THE Securities and Exchange Commission (SEC) has approved a rule that allows minority shareholders of publicly-listed companies to put items on the agenda of a shareholders’ meeting.
SEC Memorandum Circular No. 14, Series of 2020 mandates that a shareholder or a group of shareholders holding at least 5 percent of the outstanding capital stock of a publicly- listed corporation can include items on the agenda prior to a regular or special stockholders’ meeting.
“All items added on the agenda by qualified shareholders pursuant to this circular after the definitive information statement (DIS) has been filed with the Commission shall be filed under “other matters.” In this regard, the reporting company shall no longer be required to amend its DIS,” the SEC said.
The SEC said any officer or agent of the company who shall unjustly refuse to allow a qualified shareholder or group of shareholders to exercise the right to put items on the agenda shall face administrative sanctions provided under Section 158 of the Revised Corporation Code of the Philippines.
“If the refusal is made pursuant to a resolution or order of the board of directors, the liability for such action shall be imposed upon the directors who voted for such refusal,” it said.
“Furthermore, it shall be a defense to any action under the proposed circular that the shareholder exercising any of the rights provided therein was not acting in good faith or for a legitimate purpose,” it added.
Emilio B. Aquino, SEC chairman, said the new rule aims to “promote good corporate governance and the protection of minority investors, in line with our mandate as the overseer of the corporate sector and the champion of the investing public.”
“The rules also bolster the reforms that the Commission and other government agencies have been pursuing to further improve the ease of doing business in the Philippines and make our economy more competitive globally,” he said.
