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Finland

Participation of non-Finnish persons in shareholders’ meetings to be facilitatedRoschier-Holmberg & Waselius, Helsinki

The Finnish Ministry of Justice has, in a recent governmental bill, proposed certain amendments to be made to the Finnish Companies Act (734/1978 as amended). The purpose of the amendments is to help foreign shareholders participate in the shareholders' general meetings of Finnish companies. The bill was issued to the Finnish Parliament on November 17 2000.

According to the bill, the right to attend and vote in a general meeting of shareholders is determined on the basis of a shareholders' register, prepared 10 days before the meeting. In addition, the period for mandatory advance registrations to the general meeting of shareholders could expire 10 days before the relevant meeting. Changes in the ownership of shares in the company after the this date would not have an effect on the right to attend and vote. The bill deviates from the provisions of the Companies Act, according to which, the fixed date may not be earlier than five days before the general meeting. Furthermore, selling shares in the company reduces the amount of votes of the respective shareholder at the general meeting.

In practice, the proposed amendments would mean that a non-Finnish shareholder no longer has to abstain for a certain period from dealing with shares in the company in order to be able to attend and vote at the general meeting of shareholders. According to the bill, the amendments to the Companies Act will reduce the economic risk of foreign investors, as well as improve the position of Finnish-listed companies as investment objects. In addition, Finnish companies will have more time to prepare for the general meetings of shareholders.

The owner of shares held by a nominee custodian would not, under the bill, have to open a book-entry account in order to attend the general meeting. Such a shareholder would have the right to register temporarily with the shareholders' register of the company. This will cut costs for foreign investors and make it easier for non-Finnish shareholders to attend and vote. The proposed amendments to the Companies Act will not in any way affect the publicity of foreign holdings in Finnish companies.

The bill also contains regulations which allow participation in the meeting through a video or network connection. Under the bill, the board of directors of Finnish companies are allowed to decide to use technical devices for the meetings. It is, however, required that the participants be identified reliably.

The proposed amendments are expected mostly to affect Finnish-listed companies, the shares of which are registered in the Finnish book-entry securities system. It is proposed that these amendments become effective as of January 2001.

Gunnar Westerlund

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