Related Party Transactions and Minority Shareholder Rights

Related Party Transactions and Minority Shareholder Rights You do not have access to this content

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Auteur(s):
OCDE
Date de publication :
29 mars 2012
Pages :
120
ISBN :
9789264168008 (PDF) ; 9789264098251 (imprimé)
DOI :
10.1787/9789264168008-en

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Related party transactions involve parties who can control the terms of a transaction in their favor potentially at the cost of the company. They include management, board members and controlling shareholders. The publication reviews provisions covering related party transactions and the protection of minority shareholder rights  in 31 jurisdictions, both OECD and non-OECD. In addition, the regulatory and legal systems that have beeen developed in five jurisdictions are reviewed in detail and allow a wide range of experience to be compared and lessons drawn. They are, Belgium, France, Italy, Israel and India.  

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  • Cliquez pour accéder:  Foreword

    This report presents the results of the third thematic peer review based on the OECD Principles of Corporate Governance. The report is focused on the corporate governance framework that manages related party transactions with the aim to protect minority investors. It covers over 30 jurisdictions, including in-depth reviews of Belgium, France, India, Israel,The statistical data for Israel were supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. Italy and India.

  • Cliquez pour accéder:  Executive Summary

    Around the world, the potential to abuse related party transactions (RPTs) covering both equity and non-equity transactions is viewed as an important policy issue even though they are seldom banned. Rather, jurisdictions have sought to put in place management and approval processes to minimise the negative potential. There is a wide variability across jurisdictions so that this report focuses on the experience of five jurisdictions (Belgium, India, Israel, Italy and France) with supplemental information from 31 others.

  • Cliquez pour accéder:  Assessment and Recommendations

    Around the world, the potential to abuse related party transactions (RPTs) covering both equity and non-equity RPTs is viewed as an important policy issue because of some high profile cases that have damaged market integrity through inequitable treatment of shareholders. Jurisdictions have responded in many different ways and efforts to manage such transactions are ongoing. The problems raised center around an acute policy-induced trade-off. On the one hand, the policy process or consensus accepts that related party transactions can be economically beneficial, especially in company groups where there are often developmental arguments that they substitute for under-developed markets and institutions. Therefore, with some exceptions such as loans to directors, RPTs are not banned. Once such an approach is in place it is difficult to change so that there is strong path dependence with reforms often marginal. On the other hand, there is a clear concern that such transactions can be abused by insiders such as executives and controlling shareholders. Indeed, concern to control corporate self-dealing has been a key aspect of the development of corporate law in many countries over the past century. Searching for a balance is ongoing as institutions and economies change. However, as this report demonstrates, the third corporate governance peer review of the OECD Corporate Governance Committee, effective overall solutions have still not been found in many jurisdictions. There is thus a great need to exchange experiences.

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  • Ouvrir / Fermer Cacher / Voir les abstracts Overall Situation and Lessons from the Reviewed Economies

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    • Cliquez pour accéder:  Managing Related Party Transactions: A Review of Practices

      This chapter reviews the experience of five jurisdictions (Belgium, France, India, Israel, and Italy) in managing related party transactions and is set against a general review of legislation in over 30 jurisdictions. The chapter presents a synthesis of the experiences in the reviewed economies and considers the applicability of the OECD Principles of Corporate Governance. It also notes the measures that appear to have worked and the complementary features of the corporate governance system that may have contributed to this success. Finally, the chapter considers whether the OECD principles adequately deal with the issues surrounding RPTs in these economies.

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  • Ouvrir / Fermer Cacher / Voir les abstracts Country Reviews of Provisions and Practices Covering Related Party Transactions and Protection of Minority Shareholder Rights

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    • Cliquez pour accéder:  Belgium: Review of Related Party Transactions and Minority Shareholder Rights

      This chapter on Belgium describes the structure of listed companies and especially the concentration of ownership and the use of company groups all of which are related to the type and intensity of related party transactions. The corporate governance framework that has been established to manage such transactions and to protect minority shareholders is analysed and the potential for improvements discussed.

    • Cliquez pour accéder:  France: Review of Related Party Transactions and Minority Shareholder Rights

      This chapter on France describes the structure of listed companies and especially the concentration of ownership and the use of company groups all of which are related to the type and intensity of related party transactions. The corporate governance framework that has been established to manage such transactions and to protect minority shareholders is analysed and the potential for improvements discussed.

    • Cliquez pour accéder:  India: Review of Related Party Transactions and Minority Shareholder Rights

      This chapter on India describes the structure of listed companies and especially the concentration of ownership and the use of company groups all of which are related to the type and intensity of related party transactions. The corporate governance framework that has been established to manage such transactions and to protect minority shareholders is analysed and the potential for improvements discussed. Reference is made to the scheduled review of company law by the parliament.

    • Cliquez pour accéder:  Israel: Review of Related Party Transactions and Minority Shareholder Rights

      This chapter on Israel of the OECD report on the corporate governance framework for managing related party transactions describes the structure of listed companies and especially the concentration of ownership and the use of company groups, all of which are related to the type and intensity of related party transactions. The corporate governance framework that has been established to manage such transactions and to protect minority shareholders is analysed, and the potential for improvements discussed.

    • Cliquez pour accéder:  Italy: Review of Related Party Transactions and Minority Shareholder Rights

      This chapter on Italy describes the structure of listed companies and especially the concentration of ownership and the use of company groups all of which are related to the type and intensity of related party transactions. The corporate governance framework that has been established to manage such transactions, and especially the new regulations introduced by CONSOB to protect minority shareholders is analysed and the potential for improvements discussed.

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