Corporate weekly highlights—13 June 2019

This week’s edition of Corporate highlights includes the government’s response to the Business, Energy & Industrial Strategy Committee’s Future of Audit report and dispute resolution analysis on an appeal relating to an unfair prejudice case which involved an order to purchase the minority shareholder’s shares (Re Sprintroom Ltd).

In this issue:

Brexit

Financial Services (Miscellaneous) (Amendment) (EU Exit) (No 2) Regulations 2019

SI 2019/1010: This enactment is made in exercise of legislative powers under the European Union (Withdrawal) Act 2018 in preparation for Brexit. This enactment is being made in order ensure a coherent and functioning financial services regulatory regime once the UK leaves the EU. It makes amendments to a number of financial services EU exit statutory instruments and to an EU delegated regulation, correcting errors identified in legislation after it was made, making amendments to ensure consistency between EU exit instruments and introducing a transitional provision. These amendments will ensure that these instruments operate effectively after the UK leaves the EU. It comes into force partly on 11 June 2019, partly on whichever is the later of immediately before exit day or 11 June 2019 and fully on whichever is the later of exit day or 11 June 2019.

For further information, see: LNB News 04/04/2019 35.

Audit

Government responds to BEIS Committee report on the Future of Audit

The Business, Energy and Industrial Strategy Committee (Committee) has published the government’s response to the Committee's report on the Future of Audit. The government's response welcomes the Committee's report on the Future of Audit and suggests that the majority of the Committee's recommendations are matters that will be the subject of consultations that the government has commissioned, or will be commissioning, in this area.

For further information, see: LNB News 07/06/2019 60.

Additional Corporate updates this week

Re Sprintroom Ltd, Prescott v Potamianos; Potamianos v Prescott

These appeals related to an unfair prejudice petition. It was found that the minority shareholder of a company had been subject to unfairly prejudicial conduct by a majority shareholder who had called for and obtained his removal as a director following a challenge to the intellectual property rights of the company. The Court of Appeal, Civil Division, dismissed the majority shareholder's appeal on the ground that, whilst the minority shareholder had acted in a way that was in breach of his fiduciary duty, that breach had not amounted to conduct that made it fair to exclude him from management.

For the approved judgment, see: [2019] All ER (D) 41 (Jun).

Unfair prejudice petitions—offers to purchase (Re Sprintroom Ltd)

Dispute Resolution analysis: The Court of Appeal considered that the trial judge had been wrong to postpone to a later hearing consideration of an offer to purchase the petitioner’s shares in this case, noting that such offers are generally better considered at the liability stage. This judgment provides useful guidance for practitioners advising in the early stages of an unfair prejudice claim, including on the factors which are likely to be relevant in most cases involving a consideration as to whether an offer to purchase shares was reasonable. Written by James Davies, barrister and mediator at New Square Chambers.

For further information, see News Analysis: Unfair prejudice petitions—offers to purchase (Re Sprintroom Ltd).

Additional news—daily and weekly news alerts

This document contains the highlights from the past week’s news. To receive all our news stories, whether on a daily or a basis, amend your personal settings within your ‘News’ tab on the homepage by clicking on either ‘Email’ or ‘RSS’ (depending on how you prefer to receive them) on the right hand side of the blue banner.

New and updated content

New Precedent—Public Company Takeovers

We have published the following Precedent in our Public Company Takeovers topic: Scheme document—additional information.

Dates for your diary

DateDevelopment
5 July 2019Deadline for responses to the ICSA consultation on effectiveness of independent board evaluation in UK listed sector.
The Governance Institute (ICSA) has published a consultation aimed at assessing the quality of independent board evaluation in the UK listed sector, as well as ways in which it might be improved. The review is being carried out at the request of the Department for Business, Energy and Industrial Strategy (BEIS).
See: LNB News 31/05/2019 33.
16 July 2019Revised Stewardship Code expected to be published and come into effect.
Following a consultation paper published in January 2019, the final version of the revised Stewardship Code is expected to be published and come into effect on 16 July 2019.
See: LNB News 30/01/2019 105 and Practice Note: The UK Stewardship Code—FRC consultation on revised Stewardship Code.

Trackers

To track key legislative and regulatory developments, see our Trackers:

  1. Brexit legislation tracker

  2. Brexit timeline

  3. Markets in Financial Instruments Directive II (MiFID II) and Markets in Financial Instruments Regulation (MiFIR) timeline

  4. Market Abuse Regulation timeline

  5. Prospectus Regulation tracker

  6. Transparency Directive tracker

  7. Listing Rules tracker

  8. Disclosure Guidance and Transparency Rules Sourcebook tracker

  9. Prospectus Rules tracker

Latest Q&As

New Q&As added this week:

  1. Is it possible to amend the amount of guarantee given by the members of a company limited by guarantee, and if so, how?

  2. Does a change in the rights attaching to the A shares in a private company limited by shares require the consent of the holders of the company’s B shares?

Useful information

To view analysis of the latest deals in the market and the underlying transaction documents, use our Market Tracker deal analysis tool.

To read about the latest corporate announcements, see our Market Tracker weekly round-up—7 June2019.

Relevant Articles
Area of Interest