BRITISH VIRGIN ISLANDS Law and Practice Contributed by: Matthew Cowman, Alex Drysdale, Rosalind Nicholson and Omonike Robinson-Pickering, Walkers
scrutiny, which may include a consideration of the impact of the transaction on the BVI market. 2.5 Labour Law Regulations It is rare for there to be employees physically based in the BVI in an international M&A transac - tion involving a BVI company, but where that is the case, the Labour Code, 2010 (as amended) may apply in respect of such employees. 2.6 National Security Review There are no national security reviews of acquisi - tions in the BVI. 3. Recent Legal Developments 3.1 Significant Court Decisions or Legal Developments One of the most significant cases of recent years was Nettar Group Inc v Hannover Holdings SA (December 2021), where the BVI court consid - ered whether a dissenting shareholder is entitled to dissent in respect of shares they acquire after the date prescribed for giving written notice of election to dissent pursuant to Section 179(5) of the Business Companies Act. The court held that, on a proper construction of the legislation, the dissenting shareholder’s entitlement to be bought out at fair value extends only to its exist - ing, registered membership in the company at the date of its election to dissent and not to any shares it does not hold at that date. There have also been two cases that considered the proper approach the BVI court must take in determining whether the directors of a company have exercised their fiduciary powers for a prop - er purpose: Nam Tai Property Inc v West Ridge Investment Company Limited (March 2021 and, on appeal, October 2021) and Ace Lead Prof - its Ltd v Hollysys Automation Technologies Ltd
(September 2021). In the Hollysys case, the directors of a NASDAQ-listed company had exercised their power to make amendments to the company’s M&A in the face of a hostile take - over bid. The court found, as a matter of fact, that the purpose for which the relevant amend - ments had been made was not, as the claimants had contended, to defeat the bid and did not therefore infringe the proper purpose rule. 3.2 Significant Changes to Takeover Law There have been no significant changes in the last 12 months. 4. Stakebuilding 4.1 Principal Stakebuilding Strategies In the case of a tender offer, it is customary for a bidder to build a stake in the target prior to launching an offer. Tender offers with respect to BVI companies that are listed on a stock exchange are more common in hostile or com - petitive scenarios, as board approval is not required to commence a tender offer, unlike the other mechanisms for implementing public M&A involving a BVI target company – ie, the BVI stat - utory merger regime, schemes of arrangement and plans of arrangement – where board support is necessary in each case. 4.2 Material Shareholding Disclosure Threshold Except as mentioned below, there are no spe - cific BVI disclosure requirements or filing obliga - tions with respect to material shareholding dis - closure triggers, although the disclosure rules of the applicable stock exchange will apply. Unless a BVI company falls within an exemption, it is required to take reasonable steps to identify its beneficial owners and to report information
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