Proxy Voting and Vote Selling
Corrs Chambers Westgarth
University of Sydney - Faculty of Law
July 1, 2009
Keeping Good Companies Journal of Chartered Secretaries Australia Ltd, Vol.61, No.6, p. 332, July 2009
In a more democratised equity ownership model, ought vote selling be outlawed on ‘public policy’ grounds or would such a ban limit legitimate transactions. The paper suggests that there is no need to change the Australian legislative environment to accomodate some limited examples of aberrant behaviour existing rules.
When liquidity is combined with control, detaching voting rights from cash-flow rights might lead to some strange results because the usual monitoring imperatives are distorted. However on a more rigourous analysis the existing Australian legal devices is designed to minimise the abuse of voting power such as the related party provisions are more than adequate to control most forms of aberrant behaviour. We see no particular evil with stock lending arrangements and "vote renting" to secure voting rights to influence the outcome of a company vote.
Number of Pages in PDF File: 6
Keywords: vote renting, voting rights, agency principle, fraud on the minority, voting agreements
Date posted: July 23, 2009
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