Information obligations in a public company

And so, anyone who:

• achieved or exceeded 5%, 10%, 15%, 20%, 25%, 33%, 33 1/3%, 50%, 75% or 90% of the total number of votes in a public company, or
• held at least 5%, 10%, 15%, 20%, 25%, 33%, 33 1/3%, 50%, 75% or 90% of the total number of votes in that company, and as a result of a reduction in that holding reached 5%, 10%, 15%, 20%, 25%, 33%, 33 1/3%, 50%, 75% or 90% or less of the total number of votes.

is obliged, no later than within 4 working days of the date on which they became aware of the change in the share of the total number of votes, to notify the Polish Financial Supervision Authority (KNF) and the company thereof, no later than within 4 working days of that date.  In the case of a change resulting from the acquisition or disposal of shares in a public company in a transaction concluded on a regulated market or in an alternative trading system, the disclosure obligation must be fulfilled no later than within 6 trading days of the date of the transaction.

A shareholder must also fulfil these obligations where they previously held more than 10% of the total number of votes and a change has occurred of at least:

• 2% of the total number of votes – in a public company whose shares are admitted to trading on an official listing market,
• 5% of the total number of votes – in a public company whose shares are admitted to trading on another regulated market or introduced to an alternative trading system.

However, where a shareholder previously held more than 33% of the total number of votes, the disclosure obligation is triggered when there is a change of at least 1% of the total number of votes.

A breach of the disclosure obligation in the scope indicated above results in the inability to exercise voting rights attached to the shares that are the subject of the transaction or other legal event on the basis of which the shareholder has reached or exceeded the relevant voting threshold.

A shareholder who has exceeded the 50% threshold of the total number of votes may not exercise voting rights in respect of all shares in the public company, unless, within three months of exceeding that threshold, they issue a notice inviting offers to sell or exchange all remaining shares in that company. This prohibition also applies to all shares in a public company held by subsidiaries of the shareholder, as well as shares in a public company held by third parties.

Disclosure obligations also apply collectively to all entities bound by a written or oral agreement concerning:

• the direct or indirect acquisition, or subscription as a result of an offer not constituting a public offer, by those entities or by a third party**,** of shares in a public company**,**
• voting in concert at a general meeting
• pursuing a consistent policy towards the company, even if only one of these entities has taken or intends to take actions giving rise to these obligations.

The Act on Public Offers also introduces a presumption of the existence of such an agreement in the case of spouses, descendants and ascendants.

Therefore, when acquiring shares in public companies, one must remember to fulfil disclosure obligations, the failure to do so may result in the inability to vote with some or even all of the shares held.

Author

Agata Bączkowska

Adwokat, Senior Associate

She specializes in commercial and civil law. She has gained experience in Warsaw law firms providing comprehensive services to companies and a law firm specializing in labor law. She has extensive experience in corporate consulting. She has participated in mergers and acquisitions at every stage of the process, from pre-transaction legal examination to fulfillment of regulatory requirements related to the transformation process. She prepares and reviews contracts entered into by clients and advises in cases of…

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