ARMENIA Law and Practice Contributed by: Hayk Hovhannisyan and Suren Sloyan, HAP
Reorganisation or Liquidation Claims Shareholders may bring claims if the com - pany’s reorganisation or liquidation process is conducted unfairly, improperly or in violation of their rights. Mismanagement or Improper Use of Company Assets Claims may be brought if directors misuse com - pany assets, engage in excessive spending or otherwise mismanage company resources to the detriment of the shareholders. These claims may be brought before the courts in Armenia and shareholders generally have the right to seek damages, the removal of directors or the cancellation of unlawful decisions. It is important for shareholders to understand their rights and obligations under Armenian corporate law to effectively pursue these claims. 5.5 Disclosure by Shareholders in Publicly Traded Companies Legal frameworks in Armenia mandate specif - ic disclosure obligations for shareholders and beneficial owners of publicly traded companies to promote transparency and combat financial malfeasance. Shareholder Disclosure Obligations Armenian legislation requires certain entities, such as investment companies, branches of foreign investment companies, regulated mar - ket operators, corporate investment funds and investment fund managers to disclose informa - tion about their beneficial owners to the CBA. This submission aligns with the standards set by the Law “On Combating Money Laundering and Terrorism Financing” and the requirements established by the CBA’s normative legal acts.
• financial statements or other disclosures are falsified or not made available to shareholders as mandated. Fraud or Misrepresentation If the directors or the company mislead share - holders, engage in fraudulent activities or pro - vide false or misleading information (eg, during the issuance of shares or reporting company financial health), shareholders can file a claim against them for damages. Derivative Actions Shareholders can bring a derivative action on behalf of the company if directors have engaged in misconduct and the company itself has not taken action to remedy the situation. This allows shareholders to sue for damages arising from the director’s breach of duty, fraud or other wrongdoings that harmed the company. Non-Compliance with Laws and Regulations If the company or its directors violate Armenian laws or fail to comply with regulations, share - holders may claim damages, especially if the violations harm their financial interests or the company’s value. Shareholder Agreements and Contractual Claims Shareholders may also bring claims if the com - pany or directors breach specific agreements or contracts made between the shareholders or with the company, such as in cases of unfair buyout terms or non-performance of promises made in shareholder agreements. Claims for Dividends If the company fails to distribute dividends to shareholders in line with the law or the compa - ny’s charter, shareholders may claim the right to receive their share of profits.
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