The rights of minority shareholders

General Authority for Investment and Free Zones has taken many steps to protect the rights of minority shareholders in companies especially when it issued the book “The Legislative and Regulatory Framework for the Protection of the Rights of Minority Shareholders in Egypt” which included all measures to protect the minority shareholders and their rights, we can summarize the content of such book as follows:

• The measures taken by the Egyptian government are a positive step towards ensuring that all shareholders have a fair and equal stake in the companies they invest in. These protections will help to attract foreign investment and promote economic growth in Egypt.
• These measures include giving shareholders the right to attend and participate in general meetings, access company documents, and ask questions of board members and auditors. Additionally, shareholders who own at least 10% of a company’s shares have the right to obtain information about the company’s dealings with its affiliates.
• These Guarantees are important for ensuring that all shareholders, regardless of their shares number, have a vote in the company and that their interests are represented, also help to promote transparency and accountability in corporate governance.

Guarantees and specific rights of minorities in corporations

The Egyptian government’s commitment to protect minority shareholders’ rights is in line with international best practices, whereby The Organization for Economic Co-operation and Development (OECD) has identified the protection of minority shareholders as one of four keys’ principles of corporate governance, here are some of the specific guarantees and rights of minorities in Egyptian companies:

1. The right to attend and participate in general meetings.
2. The right to access company documents.
3. The right to ask questions to the board members and auditors.
4. The right to obtain information about the company’s dealings with its affiliates.
5. The right to be protected from having their liabilities increased.
6. The right to discuss any matters on the agenda at a general meeting and to question the board members and auditors in respect of such matters.
7. The right to file an application with GAFI to obtain information and copies of documents relating to the commutative contracts or the dealings engaged by the company with the affiliates thereof.

These guarantees and rights are designed to protect the interests of minority shareholders and ensure that they have a voice in the company.

The principal goals of protecting minority rights in corporations

The principal goals of the protection of minority rights in companies can be summarized as follows:

• Provide main information to ensure justice and transparency;
• Nominate independent members to the Board of Directors (“BOD”) in order to enhance monitoring in the company;
• Regulate the procedures to call general meetings and the process of holding such meetings;
• Inspect the works carried out by the BOD members and the auditors.

Investors Dispute Settlement Center in Egypt

In order to settle any disputes arising between investors regardless of their shares in the capital and the legal structure of the company, the Investors Disputes Settlement Center (IDSC) was established in 2009 by the General Authority for Investment and Free Zones (GAFI) to provide a neutral and amicable platform for investors to settle their disputes.

The IDSC uses mediation as its main method of dispute resolution, which is a process where a neutral third party helps the disputing parties reach an agreement.

The IDSC has the competence to settle disputes between investors, whether they are partners or companies or between shareholders and companies, also the Center’s mediation process is confidential and cost-effective, and it allows the disputing parties to control the outcome of the settlement.

The IDSC has been successful in settling a number of disputes, and it has been praised by investors for its fair and efficient process, also the Center is a valuable resource for investors who are looking for a way to resolve their disputes without being in court.

Advantages of resorting to the Investor Dispute Settlement Center

Here are some of the advantages of using the IDSC to settle disputes:

1. The mediation process is confidential, which can help protect the company’s reputation and its commercial entity.
2. The disputing parties have the ability to control the outcome of the settlement, unlike the traditional dispute settlement methods whose results cannot be expected.
3. The mediation process is cost-effective, which can save investors time and money.
4. The IDSC has a team of experienced mediators who are trained in the art of mediation.
5. If you are an investor who is involved in a dispute, the IDSC may be able to help you resolve it, as the Center is a valuable resource for investors who are looking for a way to resolve their disputes without being in court.