IRAQ Law and Practice Contributed by: Ahmed Al-Janabi, MENA Associates in association with Amereller
Procedure A shareholder may nominate a person or a lawyer to vote and sign on their behalf through a legally issued power of attorney (POA). This approach ensures that shareholders can partici - pate in meetings and decisions even if they are unable to attend in person. 6.10 Squeeze-Out Mechanisms Squeeze-Out Mechanisms and Short-Form Mergers in Iraq No statutory provision Iraqi law does not regulate the tendering process, and therefore, no statutory mechanisms such as squeeze- out or short-form mergers exist. Implications In the absence of legal provisions, buyers must nego - tiate with non-tendering shareholders on a case-by- case basis if they wish to acquire their shares. 6.11 Irrevocable Commitments Iraqi law does not allow obtaining irrevocable commit - ments from principal shareholders to tender or vote in a particular manner. Under Iraqi law, the share transfer process does not involve a traditional tender or bid approach. Instead, the transaction is made public when the share transfer is filed with the Companies’ Registrar. This filing date marks the official disclosure of the bid. 7.2 Type of Disclosure Required Disclosure Requirements for the Issuance of Shares in a Business Combination In cases where mergers lead to the issuance of new shares, a full disclosure of all financial, legal and administrative records by the parties is required. This comprehensive disclosure ensures transparency and supports the due diligence process for regulators, investors and other stakeholders. 7. Disclosure 7.1 Making a Bid Public Public Disclosure of a Bid in Iraq
The process is governed by the Iraqi Companies Law, which outlines the procedures for share transfers with - out incorporating tender offer conditions. 6.6 Requirement to Obtain Financing Financing Conditions in Business Combinations Under Iraqi law, the full value of the shares in the target company must be paid in cash. No financing is per - mitted by law. Consequently, a business combination cannot be made conditional on the bidder obtaining financing. 6.7 Types of Deal Security Measures Enforcement of Share Transfers If the seller does not close and sign the share transfer after all conditions have been met, the buyer can seek a court judgment to enforce the transfer. Other Deal Security Measures Provisions such as break-up fees, match rights, force- the-vote provisions and non-solicitation clauses are not common practice under Iraqi law. Interim Periods There have been no recent regulatory changes affect - ing the length of interim periods. 6.8 Additional Governance Rights Shareholding Influence Control is primarily determined by the percentage of shares held by the bidder. Manager Appointment Rights Bidders can negotiate for the right to appoint the com - pany manager. The manager is key to operating and managing the company, and this appointment right can effectively enhance the bidder’s influence over the target. These additional governance rights allow a bidder to increase its control over the target company even without obtaining 100% ownership. 6.9 Voting by Proxy Permissibility Shareholders are allowed to vote by proxy in Iraq.
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