EGYPT Law and Practice Contributed by: Mohamed Hashish, Farida Rezk, Omar Aboul-Ella and Mariam Rabie, Soliman, Hashish & Partners
11. Activism 11.1 Shareholder Activism
ny’s articles of association, the Companies Law requires the attendance of shareholders owning at least 50% of the total shares of the company. The resolutions shall be issued if approved by shareholders owning at least two-thirds of the total shares of the company; however, if the res - olutions relate to an increase of the authorised capital, a decrease of the capital, the liquidation of the company, changing the objective of the company, or merging or splitting up the compa - ny, the resolutions shall be issued if approved by at least three-quarters of the shares represented in the meeting. The shareholders may request the annulment of a resolution if the resolution in question is issued in violation of the provisions of the Companies Law or the company’s articles of association, or if the resolution is issued for the benefit or detri - ment of certain shareholders, or brings special benefit to the members of the board of directors or others without the consideration of the com - pany’s interests; however, in all cases, the Com - panies Law specifies that the annulment may only be requested by those shareholders who had objected to the resolution during the meet - ing, or who did not attend for a plausible reason. In addition, the shareholders shall have the right to have access to the company’s records and documents and to make copies accordingly. Additionally, shareholders may insert into a shareholders’ agreement and/or include in the company’s articles of association reserved mat - ters that require and shall only be implemented if approved by the affirmative votes of all share - holders. 11.2 Aims of Activists Due to the lack of activist shareholder back - ground, shareholders in Egypt do not typically push for M&A transactions, spin-offs or major
In Egypt, shareholder activism is not explicitly regulated, and accordingly it has not been com - mon in Egypt; however, shareholders’ rights are provided for under the Companies Law and the Capital Markets Law, allowing accordingly the shareholders to pursue their activism indepen - dently and protecting the minority shareholders as well. In this regard, generally, the company’s resolu - tions are issued upon the approval of the share - holders of the company. Every shareholder shall have the right to attend the general assembly regardless of the number of shares owned, discuss the matters on the agenda and vote accordingly. Furthermore, shareholders owning at least 5% of the total shares of the company shall have the right to make a request calling for an ordinary general shareholders’ meeting sub - ject to determining the agenda of the meeting; an extraordinary general shareholders’ meeting may be called to convene upon the request of shareholders owning at least 10% of the total shares of the company. This being said, the Companies Law requires a quorum for the validity of the general assem - bly meetings, whereby, for the ordinary gen - eral shareholders’ meetings, the attendance of shareholders owning at least 25% of the total shares of the company is required, unless the company’s articles of association require a higher percentage that does not exceed 50% of the total shares of the company. The resolu - tions shall be issued if approved by the absolute majority of the attending shareholders. As for extraordinary general shareholders’ meet - ings, unless otherwise stipulated in the compa -
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