Page 166 - Albanian law on entrepreuners and companies - text with with commentary

ç) if he will be granted any new benefit.
(2) Where a shareholder is represented by a proxy, the proxy shall be deemed to be
in the same position regarding conflicts of interest as the shareholder he represents.

Comments:

1. The conflict of interest clause of Article 148 also applies to a controlling shareholder in
a group of companies, Article 207: he is not allowed to vote in case he is going to be released
from obligations, or if company claims against him are voted or if he would be granted any
new benefit. See also the Comments to the general rules on conflicts of interest of Article 13.

2. We should also mention in this context, that there is an ‘intrinsic’ limitation to each
voting right with respect to the fiduciary duties established by Article 14 (1). The vote must
be exercised in a way that is bona fide for the benefit of the company and the other
shareholders. That means above all that managers’ breach of duty may not simply be ratified
by the General Meeting. Such voting would be abusive according to Article 14 (1). See also
Comments to Directors’ fiduciary duties, after Article 98. It also means that if there are
disputes concerning fiduciary duties between shareholders there may be an issue of
transparency see Article 146 (2). Some resolutions are mandatorily by secret ballot if
shareholders representing at least five% of the company’s basic capital so request. If there is
an alleged breach of duty (see Article 14) it may be difficult to get information on voting
intentions of the shareholders because of the secret ballot provision in Article 146 (2).
However Articles 150 and 151 means that this risk is contained by the possibility to sue
management for breaches of duty. As well as this, the provisions on special investigations
allow some protections for minority shareholders creditors, see below including the
amendments of Article 151.

Article 149
Preferential Shares without Voting Rights
(1) In case of preferential shares without voting rights all the other rights
connected to the share are guaranteed.
(2) A decision of the General Meeting on cancelling, limiting or prejudicing the
preference requires the consent of the shareholder concerned.
(3) Shareholders representing more than a half of the par value of the preferential
shares shall decide on the consent referred to in paragraph 2 during a special meeting.
The special decision requires at least a three-quarter majority of the preferential
shareholders attending the special meeting. The Statute may neither change this
majority requirement nor request other requirements to be observed.
(4) If the preference is cancelled, the shares concerned shall be granted voting
rights.

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