Rules On Inquiry Proceedings To Be Amended
At the beginning of September, the Minister of Justice and Security submitted a bill to the lower house of the Dutch Parliament that will amend the rules on inquiry proceedings. This newsletter describes the most important proposed changes under the bill.
The main changes in a nutshell:
the criteria for initiating inquiry proceedings will be made stricter: shareholders of companies with an issued capital of more than EUR 22.5 million will be required to have a larger shareholding than is currently the case in order to qualify (this applies to both public limited liability companies – NVs – and private limited liability companies – BVs); companies and other legal entities will be allowed to request an inquiry into their own affairs; the rules on immediate measures will be supplemented; the procedural safeguards (due process protections) will be strengthened; the liability of investigators will be limited and additional rules on costs will apply. The right of inquiry
Based on the right of inquiry, disputes within companies and other legal entities can be submitted to the Enterprise Chamber of the Amsterdam Court of Appeal. If the Enterprise Chamber determines that there are well-founded reasons to doubt the correctness of the entity's management, it can order an inquiry. Based on the result of that inquiry, the Enterprise Chamber will then decide whether mismanagement has occurred and, if so, can order a range of measures. In addition, the Enterprise Chamber can, on request at any stage of the proceedings, order immediate provisional measures if required in connection with the entity's situation or in the interests of the inquiry.
In the last few decades the number of inquiry proceedings has increased significantly. This is because they are fast and solution-oriented, and thus fill an important need in the corporate world. Following an evaluation conducted by the Ministry of Justice and Security, recommendations were made for certain improvements to the rules on such proceedings; these recommendations have now been incorporated in the bill.
Click here to view the text of the bill (in Dutch).
Who can initiate inquiry proceedings?
Shareholders and depositary receipt holders
In this regard, the bill introduces a distinction between smaller and larger companies, the line being drawn at an issued capital of EUR 22.5 million. In the case of smaller companies (those with an issued capital of EUR 22.5 million or less), the current rules will remain unchanged; for shareholders/depositary receipt holders of larger...
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