ETALON GROUP PLC (« Etalon Group, » or « company »), one of Russia`s largest and oldest established development and construction companies, announces that it has signed a relationship agreement (« relationship agreement ») with Capgrowth Investments Limited (« Capgrowth »), a subsidiary of Sistema PJSFC (« Sistema »), which yesterday announced the acquisition of 25% of the share capital of Etalon Group (in the form of Global Depository Receipts) from the family of the founder of Etalon Group, Viacheslav Zarenkov, making Sistema the largest shareholder of Etalon Group. The Relationship Agreement defines the key elements of the relationship between the two parties, with an emphasis on maintaining high standards of corporate governance and ensuring that the parties continue to act in the best interests of all Shareholders of the Stallion Group. The ACF stated in PS14/8 that the purpose of the independence provisions was not to prevent controlling shareholders from cooperating fairly with a company or to prohibit them from not agreeing legally. The provisions would not prevent shareholders from exercising their rights as shareholders, but would prevent them from exerting influence in an abusive manner and in a manner detrimental to minority shareholders. In particular, the FCA explicitly states that it does not consider that the acceptance or bid of a takeover bid, the sale of an irrevocable business or the acquisition of market shares related to a takeover bid will not be considered prevented by the independence provisions. The rule that an applicant applying for a list of bonuses must prove that he or she controls a large part of his assets has been removed, so that only the condition of being able to prove to the company that it can exercise as a primary activity is removed. The list rules also identify factors that may indicate that a new applicant does not meet this requirement. Whistleblower obligation – Premium publicly traded companies are now required to immediately notify the ACF of a breach of certain outstanding obligations. These include the obligation to manage an independent company and, where appropriate, to have a relationship agreement and a dual voting structure for the election of independent directors. The obligation to enter into a relationship agreement is defined in the new LR 6.1.4ER (1). The meaning of a « controlling shareholder » will be identical to the previous definition of listings prior to 2005. In addition, a new LR 9.2.2AR (1) requires an issuer to have a relationship agreement with all controlling shareholders for the duration of its listing (not just at the time of admission). Although in many respects it presents a codification of existing best practices, the proposed Regulation provides for a return to the pre-2005 position, in which the list rules explicitly contain the obligation for the issuer of a controlling shareholder to conduct its activities independently of that controlling shareholder, all transactions and relations between them being at the end and on a normal commercial basis.
This was essentially documented in a « relationship agreement » between the company and the shareholder. There are a number of areas in which your interests as founder/controller and those of the company are in conflict. Once a company is publicly traded, you must answer to the non-executive directors independent of the board of directors and you must sign a relationship agreement whereby you will have to agree with the company on the basis of an arm length.