CHILE Law and Practice Contributed by: Ignacio Errazquin, Adolfo Romero and Florencia Anguita, CMS Carey & Allende
selective disclosure to or preferential treatment of any bidder. 9.2 Special or Ad Hoc Committees It is common for boards of directors to form special committees when certain directors have conflicts of interest or when the transaction qualifies as a related- party operation. These committees review the trans- action terms, may appoint independent advisers, and issue a written report. In listed infrastructure companies, such committees often include directors appointed by minority share- holders. 9.3 Role of the Board The board of directors plays an active oversight role in public M&A, but the role of board members is for- mally limited to recommending for or against the bids. Defensive tactics (eg, issuing new shares or adopting poison-pill-type structures) are rare in Chile, owing to pre-emptive rights and statutory merger rules ‒ although the board may consider alternative transac- tions.
Shareholder litigation remains limited, but Article 133 bis of the Corporations Law allows shareholders rep- resenting at least 5% of the company’s shares (or any director) to bring a derivative action to seek damages on behalf and for the benefit of the company for losses arising from breaches of law, by-laws, board regula- tions, or CMF rules. In addition, Article 134 bis of the Corporations Law establishes criminal liability where a controlling shareholder or the majority of the board adopts an abusive resolution to benefit themselves or a third party to the detriment of other shareholders and without benefit to the company. The CMF also has administrative sanctioning powers for breach of fiduciary or disclosure duties. 9.4 Independent Outside Advice Boards customarily retain legal, financial and technical advisers to support their evaluation of a takeover or merger. Fairness opinions are considered best prac- tice, especially in related-party or management-led transactions. Advisers must be independent and dis- close any conflicts of interest. In energy and infrastructure deals, boards often request technical reports on concession compliance, interconnection, and regulatory risk from sector spe- cialists or independent engineers, alongside financial valuations.
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