By James A. Loyola
The Securities and Exchange Commission (SEC) is planning to issue new rules to give minority shareholders of publicly listed companies the power to call for special meetings and include items in the agenda.
The draft memorandum circular, which the Commission released on April 15, provides that shareholders representing at least 10 percent of the outstanding capital stock shall have the right to call for a special stockholders’ meeting.
The holding of such special meetings shall 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.
Meanwhile, shareholders representing at least 5 percent of the outstanding capital stock shall 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 shall refuse to allow a qualified shareholder to exercise the right to call for a meeting or put items on the agenda shall 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 shall be imposed upon the directors who voted for such refusal.
Furthermore, it shall be a defense to any action under the pro¬posed circular that the shareholder exercising any of the rights provided therein was not acting in good faith or for a legitimate purpose.
The proposed rules take off the mandate of the SEC to promote good corporate governance and the protection of minority investors through, among others, the issuance of rules and regulations consistent with international best practices.