Companies Act 2014

F432 [ Transparency and approval of related party transactions

1110O

1110O. (1) Subject to subsection (5) , when entering into a material transaction with a related party, a traded PLC shall publicly announce the transaction no later than at the conclusion of the transaction.

(2) An announcement under subsection (1) shall contain

( a ) information on the nature of the related party relationship,

( b ) the name of the related party,

( c ) the date and the value of the transaction, and

( d ) any other information necessary to assess whether or not the transaction is fair and reasonable from the perspective of the traded PLC and of the shareholders who are not a related party, including minority shareholders.

(3) ( a ) Subject to subsections (4) and (5) , a traded PLC shall not enter into a material transaction with a related party without the transaction being approved, prior to the conclusion of the transaction, by a resolution of the traded PLC in general meeting.

( b ) A traded PLC shall ensure that the approval under paragraph (a) is carried out in a way that

(i) prevents the related party from taking advantage of its position, and

(ii) provides adequate protection for the interests of the traded PLC and of any shareholder who is not a related party, including minority shareholders.

(4) Where a related party transaction entered into, or to be entered into, by a traded PLC involves a shareholder of the traded PLC, that shareholder shall not take part in the approval referred to in subsection (3) .

(5) ( a ) Subsections (1) to (3) shall not apply to

(i) a transaction entered into in the ordinary course of business and concluded on normal market terms,

(ii) transactions entered into between a traded PLC and its subsidiary, or a number of its subsidiaries, provided that

(I) the subsidiary or subsidiaries are wholly owned by the traded PLC, or

(II) no related party of the traded PLC has an interest in the subsidiary or subsidiaries, as the case may be,

(iii) transactions regarding remuneration of directors, or certain elements of remuneration of directors, awarded or due in accordance with section 1110M , or

(iv) transactions offered to all shareholders on the same terms where equal treatment of all shareholders and protection of the interests of the traded PLC are ensured.

( b ) In subparagraph (iii) of paragraph (a) , director has the same meaning as it has in section 1110M .

(6) ( a ) The directors of a traded PLC shall, as soon as practicable, establish an internal procedure to assess whether or not transactions are entered into in the ordinary course of business and concluded on normal market terms for the purposes of paragraph (5)(a)(i) .

( b ) A related party shall not take part in an assessment under this subsection.

( c ) Notwithstanding section 1110L(2) , in this subsection directors shall be interpreted in accordance with section 2(1) .

(7) When a related party of a traded PLC enters into a material transaction with a subsidiary of that traded PLC, the traded PLC shall publicly announce the material transaction no later than at the conclusion of the transaction.

(8) A traded PLC shall ensure that all transactions with the same related party that have been concluded

( a ) in any 12-month period, or

( b ) in the same financial year,

are aggregated for the purposes of assessing if the transactions, when aggregated, constitute a material transaction.

(9) This section is without prejudice to the rules on public disclosure of inside information as referred to in Article 17 of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC 12 .

(10) This section is in addition to, and not in substitution for, the provisions of this Act, or the general law, that constrain, in certain circumstances, dealings in property of a company and that provide for remedies in certain cases where those constraints are not observed.

(11) In this section

class test means any one of the 4 tests set out in Schedule 21;

material transaction means a transaction in which any percentage ratio, calculated in accordance with one or more class tests, is 5% or more;

percentage ratio means, in relation to a transaction, a figure, expressed as a percentage, that results from applying a calculation under a class test to the transaction;

related party transaction means a transaction between a traded PLC and its related party. ]

Annotations

Amendments:

F432

Inserted (30.03.2020) by European Union (Shareholders’ Rights) Regulations 2020 (S.I. No. 81 of 2020), reg. 7, in effect as per reg. 1(3).