EIMIN: introduction of multi-voting shares to attract investment
Today, the government approved the Ministry of the Economy and Innovation's (EIMIN) proposal to introduce multi-voting shares in Lithuania. This will promote the development of the capital market and create greater opportunities for companies to grow by attracting investment and capital through securities on the public market.
The proposal also aims to enable company shareholders to maintain control by issuing new shares or converting existing ones into multi-voting shares. This would ensure greater transparency and protect the interests of other shareholders.
'The ability for companies to issue separate classes of ordinary multiple-voting shares will significantly strengthen their ability to attract new investments, expand their operations and grow more rapidly. At the same time, this will allow controlling shareholders to retain control over decision-making. These changes will also improve the business environment and increase corporate competitiveness,' says Inga Steponavičienė, Chancellor of the Ministry of the Economy and Innovation.
Under the approved amendments, companies whose shares are not traded on a regulated market, a growth market for small and medium-sized enterprises or a multilateral trading facility would be able to issue multi-voting shares.
To protect the interests of minority shareholders, decisions on multi-voting shares could only be made at a general meeting of shareholders by qualified majority, with separate approval from the holders of each class of shares.
A single multi-voting share would confer no more than ten votes, and this right would be lost upon transfer of the share, except in the case of inheritance. The company’s articles of association could also provide additional safeguards to protect the interests of other shareholders.
This amendment to the Law on Joint-Stock Companies, approved by the government, transposes the EU Directive's provisions regarding share structures in companies that include multi-vote shares into national law. These amendments to the law must still be approved by the Seimas. They are expected to take effect on 1 November this year.