The Securities and Exchange Commission empowered minority shareholders in publicly-listed companies to call for special stockholders’ meetings.
Under the SEC Memorandum Circular No. 7, Series of 2021 approved on April 22, any number of shareholders holding at least 10 percent of the outstanding capital stock of a listed firm will have the right to call for a special stockholders’ meeting, subject to the guidelines provided under Section 49 of Republic Act No. 11232, or the Revised Corporation Code of the Philippines and other relevant laws, rules and regulations.
“The newly issued rules empower minority shareholders to better protect and advance their interests, as well as help listed firms have a wider perspective and be more inclusive in their decision-making process,” SEC chairperson Emilio Aquino said.
“The greater protection afforded to minority shareholders should encourage increased participation in the stock market and, in turn, further deepen our capital market to support business expansions, jobs creation and overall economic growth,” he said.
The call for special meeting should be in writing, addressed to the company’s board of directors and transmitted through the corporate secretary at least 45 days prior to the proposed date of the meeting.
The written request for the meeting should include the name of the stockholders and their respective percentage of shareholdings, which should constitute at least 10 percent of the outstanding capital stock of the corporation. The letter should be duly signed by all requesting shareholders.
It should also provide the purpose, date, time and proposed agenda items for the meeting.
The proposed agenda items should be matters that affect the legitimate interests of the shareholders on corporate actions where stockholders’ approval is required under the RCC, except the right to remove a director.
If the board of directors determines that the call for the special meeting is compliant with the memorandum circular, they will issue a notice to convene the meeting at least seven days prior to the proposed date.
Any officer or agent of a corporation who refuses to allow a qualifying shareholder to exercise his/her right to call for a meeting will be made liable under Section 158 of the RCC, which allows the SEC to impose a fine ranging from P5,000 to P2 million, issue a permanent cease and desist order, suspend a corporation, revoke the corporation’s certificate of incorporation and dissolve the corporation.