Page 205 - Albanian law on entrepreuners and companies - text with with commentary

definitely not to penalize a parent managing the subsidiary continuously (as part of a
group). Nor is it taken for granted that the management of the parent would
automatically disrespect the interests of the subsidiary. The concept applied here is
simply that ‘external management’ must go hand-in-hand with protection and
guarantee devices created for the company ‘as a whole’ (compensation of losses), its
shareholders (sell-out rights) and creditors (right to claim security).

b) This is where the second form of group relationships comes in. The Fourth
Directive 78/660/EEC on companies’ annual accounts and (Article 1 of the Seventh
Directive 83/349/EEC on consolidated (group) accounts use a group concept which
the new Company Law loosely follows in its definition of ‘equity groups’, Article
207 (2). Thresholds are, however, loosely referring to the standards introduced by
the Takeover Directive 2004/25/EC and its transposition in some Member States
(like Germany 181 ): Article 207 (2) requires for an equity group relationship that,
based on its capital share or on agreement, the parent company has the right to
appoint at least 30% of members of the subsidiary’s Board of Directors or
Supervisory Board or of the Managing Directors, or if the parent has at least 30% of
votes at the subsidiary’s General Meeting. In such an equity group, the continuous
management of the subsidiary (and the group) is not taken for granted. It is,
however, quite likely that an accumulation of both forms occurs. A company which
has what is usually called a ‘controlling share’ of 30% of votes is quite likely to
direct the subsidiary through continuous instructions. However, it is not the parent
company’s ‘strict’ responsibility that the Law is aiming at in the second case. With
the equity group construction, the Law recognizes the possibility of the parent
exercising any kind of influence in the subsidiary and the group; or rather, it takes
for granted that the business policies of the parent will somehow involve each
subsidiary and the group as a whole. This is what can be expected from a reasonable
group management. It may also result in letting the subsidiaries act as (rather)
independent profit centres. The Law opens up to the entire complexity of group
relations here. It recognizes that they are determined by business strategies which
the parent’s management develops. The Law, therefore, establishes a specific
‘behavioural standard’ or ‘standard of trust’ for the parent’s representative, that is a
triple set of fiduciary duties which brings together a triple set of interests in the
group in order to avoid any internal or external negative effects. According to
Article 209 (1), these interests and corresponding duties are:

 the fiduciary duties of the parent’s representative bound to realize the interests
of the parent company. They derive from the general fiduciary duties
established by Articles 14 to 18 and by the special duties of loyalty, care and
skill required from the management by Articles 98 and 163;

149, p. 10 et seq).
181 See Paragraph 29 (2) of the ‘Wertpapiererwerbs- und Übernahmegesetz (WpÜg) of 2001.
204