Minority shareholders: how far do your rights extend?

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In the recent case of Eckerle and others v Wickeder Westfalenstahl and another, the High Court examined whether minority shareholder protection afforded by the Companies Act 2006 extends to a holder of beneficial interest in shares.

DNick Holding plc was a public limited company incorporated in England and Wales. It was managed and operated in Germany and had shares listed on the German stock exchange. The share capital of DNick was held by just two shareholders, one of which was the Bank of New York Depositary (Nominees) Limited (BNY). BNY acted as the common depositary agent, holding shares on trust for the holders of accounts with Clearstream, a clearing and settlement division of Deutsche Borse.

Mr Eckerle and two others (the claimants) held ultimate economic interests in the underlying securities of shares held by BNY in DNick. Following the passing of a special resolution, the listing of DNick’s shares on the German stock exchange was cancelled, and DNick was re-registered as a private limited company. The claimants alleged that their aggregate beneficial interest in DNick’s shares, gave them standing to apply under section 98 of the Act for cancellation of the resolution for DNick’s re-registration as a private limited company…

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