Campus

Fighting for shareholders’ rights

One of the items in its stock exchange Schwarzbuch or black-book is causing some concern to the Schutzgemeinschaft der Kapitalanleger (SdK), namely the extent to which the political clout of lobbyists is having an adverse effect on the political rights of minority shareholders. The Schwarzbuch, published on December 21 pointed out inter alia that in cases of Spruchverfahren (procedures of compensation or settlement provided for by German company law to defend minority shareholders) or compensation in the form of cash, shareholders’ rights can be legally overruled. The most recent broadside was instigated by the chairman of Deutscher Anwaltsverein (German Association of lawyers) who wanted to curtail Spruchverfahren to a single case at Oberlandesgericht (Appeal Court) level. This, according to the SdK, shows how important it is for shareholders’ representatives to keep their eyes peeled in future. If the Appeal Court were to become the one and only tribunal, it would rule out any chance of a shareholder bringing a case of settlement to a court of second instance. In addition to individual negative examples, the Schwarzbuch also describes how changing segments within Entry Standard or on the non-official market can be disadvantageous to shareholders in juridical terms. Companies changing to the unofficial market could later abandon it without the obligation to present any kind of compensatory offer in cash. Added to that, recent rulings handed down by the Federal Constitutional Court overturn a judgment by the Federal Court on November 25, 2002 concerning shareholders’ rights of ownership (the so-called Macrotron ruling). SdK feels that the fact that the Federal Court accepted the Constitutional Court ruling without comment is in itself a danger sign. Furthermore, the Schwarzbuch also sheds light on the enormous risks incurred in PMI bonds and CFDs, and recommends taking the greatest care with Chinese listings.

Investing and human resources: Small and Mid-sized companies prepare

According to a survey conducted by DZ Bank, WGZ Bank and the Bundesverband der Volksbanken und Raiffeisenbanken (BVR) more than 80% of German small- to mid-sized companies this year intend investing in themselves. Furthermore, slightly fewer than 29% intend increasing the amount invested in the second half of 2013. The combination of market optimism and low interest rates has generated the highest integers of the last 13 years that indicate the intention to invest. The average proportion of equity capital of small- to mid-size companies that emerged in 2012 was  23.5%,, the highest since monitoring this factor began in 2001.