The freezing of funds as part of the restrictive measures imposed in the context of the war in Ukraine absolutely and unconditionally prevents the holder of a share certificate from attending and voting at a general meeting of shareholders, the Court of Justice of the EU confirmed on Thursday 12 March in a judgment (Case C-465/24).
In 2022, the EU adopted restrictive measures against the Russian bank Sberbank because of the war in Ukraine, the Court points out. As SBK Art is an indirect subsidiary of Sberbank, its funds have also been frozen. STAK is a share certification entity under Dutch law which holds and manages the shares of the Dutch company Fortenova GroupTopCo.
As such, STAK issues Fortenova TopCo share certificates and pays dividends to the holders of these certificates. Among the holders of these certificates is SBK Art, which holds 41.82%.
When STAK’s Board of Directors called the holders of the share certificates to a general meeting of shareholders in August 2022 in Amsterdam, it announced that the holders subject to sanctions would be deprived of the rights attached to these certificates, in particular their right to vote. However, on the day of the meeting, SBK Art attempted to exercise its rights and was denied access to the meeting and the electronic voting system.
SBK Art then lodged an application for interim relief against this decision.
The Supreme Court of the Netherlands has finally asked the Court to interpret the concept of ‘freezing funds’. In its ruling, the Court held that the freezing of funds absolutely and unconditionally prevents the holder of a share certificate, or a person or entity associated with the holder, from attending and voting at a general meeting of shareholders. Certificates representing securities constitute funds and the exercise of the rights conferred by such certificates to attend and vote at a meeting of the holders of such certificates constitutes an act of use of such certificates which, as such, must be qualified as a ‘use of funds’. In addition, the exercise of these rights has one or more consequences for the funds, even indirectly.
Link to the judgment: https://aeur.eu/f/l54 (Original version in French by Solenn Paulic)