GUINEA Law and Practice Contributed by: Yves Constant Amani, YAC & Partners
According to Article 672 of the AUSCGIE, a court-appointed merger auditor must provide an independent report on the exchange ratio and valuation methods used in the transaction. Additionally, Article 674 requires that sharehold - ers receive access to financial reports and expert assessments before voting on the transaction. Companies also rely on legal advisors to assess regulatory risks and financial advisors for valu - ation and due diligence. External accountants or auditors may be engaged to validate finan - cial data and ensure transparency in the merger process. These measures help directors mitigate liability and protect shareholder interests. 8.5 Conflicts of Interest Conflicts of interest involving directors, man - agers, shareholders and advisers have been subject to judicial and regulatory scrutiny under OHADA law. Under Article 438 of the AUSCGIE, transactions between a company and its directors, general managers or shareholders holding at least 10% of the capital require prior board approval to prevent conflicts of interest. If such transactions are unauthorised or detrimental to the compa - ny, they may be annulled under Article 444, and those involved can be held personally liable for financial losses suffered by the company. Additionally, Article 853-14 requires the statu - tory auditor to prepare a special report on agree - ments between the company and its executives, significant shareholders or related parties. If such agreements cause losses, courts may hold the responsible parties financially liable. Non-compliance with these rules can result in litigation, annulment of transactions, financial
penalties or director liability claims. These provi - sions promote corporate transparency and fair - ness in handling conflicts of interest.
9. Defensive Measures 9.1 Hostile Tender Offers
While OHADA law does not prohibit hostile takeovers, the corporate governance framework in Guinea makes them difficult to execute in practice due to various protective mechanisms embedded in company laws. Key barriers include the following. • Pre-emptive rights: existing shareholders often have pre-emptive rights, allowing them to purchase newly issued shares before external investors, thereby limiting the ability of an outsider to gain control through share purchases. • Share transfer restrictions: companies can introduce statutory restrictions on share transfers, requiring board or shareholder approval before a significant stake is sold. • Board discretion: the board of directors often plays a central role in approving or rejecting significant transactions, and defensive strate - gies such as staggered boards or golden shares can deter hostile bids. • Sectoral approvals: certain industries, such as banking, telecommunications and mining, require regulatory approvals for significant share acquisitions, further complicating hos - tile takeovers. Although legally possible, hostile takeovers are rare in Guinea due to these governance pro - tections, and most acquisitions occur through negotiated transactions rather than unsolicited bids.
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