Non respond of companies to hold the general assembly is one of the most significant problems of shareholders
Lawyer Hussien Al-Ghareeb has confirmed that the most significant problems facing the shareholder in the general assembly is non response to his request to hold the general assembly in order to debate the company matters or change the board of directors, despite the availability of the request conditions, and that it is possible to overcome these matters by implementing the provision of article 154 of the companies law by the articles of association.
During a lecture on the “lgal organization of general assemblies and the board of directors of joint stock companies according to the Kuwaiti commercial companies law”, organized at the Legal Training Center, he said we need to activate the legal provisions more than amending them, such as the application of the Ministry of Commerce of the provision of article 178 of the companies law.
He said: the annual date for holding the assembly shall be scheduled on the time and place scheduled without invitation by the board of directors. The board of directors shall be obliged with the annual general assembly agenda a such as the report on its management, financial statements of its position, the auditor’s opinion and so forth. If the general assembly of the company is held, this assembly loses in many cases its natural role in terms of non attendance of the shareholders affected by the acts of the board of directors. In the event of their attendance and non participation in the discussion with the board of directors and the auditor as they are not aware of the details of the financial statements, this problem requires the shareholder to actively attend and objectively debate the financial statements based on his understanding of them, and the Ministry of Commerce to actively attend in terms of the participation of a representative from the Ministry in the discussion and using the legal authority stated under article 178 of the companies law properly, in terms of requesting a report from the auditor for any of the financial matters of the company and prepare a report on part of the Ministry in light of the auditor’s report, if required. It should not suffice with presenting the report to the general assembly, in which the board of directors mostly enjoys a majority. Rather, it should go further than this , which is notifying the concerned authorities whether control or other supervisory authorities such as the central bank, stock exchange or legal authorities such as the public prosecution and the general administration for investigations.