multitude’s existing subordinated capital notes and senior bonds to facilitate the relocation as well as placement of EUR 80 million senior guaranteed notes by a newly established Multitude Capital Oyj. ”The transfer to Malta marks a significant step in Multitude’s journey. This pioneering and complex process has been successfully implemented with the invaluable support of our own team and advisors. Castrén & Snellman has masterfully orchestrated the entire project, ensuring seamless coordination across multiple jurisdictions. We look forward to achieving our next step with the further relocation to Switzerland”, says Jorma Jokela, Multitude’s CEO. Multitude is a fully regulated growth platform for financial technology, employing over 700 individuals across 25 countries. Its shares are listed on the regulated market (Prime Standard) of the Frankfurt Stock Exchange.
Case published 1.7.2024
We advise Evli, a leading Nordic investment and wealth management company, in a strategic partnership with Bregal Milestone. The objective of the strategic partnership is to grow the business of Evli Alexander Incentives Oy. In connection with the strategic partnership and to reflect its new vision and strategy, Evli Alexander Incentives Oy will be rebranded to Allshares Oy. As part of the partnership arrangement Bregal Milestone has agreed to invest over EUR 65 million in Allshares to acquire shares owned by certain minority shareholders and to fund future organic and inorganic growth in the company. Following completion of the arrangement, Bregal Milestone will own 55 percent of the shares and votes in Allshares, Evli Plc will own 42 percent, and Allshares’ management will own the remaining 3 percent. The arrangement will mark a significant strategic and financial partnership for Evli Plc and is expected to increase the value of Evli Plc’s ownership in Allshares over a longer period. ‘We are very excited to partner with Bregal Milestone, who shares our vision of becoming the leading provider of share-based incentive and compensation plan management and design in Europe and beyond. With their support, we will be able to accelerate our growth, invest in our platform, and enter new markets. We believe that this partnership will create significant value for our clients, employees, and shareholders,’ Maunu Lehtimäki, CEO of Evli comments. Bregal Milestone is a leading European growth private equity firm and enjoys a strong track record in scaling Nordic champions across Europe via organic and inorganic growth. Bregal Milestone will bring strategic guidance, operational support, financial resources, and access to its deep network of partners and contacts to accelerate organic and inorganic growth of Allshares.
Case published 7.3.2024
We advised SATO Corporation and lead manager Skandinaviska Enskilda Banken AB (publ) Helsinki Branch in a rights issue. SATO received gross proceeds of approximately EUR 200 million from the issue. SATO Corporation is an expert in sustainable rental housing and one of Finland’s largest rental housing providers. SATO owns around 25,000 rental homes in the Helsinki Metropolitan Area, Tampere and Turku. Approximately 45,000 residents live in SATOhomes.
Case published 29.2.2024
We advised Oomi Oy in a partial demerger where Oomi’s solar power business for corporate customers demerged and formed a new independent company, Oomi Solar Oy. As part of the partial demerger process, we assisted Oomi in pre-emptive discussions with the tax authorities where the tax treatment of the restructuring was confirmed. Oomi Solar, the demerged company, focuses on implementing solar power plants for real estate properties, ground-level solar power plants and industrial solar power parks and supports companies and entities in their transition towards renewable energy. Oomi Solar started operations on 1 January 2024.
Case published 12.2.2024