Minority Shareholder Rights Research Articles

LEGAL REGULATION OF ADVERTISING IN MALAYSIA AND LITHUANIA

The relevance of this study Advertisement is a form of communication that is easy to be absorbed by consumers. Businesses use various marketing strategies to capture the attention of the prospective consumers to promote, to introduce and to attract consumers to buy their products. Conventional advertisement through print media, television and radio which the sources of advertisement mainly come from news, journalism and entertainment content has significant change due to the growing of online advertising. Despite various laws and regulations governing advertising in Malaysia, the challenges on online advertising remain problematic. Malaysia Advertisers Association raises their concern on digital advertising fraud and it is expected to remains an issue globally in the foreseeable future. Advertising market is a huge market worldwide with vast expenditure spends on advertising strategies. According to Guttmann from Statista (Guttmann, 2021), despite the challenges on Covid-19 pandemic which affected many industries, advertisement spending worldwide has been increasing steadily. It is expected to surpass 630 billion U. S. dollars in 2024. The forms of advertisement include television and radio, print media, digital and mobile advertising. In Malaysia, the total investment in advertising expenditure in 2019 was approximately 4.4 billion Malaysian ringgit. Regarding advertising and the problems of its legal regulation in Lithuania, it should be noted that trademarks play such an important role that there are almost no goods that are not marked with trademarks (Duguid, P., 2016). In the current market of goods and services, in the presence of huge competition, with the increase in the scale of international trade, the goods of manufacturers are increasingly distinguished by their own brand. The main problems identified in the research paper: effectiveness of establishment of centralised management; direct liability of a parent company; exit and buy-out rights of minority shareholders. Problems in Lithuania also arise that when promoting a product, several or even dozens of different products may be offered to the user under the same sign, without the need to re-introduce each one, which may confuse the user. The research paper undertakes following tasks: 1) to analyse laws and regulations governing advertisement in Malaysia and Lithuania; 2) to examine the Malaysian communications and multimedia content code; 3) to reveal misleading and deceptive conduct, false representation and unfair practice under the consumer protection act; 4) to disclose rising issues of targeted advertisement and advertising by influencer; 5) to compare results of previous tasks with Lithuanian law. The research paper concludes that offence contravenes any of the provisions of sections 3, 4, 4A and 4B of the Act. For first conviction, a fine not exceeding RM 3.000 or to imprisonment for any term not exceeding one year or to both may be imposed. In the case of a subsequent conviction, a fine not exceeding RM 5.000, or to imprisonment for a term not exceeding two years, or to both may be imposed. This strategy often very efficient and effective, however, it is more destructive than any other advertising. Targeted advertising often led to proliferation of fake news and clickbait. It facilitates data-mining and compromise personal data protection. Vulnerability of consumers increase with the challenges of targeted advertising. In the Republic of Lithuania it is prohibited to use advertising material that has been prepared in violation of copyrights to literary, artistic, scientific works and/or related rights. The novelty conventional advertisement through print media, television and radio which the sources of advertisement mainly come from news, journalism and entertainment content has significant change due to the growing of online advertising. The methodology used will be that of legal doctrinal research, legal theory method, the reform agenda research and comparative analysis.

Derivative Lawsuit in Ukraine: The Issue of Improving Legal Regulation

Background: Some jurisdictions provide for the right of members of a corporation to sue on its behalf and in its interests. This remedy is called ‘a derivative action’ (derivative lawsuit), and the right to file such a lawsuit is granted to a company’s members in case the wrongdoers are in its control, preventing the company from taking actions to protect its rights and interests – which is detrimental to the interests and rights of minority shareholders. However, derivative lawsuit’s regulation differs in each jurisdiction despite sharing common features, raising a variety of issues to be resolved. Methods: In this article, the author points out several issues and their possible solutions, which could be implemented in Ukrainian legislation: property qualification by itself cannot prevent abuse in filing a derivative lawsuit – extended ‘locus standi’ has to be implemented; holders of preferred shares have to be granted the right to file a derivative lawsuit; property qualification has to be substituted with a representation quota for members of non-entrepreneurial corporations; the circle of defendants should include major members (majority of members) and third parties, etc. Results and Conclusions: The concepts of a preventive derivative lawsuit and a derivative lawsuit for the invalidation of a company’s transaction and possible issues regarding them are analysed. Additionally, the necessity for implementing a ‘business judgement rule’ is emphasised.

Perlindungan Hukum Terhadap Pemegang Saham Minoritas Dalam Undang-Undang Perseroan Terbatas

The interests of minority shareholders in the company often conflict with a sense of justice and legal protection. This normative research discusses the issue of legal protection for minority public shareholders and the principle of justice in legal protection for minority shareholders. The legal protection of minority shareholders includes the right to propose a GMS (Article 79 paragraph 2 letter a), sue the board of directors (Article 97 paragraph 6) and the board of commissioners (Article 114 paragraph 6), request a company examination (Article 138 paragraph 3 letter a), and propose the dissolution of the company (Article 144 paragraph 1). The Company Law protects the rights of minority public shareholders based on the silent majority principle. The principle of justice to protect minority public shareholders is derived from the principle of distributive justice, the voting rights of minority shareholders are proportional to the portion of shares paid up, even though the equality is not equal. Judges' considerations regarding the legal protection of minority public shareholders are based on Article 138 paragraph (3) letter a of the Company Law, at least 1/10 of the total shares. Minority public shareholders are eligible to apply for an SLJ examination to the court. So that the minimum requirement of 1/10 of the total shares becomes a guideline to protect the rights of minority shareholders and as a derivation of the principle of distributive justice

Does corporate social responsibility affect shareholder value? Evidence from the COVID‐19 crisis

The COVID‐19 outbreak and the subsequent lockdown were an unanticipated shock to the global stock market. Managers also had minimal time to counterbalance its effect through corporate policies. Therefore, this health crisis offers a unique opportunity to examine the effect of corporate social responsibility (CSR) on shareholder value. We observe that firms engaged in more CSR activities outperform other firms. This suggests that CSR plays a positive role in determining shareholder value, particularly for an emerging market where minority shareholder rights are weak. Collaborating with our main finding, we further find that governance metrics play a significant role.

Legal Protection of Minority Shareholders under Corporate Governance Process

In recent days, most of the corporate are failing in managing business effectively and the major cause for this is conflicts between majority and minority shareholders of the company which lead to direct or indirect destruction of business at the end. Even though, there are certain laws and provisions made for the sake of minority shareholders, those are enforced well and needs to make them as utmost safeguards to minority shareholders. In this paper, we will discuss the issues for conflict including rights of minority shareholders as well as roles and responsibilities of shareholders by analyzing possible solution for conflicts between majority and minority shareholder.

The Effect Of Corporate Governance On Corruption In Public Listed Companies In The Context Of Jordan

The OECD defined corporate governance as, enforce laws, rules and standards that define the relationship between company management on the one hand, shareholders, stakeholders or parties associated with the company on the other, and urge financial institutions to adopt those laws and standards in their systems to ensure universal classification, such laws and standards are called corporate governance. Some countries have adopted such standards, which are based on integrity and transparency, such as the Hashemite Kingdom of Jordan, but the apply these standards to protect the minority of shareholders in the joint stock companies are in conflict with certain legal provisions laid down by the Jordanian legislature in the companies Act. The Jordanian companies' law and some other financial laws have, of course, included a number of factors that encourage corporate governance, but on the other hand, we find texts that still impede the application of these standards and provide indicators that do not encourage the application of their standards and affect the rights of minority shareholders. The study will refer to the most important corporate governance criteria that balance the rights of the minority and majority shareholders with those that still need to be modified.

The Exit Theory of Judicial Appraisal

For many years, we and other commentators have observed the problem with allowing judges wide discretion to fashion appraisal awards to dissenting shareholders on the basis of widely divergent, expert valuation evidence submitted by the litigating parties. The results of this discretionary approach to valuation have been to make appraisal litigation less predictable and therefore more costly and likely. While this has been beneficial to professionals who profit from corporate valuation litigation, it has been harmful to shareholders, making deals costlier and less likely to complete. In this Article, we propose to end the problem of discretionary judicial valuation by tracing the origins of the appraisal remedy and demonstrate that its true purpose has always been to protect the exit rights of minority shareholders when a cash exit is otherwise unavailable, and not to judge the value of the deal. While such reform would be costly to valuation litigation professionals, their loss would be more than offset by the benefit of such reforms to shareholders involved in future corporate transactions. Shareholders presently have adequate protections, both from private arrangements and legal doctrines involving fiduciary duties.

Protection of minority shareholders’ rights in group of companies: Lithuania and EU company law perspectives

Just as in the entire European Union, in Lithuania company groups are an integral part of the modern business world. It is the companies that are part of company groups are leading both in Lithuania and in the European Union in terms of a number of economic indicators: revenues, number of employees, amounts of taxes paid and other contributions. Despite being an integral part of modern business, regulation of company groups has not yet attracted sufficient attention both at the European Union or the national level. Such absence of a consistent regulation may lead to or cause, inter alia, infringements of rights of minority shareholders. Accordingly, the purpose of the present article is to assess whether the effective Lithuanian or European Union regulation is sufficient to protect minority shareholders’ rights in group of companies.

Determinants of corporate governance practices in Brazil

We study the determinants of Corporate Governance (CG) practices in Brazil. Using hand collected data, we build CG subindices for Board Structure, Board Procedures, Minority Shareholders Rights, and Disclosure, and an overall CG index, BCGI, computed as the average of these four subindices. During our sample period, CG practices changed significantly: improvement was stronger among firms in the High- than Low-CG requirement listings. Tangibility and Liquidity are the only variables that predict CG practices with some consistency. Most importantly, we find no evidence that Tobin's q predicts CG practices. This last result lowers the possibility of reverse causation in analyses that use CG practices as determinant of firm value.

NATIONAL ECONOMIC REFORMS AND THEIR IMPACT ON THE ECONOMIC SECURITY OF BUSINESS IN UKRAINE

У статті проаналізовано вплив національних економічних реформ на корпоративну безпеку бізнесу в Україні. Серед регуляторних заходів, здатних позитивно вплинути на корпоративну безпеку українського бізнесу, виділено: запровадження процедур squeeze-out і sell-out для акціонерних товариств усіх форм власності, що зменшують ризики корпоративного шантажу; започаткування інституту комплаєнсу (обов’язкового для певних типів підприємств), який є інструментом нівелювання корупційних ризиків, а також засобом попередження корпоративного шахрайства; розширення змістового наповнення корпоративної звітності, яке зменшує імовірність нецільового використання корпоративних коштів, зловживання корпоративними ресурсами. Водночас зміст цих заходів подекуди суперечить іншим цілям національних економічних реформ. Так, процедура squeeze-out створює штучну асиметрію у реалізації соціально-економічних прав власників: завдяки ній мажоритарні акціонери мають можливості отримати повний контроль над товариством за рахунок нехтування майновими правами міноритарних акціонерів. Це порушує принцип верховенства права, дотримання якого є одним з ключових завдань реформ, що наразі здійснюються в Україні.

The Review on the Expansion of Rights of Minority Shareholders in Corporate Governance

The Review on the Expansion of Rights of Minority Shareholders in Corporate Governance

The Outcome Versus Substitute Models of Dividends: A Change in Minority Shareholder Protection

The new Brazilian Company Law, enacted in 1976, increased the protection of minority shareholder rights, providing an experiment to test alternative agency theories of dividends. Are dividends an outcome of the effective legal protection of shareholders? Or are dividends a substitute for legal protection? In the pre-1977 low-legal protection Brazilian market, growing firms issuing equity in the future used to signal their type through higher dividends. With the new law protecting outside investors, dividend payouts do not generally increase, mature firms do not pay higher dividends, but growing firms cut them down, results that support the Substitute narrative of dividends.

New Outlines of Corporate Governance Transparency in Russian Electric Power Industry in the Interests of Investors

The paper performs an in-depth assessment of the current transparency of corporate governance of Russian power companies in the interests of long-term investors. It uses the methodologies of Standard & Poor's, Spencer Stuart and Transparency International, and the criteria of the new Russian Corporate Governance Code. It identifies new outlines of transparency for these companies relating to expanding the list of criteria for its assessment and improving the quality of the information disclosed. It takes into account the results of a comparative analysis carried out in regard of the current information disclosure in the considered companies with its disclosure at the beginning of the post-reform period. The article features the additional data obtained by comparing the information disclosure in Russian power generating companies with leading national companies, and the largest corporations in Europe, the United Kingdomб and the United States. It places an emphasis on the special significance of the transparency of the ownership structure and efficiency of companies Board of Directors, determined by an increase in the offshore assets and violation of the rights of minority shareholders. It lays the stress on the need of timely updating and developing new internal documents to enhance the transparency quality of corporate governance in the interests of investors.

The impact of institutional ethics and accountability on voluntary assurance for integrated reporting

Purpose The purpose of this paper is to investigate whether the ethics and accountability environment influences the voluntary assurance demand for integrated reports through the lens of institutional theory. Design/methodology/approach This study used an international sample of 192 companies that have registered in the International Integrated Reporting Council’s (IIRC) early examples database and that published integrated reports during the years 2011–2016. Binary logistic regression as well as Instrumental Variables (IV) regression with Probit and GMM estimators were employed to test the proposed hypotheses. Findings The results confirm that assurance of integrated reports serves as a response to the absence or incompetence of formal and informal institutions that facilitate private contracting. Specifically, the authors found that firms tend to assure their integrated reports in business environments that are characterized by weaker ethical behaviors, less effective boards, poorer auditing and reporting standards, and insufficient protection of the rights of minority shareholders by the legal system. Research limitations/implications This study responds to the research calls upon integrated reporting assurance by investigating the underlying drivers of and motives for voluntary assurance on integrated reports. Practical implications The findings provide practical implications for firms, regulators and assurance firms. Firms can utilize the results of the study in determining their corporate policies and strategies regarding whether to undertake assurance on integrated reports. Regulators can also consider the results in shaping and improving the institutional ethical and accountability environment of their countries. Further, assurance firms can use these results to help position themselves and guide their market entry decisions. Originality/value This study adds to the understanding of institutional factors that impact the assurance of integrated reports which has been rarely examined by prior research. In particular, this is one of the few attempts to examine the link between institutional ethics and accountability environment and the voluntary assurance demand in an international context.

Determinants of Corporate Governance Practices in Brazil: 2010 to 2014

We study the determinants of corporate governance (CG) practices in Brazil between 2010 and 2014. We build CG subindices for Board Structure, Board Procedures, Minority Shareholders Rights, and Disclosure, and an overall CG index, BCGI, computed as the average of these four subindices. During our sample period, CG practices changed significantly: improvement was stronger among firms in the High- than Low-requirement listings. Tangibility and Liquidity are the only two variables predict CG practices with some consistency. We find no evidence that Tobin’s q predicts CG practices. This last result lowers the possibility of reverse causation in analyses that use CG practices as determinant of firm value.

The Legal Protection of Minority Shareholders Under Ethiopian Law: Comparative Analysis

Business organizations are important to operate business activities that demand the involvement of many persons. In these days, therefore, business organizations are getting momentum in every sector of the economy. Business can be run in different forms of business organizations, one of which is a company. This article is to show the deficiencies of legal protection of minority shareholders under Ethiopian company law compared with the England and German company laws. Since Ethiopia commercial law is under the process of revision, this article will have a paramount importance and can be used as input for amendment of commercial code of Ethiopia. Thus, we tried to analyze specifically, the legal protection of Ethiopian law offers for minority shareholders by comparative perspective. It includes the rights of minority shareholders; the substantive protection of minority shareholders such as the right to call general shareholders meeting, right to propose resolution, right to challenge decision of the company, right to appointment of independent audit, right to access information and voting rights. The article finally ends up with some concluding remarks and the deficiencies of Ethiopian minority shareholders protection, if any, and lessons to be learned from UK and Germany laws would be reflected as recommendation to the Ethiopian commercial code. Keywords : Minority share holders, Protection of Minority share holders, Company law. DOI : 10.7176/JLPG/86-03 Publication date :June 30 th 2019

An Interpretive Structural Model of Barriers in Implementing Corporate Governance (CG) in Pakistan

The purpose of this study is to structure a model of relationships among barriers in the implementation of CG in Pakistan. It also points out a key barrier in embarking on the regime of CG. The design of research consists of a literature review, data collection and analyses. Modeling methodology entails ISM coupled with MICMAC. Findings revealed that “lack of investigation about the rights of minority shareholders” is the most critical barrier since this occupies the bottom of the model. Whereas, barriers namely “basic shareholders rights are not often protected, minority shareholders rights are often violated, lack of autonomy on the part of the auditors and rules requiring equity ownership disclosure are not followed” are least critical since they occupy the top of the model. MICMAC analysis revealed that three barriers fall in the independent quadrant, six in the linkage, six independent and two in autonomous. This study is helpful to regulators and corporations to successfully embark on the regime of CG.

The Case for Dual-Class of Shares

The debate over whether dual class of shares increases or decreases share value, should be prohibited or not, should be subjected to mandatory sunset provisions, and so on has been heating up over the last few years. This paper reviews the pros and cons of dual class of shares in light of more recent empirical results of (mostly) American studies. The paper surveys the evolution of dual-class companies in the Canadian context and makes a number of recommendations to enhance the usefulness of this type of capital structure and protect the rights of minority shareholders. The paper comes out against time-based sunset clauses but supports the obligation for dual-class companies to adopt a “coattail” provision, as is the case in Canada, which provision ensures that all shareholders will have to be offered the same price and conditions should the controlling shareholder decide to sell its controlling stake in the company. The paper also recommends that separate tallies of vote results be made public for each class of shares and that a third of board members be elected by shareholders with “inferior” voting rights. Not only is there growing evidence of their better economic performance but the coupling of dual class and family ownership brings about longer survivorship, better integration in the social fabric of host societies, less vulnerability to transient shareholders and more resistance to strategic and financial fashions. This precious form of ownership must come with appropriate measure to ensure and protect the rights of minority shareholders.

Minority Shareholders Rights and Audit Quality: Empirical Evidence from Turkey

Minority Shareholders Rights and Audit Quality: Empirical Evidence from Turkey

Characteristics of Shar¯ı‘ah Supervisory Board, Corporate Governance Mechanisms and Efficiency of Islamic Banks: Evidence from Listed Banks in Asia

This study investigates the impact of characteristics and role of Shar¯ı‘ah Supervisory Board (SSB) and corporate governance mechanisms on efficiency in Islamic Banks (IBs). A sample of 30 banks is drawn from those IBs that are listed on Asian stock markets. Corporate and SSB act as guardians of rights of minority shareholders by constantly monitoring controlling shareholders. The characteristics of both these boards affect the procedures installed thus affecting efficiency of these financial institutions. Multivariate panel data regression analysis is employed as the estimation procedure. The results show that a few characteristics of both the boards are positively related to efficiency. The study reports an empirical evidence of positive association between size of the SSB, audit committee independence and efficiency of banks listed in Asia. The results of this study suggest that the users of financial statements should consider characteristics of corporate as well as Shar¯ı‘ah boards for the evaluation of respective Islamic banks. This study also notifies that in order to improve efficiency, the regulators should set forth guidelines regarding the size of SSB as well as the percentage of independent members on the audit committee in Islamic banks where governance is shared between the two boards, regulations are constantly being developed and installed with somewhat limited knowledge and skill of board members regarding the implementation of these regulations to improve efficiency.