MOLDOVA Law and Practice Contributed by: Oleg Efrim, Ina Jimbei and Mihail Pitușcan, Efrim Rosca & Associates
In regulated sectors, such as banking and insurance, the governance framework is more structured. Banks and insurance undertakings are required to maintain mandatory board-level committees (eg, audit, risk or remuneration committees) under prudential supervi - sion rules. 8.3 Business Judgement Rule The 2019 reform of the Civil Code expressly codified the business judgement rule in Moldovan law. Under this rule, directors are not liable for business deci - sions that later prove disadvantageous. Liability arises only when a director acts in bad faith, in a conflict of interest, without adequate information, or in manifest disregard of the company’s interests. Courts may not reassess the economic expediency or commercial opportunity of a transaction. Judicial scrutiny is limited to verifying whether the director act - ed within the limits of their authority, on an informed basis, and with the diligence of a prudent administra - tor. If a breach is alleged, the director may avoid liability by showing that the decision was made in good faith, on sufficient information, and with a rational belief that it served the company’s interests. Although takeover-specific litigation remains limited, the codified business judgement rule indicates that courts should defer to the board’s commercial assess - ment, provided the rule’s procedural and substantive safeguards are satisfied. 8.4 Independent Outside Advice In business combinations, directors commonly seek independent legal advice from external counsel. Such advice typically addresses corporate authority, transaction structuring, contractual exposure, regula - tory approvals, litigation risks and change-of-control implications. In larger or more complex transactions, boards may also retain financial advisers to assist with valuation analysis, transaction pricing and financial structuring. Audit firms are frequently involved in financial due dili - gence, while tax advisers play a central role in opti -
mising deal structure, particularly in cross-border or high-value transactions. Formal fairness opinions are not a standard feature of the Moldovan market. However, obtaining inde - pendent professional advice is regarded as sound governance practice and supports the application of the business judgement rule by demonstrating that directors acted on an informed and diligent basis. 8.5 Conflicts of Interest Conflicts of interest involving directors, managers or significant shareholders are expressly regulated under Moldovan corporate law. The framework imposes mandatory disclosure obligations and requires con - flicted persons to abstain from deliberation and voting on the relevant matter. Failure to comply may result in civil liability and, in certain circumstances, the annul - ment of the underlying corporate resolution. Although the legal regime is clear, judicial practice addressing conflicts of interest in takeover or business combination contexts remains limited. In most cases, such issues are managed through internal corporate procedures, shareholder challenges or, where appli - cable, regulatory oversight. In regulated sectors, such as banking and insurance, supervisory authorities may scrutinise conflicts of interest more closely as part of governance and fit- and-proper assessments. Moldovan capital markets legislation does not prohibit hostile takeover bids. The statutory framework gov - erning public offers applies uniformly, irrespective of whether the target’s management supports the trans - action. In practice, however, hostile bids are highly uncom - mon. The Moldovan market is characterised by concentrated ownership structures, with controlling shareholders typically holding decisive stakes and limited free float available for market-based accumu - 9. Defensive Measures 9.1 Hostile Tender Offers
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