Question

Investor A holds 42% of voting rights in TargetCo; the remaining shares are widely dispersed with no other holder above 3%. Investor A also has substantive rights to appoint key management and provides essential funding via an exclusive facility. Historic meetings show passive minority participation and A’s proposals always pass. Should Investor A consolidate TargetCo and on what basis?

A No—control requires >50% voting rights.
B Yes—de-facto control via dominant voting interest and dispersion of others.
C No—funding arrangements are protective rights only.
D Yes—power via potential voting rights only.
E No—needs a board majority plus >50% votes.
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