Supreme Court clarifies the scope of protection of minority rights to information | Legal

Supreme Court clarifies the scope of protection of minority rights to information | Legal
Supreme Court clarifies the scope of protection of minority rights to information | Legal

If the right of minority shareholders to information is, in general, a matter of practical relevance, in the context of the approval of annual accounts it is a subject of great recurrence. And even more so at this time for those companies whose exercise coincides with the calendar year and are therefore close to approving their accounts (if they have not already done so).

Recently, the Supreme Court (SC) has resolved a case of challenging corporate agreements for violation of the right to information of a partner who owned 20% of the share capital of a limited company dedicated to the exploitation of catamarans. The ruling reverses the judgment of the Provincial Court of Palma de Mallorca which declared the invalidity of the corporate resolutions adopted at the company’s ordinary general meeting. The reason for the challenge was that the minority shareholder had not received the requested information on, among other matters, the list of daily sales during the year for each of the commercial points and the payrolls of each of the company’s employees accrued during the year, considering this information necessary to exercise his right to vote.

The Supreme Court upholds the appeal filed by the defendant company and considers that the information provided to the minority shareholder It was enough for the exercise of their rights as a shareholder. To this end, the court distinguishes between necessary information (which makes it obligatory to comply with the right to information) and essential information (the deprivation of which would entitle the shareholder to challenge the agreements), specifying, therefore, that not all information omitted by the directors allows the challenge of the meeting, but only when this omission affects essential information for the exercise of the participation rights.

The court conducts a doble test: Firstly, it understands that the relevance must be assessed in order to interpret whether the information is “rationally useful or relevant to condition the behavior of the shareholder with respect to the exercise of his rights.” When this first criterion is met, the obligation to inform the shareholder arises, which is what is understood as necessary or pertinent information. Secondly, the Supreme Court specifies that only agreements can be challenged when the omitted information is essential for the exercise of the shareholder’s participation rights. When what is omitted is necessary but not essential information, the agreements cannot be challenged, but the court leaves open the exercise of other actions (for example, condemnation to provide the information).

In this case, the Supreme Court considers that not delivering the daily sales report and payrolls does not constitute an essential violation of the right to information that justifies the nullity of the agreements. As regards the first, because this information could be extracted from the general ledger, to which the minority partner had access. As regards the non-delivery of payrollsbecause the minority partner received in any case a summary containing the most relevant information.

In this context, this very recent ruling clarifies that the challenge to corporate agreements can only be justified when the incorrect or unprovided information is essential for the exercise of the rights of the shareholders.

The right to information is neither absolute nor unlimited; it must be exercised in good faith and for a legitimate purpose and must be balanced against other rights and interests at stake, such as trade secrets, data protection or the effectiveness of corporate management. In short: the Supreme Court, through the distinction it makes between necessary information and essential information, is committed to preserving legal certainty and the principle of proportionality in the application of the right to information of minority shareholders.

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