The Ksh amendment introduces holding and corporate government law to improve business activity. Experts are warning that the Act will, in its current form, increase the risk of economic activity.
The bill signed by the President introduces the biggest changes in years which are intended to improve the so-called corporate governance. Among them are:
- new powers of the Supervisory Board: to be informed in detail about the company's activities, gets the right to use the advisor. Whereas the Council may establish an ad hoc or permanent committee of the supervisory board, consisting of members of the supervisory board, to carry out certain supervisory tasks;
- compulsory redemption of shareholders holding 25% shares. Under the law, a meeting of shareholders or a general meeting of a subsidiary participating in a group of companies may adopt a resolution on the compulsory purchase of shares or shares of shareholders representing no more than 10% share capital by a parent company which represents directly at least 90% share capital. This means that in a public company, shareholders with no more than 5% votes, and in a closed company, shareholders with 25% shares, i.e. usually 25% votes;
- The new law assumes that group management requires binding instructions. The parent company may issue a binding order to a subsidiary participating in a group of companies to conduct the company's affairs (binding instruction), if this is justified by the interest of the group of companies and the specific provisions do not provide otherwise.
Adrian Zwolinski, financial market expert and corporate law Polish Confederation Lewiatan, notes that, in its adopted form, the Act will increase the risk of economic activity and introduce unnecessary bureaucracy.
– De facto regulates the ordinary circulation of documents and information inside the company through far-reaching criminal law instruments. As far as holding rights are concerned, there are unclear rules for adopting a resolution to refuse to execute a binding order, which will make decision-making in some companies more difficult.
In addition, the ambiguous rules determining the relationship between company dominance and dependence under the new holding law will create more serious problems than before – in order to introduce this law, it would be necessary to resolve earlier doubts first.