Invalid Exercise of Voting Rights by a Controlled Employee Benefit Foundation

Facts

In this case, the issue concerned a public limited company (A. AG), whose shareholders were B.B., her children C.B. and D.B., as well as the employee benefit foundation of A. AG. The foundation board of the employee benefit foundation was appointed by the board of directors of A. AG and was not composed of equal representation.

At an extraordinary general meeting of A. AG, C.B. voted not only with her own shares, but also with the 40 shares of the employee benefit foundation. B.B. and D.B. protested against this exercise of voting rights by C.B. for the employee benefit foundation.

Considerations

The Federal Supreme Court decided that the voting rights from the shares of the employee benefit foundation are suspended, as it is controlled by A. AG. Appropriate structural measures would have been required to ensure the effective and permanent independence of the foundation board in order to exercise the voting rights.

Since these requirements were not met, the exercise of voting rights by C.B. for the employee benefit foundation was unauthorized. This led to the possibility of challenging the…