MACAU SAR, CHINA Law and Practice Contributed by: João Nuno Riquito, Bruno Almeida, Belmiro Leong and Kimberley Cheong, Riquito Advogados
the enforcement of various rights, such as the right to information or to seek liability against directors. Shareholders and their respective advisers are aware of the existence and enforceability of the above rights and make use of them as necessary or convenient. It is a common situation in the day-to-day business of Macau companies that shareholders with majority voting rights (or majority shareholders) take decisions that may not suit the interests of the remaining share- holders, while minority shareholders may either group with others to vote differently or use eventual blocking rights in matters that require qualified majorities. 11.3 Shareholder Activist Strategies The most common interest shareholders pursue is to secure a majority of the capital, or at least a majority of the voting rights, in order to take decisions on key matters of the company to the extent permitted by law and the articles of association, and/or to appoint the companies’ governing bodies. Access to information is also a key goal of shareholders, particularly in order to assess the adequacy of the management’s conduct and financial results. The nature of their agenda may be financial (increas- ing their share in the company’s annual net profits, or blocking a capital variation) or non-financial, as would be the case of pursuing a company’s restructuring or blocking certain major transactions. One of the strategies that shareholders may adopt to build their stake in a company is to establish a shareholders’ agreement among those who can form a majority, or a blocking minority, in the company. Please refer to 1.7 Shareholders’ Agreements/Joint Venture Agreements regarding the matters that can and cannot be covered by such agreements, as well as the terms of respective enforceability. Beside shareholders’ agreements, other strategies that can be used by an activist shareholder to increase their stake in the company include procuring changes in the company’s management team or provoking – and voting in favour of – a capital increase when they expect the remaining shareholders (or a significant part of them) will not be able to exercise their right to
contribute pro rata, or will not be interested in doing so, and will therefore be diluted. 11.4 Recent Trends No particular industries or sectors have been targeted by activist behaviour recently. Although it may happen in the near future, there is currently no stock exchange in the Macau SAR, so local companies are not targets in view of the vari- ation of their stock price. The holding companies of several high-profile Macau-based companies, such as the gaming concessionaires, are listed on the Hong Kong Stock Exchange, but there have not yet been any reports of them being the subject of any such activism. 11.5 Most Active Shareholder Groups There are no particular active groups or active share- holders, as the phenomenon is not a feature in the Macau SAR. These are matters of a private nature for private entities, and there are only rare cases of public attention in their respect. 11.6 Proportion of Activist Demands Met No particular data has been released in respect of the fulfilment of activist demands in the Macau SAR. 11.7 Company Prevention and Response to Activist Shareholders The position or mechanisms available to the company vary with the particulars of the interests and agenda of the shareholders in question. The company must assess whether the shareholder is misusing or misrepresenting certain corporate rights. If the shareholder is found to be rightfully exercising their rights, the company shall endeavour to comply with the relevant provisions set forth in the law and the articles of association. Similarly, when shareholders make decisions on man- agement matters in a legal and binding manner, direc- tors shall comply with such decisions, and adequately and conveniently implement them. In matters that substantially affect the company’s business, management members shall act in a rea-
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