The Court of Justice of the European Union explained that representatives of companies under sanctions are not allowed to participate in general meetings of shareholders.
The Court of Justice of the European Union has published material on the case C-465/24, in which the SBK Art company, controlled by the Russian Sberbank, participated.
The company owns the depositary receipts of the Dutch holding company Fortenova, which controls a large retail chain in Croatia. Based on the possession of the receipts, the company tried to get to the shareholders’ meeting (after sanctions were imposed on Sberbank), but its representatives were not allowed there.
In its judgment, the Court rules that the freezing of funds 6 prevents, absolutely and unconditionally, a holder of depositary receipts, or a person or entity associated with him, her or it, from attending a general meeting of shareholders and from voting in that meeting.
The Court justified its decision by explaining that certificates representing securities constitute funds. The exercise of the rights to attend, and vote in, a meeting of the holders of those certificates conferred by such certificates constitutes an act of use of those certificates which, as such, must be classified as ‘use of funds’.
