Friday, June 9, 2023

CNMV asks to put removal of independent directors on agenda

Rodrigo Buenaventura, president of the National Securities Market Commission (CNMV), has intervened in the Economic Affairs Commission of the Congress of Deputies. The reason for his presence was to highlight the work done by the stock market watchdog in connection with the dismissal of four independent directors at the shareholders’ meeting organized by Indra in June 2023. Buenaventura reaffirmed that the maneuver did not violate regulations and that there were no signs of concerted action among shareholders, something that, if proven, could compel the agency to demand a takeover bid. However, despite the fact that everything was done in accordance with the current legislation, the president of the organization recalls that what happened at the assembly of the technology group “was far from what Ibex company expected.” For this reason, he has proposed a series of measures to prevent cases like Indra’s from happening again.

Buenaventura has reminded the deputies that proposals for the dismissal of administrators are only one of the issues that do not have to appear on the agenda of the meeting, being able to propose aloud in the assembly itself. This “peculiar dynamic” of board opinion formation in listed companies means that, in practice, many shareholders detect (and cannot vote) a posteriori, these express terminations. “In the case of executive or proprietary directors, this is not particularly worrying. But in the case of independent directors, yes, because it is this type of director who best protects the general interest of shareholders, especially minority shareholders, who are least likely to attend meetings.” Contradicting this position, Recalls the president of the CNMV, is that the dismissal of independents is proposed and decided, statistically, “only by those that the independents do not represent.”

To address this lack of security, Buenaventura has proposed three changes. First, demand that the removal of independents be subject to inclusion in the agenda. “By this we will ensure that all shareholders can know in advance, transparently, and participate in decisions in an informed way,” he argues. The second change would be to lower the requirements for people making requests to supplement calls on topics that include items on the agenda in this case (today that limit is 3% of capital. “This way we’ll just avoid that big The shareholder or the board may propose the removal of independents.” Instead, the head of the CNMV has proposed providing a mechanism so that the criteria for the chairman of the board, the coordinating director and the chairman of the appointments committee are met. Buenaventura concluded concluded, “We will immediately forward these proposals to the Government so that, if deemed appropriate, they may be the subject of debate and, where appropriate, parliamentary discussion.”

Spain has no objection to being listed on Wall Street

On the other hand, the president of the CNMV has insisted that there is no obstacle to a listed Spanish company being listed in the United States, according to the findings of the study the stock market watchdog has done jointly with Bolsas y Mercados. Españoles (BME) following controversy over the decision of Spanish construction company Ferrovial to announce its intention to move to the Netherlands in order to list on Wall Street. Buenaventura elaborated that his body contacted the US Central Depository and found no legal or regulatory obstacles that would make that operation unfeasible.

In fact, it has corrected one of Ferrovial’s arguments, namely that the registration of the two stock exchanges (Iberclear in Spain and ITCC in the US) are not coordinated, ensuring that Wall Street only has one link with Canada, Not even with. From the Netherlands, the country where Ferrovial is going to move its headquarters. “I am not affirming that it is easy or immediate to establish a listing path from Spain to the United States for the first time by a listed company. Nor am I saying that this path, once the application is submitted Later, a difficulty of which we are unaware may not appear”, he explained during his speech in Congress.

For this reason Buenaventura sent a message to Ferroviel: “If there is interest, the request should be made, that path should be taken, and if any difficulty arises, which is possible, from the CNMV we will give our full support.” Also the issuer Spanish, whether it’s Ferrovial or anyone else, that wants to explore that possibility”, he concluded.

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