A week before Christmas, two general meetings provide investors with something of an early gift: after years of governance debacles and disappearing value, at least they’ll (probably) never have to hear about Bumi plc or Eurasian Natural Resources Corporations plc (“ENRC”) again. However, investors will have to wait until next year for new protections these companies helped inspire to take effect.
ENRC is going private, delisting, and adopting a new set of articles that, to our knowledge, it hasn’t bothered to disclose. Bumi will still be around; however it is seeking approval to change its name to Asia Resource Minerals plc, along with a transaction that would provide an exit for the founding Bakrie family and increase Samir Tan’s interest to over 47%.
Events at ENRC and Bumi largely instigated the Financial Conduct Authority’s proposed amplification of minority shareholder rights at premium listed companies; currently under consultation, they won’t take effect until next year. Primary measures would require a disclosed relationship agreement for 30% or greater shareholders, and provide independent shareholders with a separate vote on both independent director elections and delisting. In addition, the FCA is proposing to target convoluted share structures, increase disclosure requirements, and revise its guidance on what constitutes an independent business in practice.
While focused on minority shareholder protections, the current consultation’s brief extends to the whole listing regime, and in some cases the reforms could spill over to non-controlled companies. While the current proposals would limit the required disclosure of any existing or previous relationships or agreements between independent directors and the company, its directors or controlling shareholders to controlled-issuers, the FCA is seeking input on tying that standard to the premium listing for all issuers. Other questions focus on the proposed measures, their terms of implementation, and related revisions to the listing rules; interested parties are invited to respond by February 5, 2014.