Edita Čulinović-Herc

IS THERE A NEED FOR A REVISION OF THE CONTROL THRESHOLD IN CROATIAN TAKEOVER LAW

In the article authors analyze the control threshold set by the Croatian Takeover Act, which triggers a duty to launch the takeover bid. Authors question whether the percentage of voting rights, which confers the control, is set too low in Croatian law in light of the recent trends in European law and the law of some EU Member States. In order to obtain control in a company it is not necessary to acquire the majority of voting shares. That is why the concept of controlling the shareholder and the major shareholder differ. To become the controlling shareholder it is vital to have shares which confer voting rights in the percentage which will enable the blocking or preventing of the adoption of the most important company decisions. If the controlling block of shares is acquired in a listed company, then the holder of those shares should launch a takeover bid in accordance with the respective takeover law. With issuance of the takeover bid, a non-controlling shareholder is given the opportunity to sell his shares to the controlling shareholder at a price that should not be less than the market price. Moreover, it is highly probable that after takeover proceedings, the controlling shareholder would initiate share delisting or even squeeze out proceedings. While being the minimum harmonization directive, EU Takeover Bids Directive does not define the control threshold – it is left to the discretion of each EU Member State legislator. Until 2013, in Croatian Law there were three types of thresholds which triggered a duty to launch the takeover bid: control threshold, additional threshold, and final threshold. After 2013 amendments, the Croatian Takeover Act abandoned the concepts of additional and final threshold, but the control threshold remained the same – it was set at 25% +1 of voting rights. When comparing the adopted solution with the ones in the EU Member States, authors note that the control threshold in Croatian law is set too low. From the perspective of the controlling shareholder, it is hardly conceivable that this type of control would ensure the controlling shareholder the prevalence in all company decisions. Nevertheless, the controlling shareholder has the duty to launch the takeover bid and to offer exit to all remaining shareholders, which is costly, while the success of his offer depends on the acceptance of each and every shareholder. While having in mind the examples of Member States which have raised the control threshold, the authors question whether such an approach would be advisable to the Croatian legislator and how it goes along with raising Croatian capital market competitiveness.

Are Crowdinvesting platforms managers of alternative investment funds

Crowdinvesting is a recently emerged business practice recognised as an alternative method of raising risk capital in the early stage financing of start-ups and small enterprises. It involves a collection of relatively small amounts of money contributions from a general public, via platform operator. In return, investors acquire equity or debt financial instruments issued either by project holder seeking finance (direct crowdinvesting) or a special purpose vehicle established by the platform operator or a third party which in turn invests in financial instruments issued by the project holder (indirect crowdinvesting). Authors provide a brief insight into business models employed by the platform operators and explore whether some of those models from the legal point of view may fall within the scope of Alternative Investment Fund Managers Directive. Having in mind the broad scope of this Directive, possible legal consequences of qualifying platform operator as a manager of alternative investment fund as well as the role of the manager as stipulated in the Directive, paper examines whether the crowdinvesting entity may be qualified as ’’a collective investment undertaking’’ and whether it invests in accordance with a ’’defined investment policy’’ which are crucial prerequisites for such qualification. Possible application of the de minims exclusion as well as holding company exemption and securitization special purpose entity exemption are taken into consideration.