Conclusions regarding the rights and equitable treatment of shareholders
Estonian law generally provides for equitable treatment of all shareholders consistent with the OECD Principles, including through its takeover law and other provisions regarding rights attached to shares. Recent legislative modifications to the Commercial Code facilitate electronic participation (and mail voting) in general meetings and clarify other provisions related to disclosure (on the web) and handling of general meetings. Information on ownership is transparently available through electronic databases, and beneficial owners are generally identifiable, making ownership reporting and takeover trigger requirements enforceable. Estonia does not possess complex ownership structures that would facilitate disproportionate rights for some shareholders compared to their shares in the company. The Estonian self-review asserts that related party transaction reporting is accurate and transparent, and not considered problematic. The review team could not determine the extent to which abusive related party transactions may actually occur in practice in Estonia. However, if such abuse does emerge as a problem, Estonia should consider strengthening its oversight by providing audit committees with responsibilities to review such transactions, and by strengthening the presence and role of independent directors on such committees.
The FSA is generally well respected but has faced difficulties in prosecuting cases of market abuse due to the challenges involved in co-ordinating with the Public Prosecutor’s Office on criminal cases, the high level of proof required to prosecute such cases, and the low level of fines that FSA may impose for misdemeanor and administrative violations. According to the FSA, work done to improve co-operation with the Public Prosecutor’s Office has resulted in significant progress in prosecuting several market abuse cases during 2009.
For SOEs, a sound structure for the respect of shareholder rights is in place, further improved by the recently enacted State Assets Act which rectifies an obstacle to equal treatment by giving all shareholders the same rights with respect to access to minutes of board meetings, with appropriate safeguards available to prevent release of commercially sensitive information.22