The Securities and Exchange Commission drafted rules that will empower minority shareholders of publicly-listed companies to call for special meetings and include items in the agenda.
The SEC, in a draft memorandum circular released Wednesday, said the proposed rules would promote good corporate governance and ensure the protection of minority investors.
Under the proposed rules, shareholders representing at least 10 percent of the outstanding capital stock will the right to call for a special stockholders’ meeting.
The holding of such special meetings will be subject to the guidelines set under Section 49 of Republic Act No. 11232, or the Revised Corporation Code of the Philippines, as may be applicable.
Shareholders representing at least five percent of the outstanding capital stock will have the right to include items in the agenda prior to a regular or special stockholders’ meeting.
Any officer or agent of the corporation who refuses to allow a qualified shareholder to exercise the right to call for a meeting or put items on the agenda will face administrative sanctions provided under the Revised Corporation Code.
If the refusal is made pursuant to a resolution or order of the board of directors, the liability for such action will be imposed on the directors who voted for it.
Covered parties have until April 22, 2020 to submit their comments and inputs on the proposed rules.
The SEC earlier issued rules requiring shareholders’ approval for the sale or disposal of properties and assets amounting to at least 51 percent of a company’s total assets.
Under the rules, the vote of the stockholders representing at least two-thirds of the outstanding capital stock in a stockholders’ meeting will be required prior to the execution of the sale transaction.