With eight other institutional shareholders, representing more than 1% of the capital of Orange, the French activist fund PhiTrust Active Investors, advised by Proxinvest, has just tabled on the agenda of the 27 May 2015 General Meeting of Orange a new resolution calling for the retention of the single voting right in the articles the company.
This is another new external resolution Phitrust in the debate resulting from the “Florange law” of 29 March 2014 which generalizes the double voting rights for registered shares as a default regime for French listed companies. The legislator has allowed the opportunity for companies to deviate from these provisions by the vote of a specific resolution in general meeting in 2015 to maintain the provisions relating to simple voting law, restoring the “one share – one vote”.
The double voting rights does not meet the proportionality between the capital invested by a shareholder and his voting rights at the AGM.
As aresult in 2014 out of 6 252 resolutions analyzed by Proxinvest at 369 companies there were only 56 resolutions rejected (less than 1%) and some 32 other resolutions at 12 French listed companies should not have to be adopted without the game of double voting rights to controlling shareholder. In short, in France,the number of rejected resolutions should be 50% higher than that observed!
Moreover, this creates a distortion between shareholders since obtaining it requires the registration of registered shares, cumbersome and expensive, a deterrent to foreign investors, pension fund or UCITS, which does not allow them to benefit from these double voting rights.
Contrary to the intention of the law – that PhiTrust Active Investors shares with many shareholders and co-depositor of this resolution – which would encourage long-term investment, we can only see that the device does not facilitate long holding securities. Other more suitable methods exist to retain shareholders.
The adoption of double voting rights only encourages investors wishing to exercise control of a listed company without paying a control premium. This is shown by the recent history of several companies in the CAC40.
PhiTrust Active Investors demand to Orange shareholders vote FOR the resolution calling for maintaining simple voting which ill be published in the company register on May 6, 2015
Call Denis Branch in Phitrust at +33 (0) 1 55 35 07 54 or send him a message for more information.
PARIS April 27, 2015
