The Regulatory Council of the Regulatory Entity for the Media (ERC) last Monday signaled the immediate suspension of the exercise of the voting rights of Media Capital’s newly qualified shareholders if they do not allay “valid” doubts about the companies’ identities. entities that effectively hold these interests in the media group, which owns TVI.
ERC believes that there are ‘legitimate doubts’ about the current identity of the new qualified shareholders – holdings greater than 5% – of Media Capital and has therefore decided to notify them under the Media Transparency Act of the lack of transparency of ownership of qualifying holdings (or voting rights of more than 5%).
These shareholders have ten days to submit evidence to the ERC, or to take steps to ensure transparency in the ownership of the respective qualified positions.
Now, the discussion continues, “if” this evidence or measures are not accepted by the ERC “, there is the possibility of an immediate suspension of the exercise of voting and equity rights inherent in the qualifying holdings in question, and there is is still the deposit of property rights in an open individualized account, and their movement during suspension is prohibited.
The shareholders concerned were the companies that acquired qualifying stakes in the Portuguese media group during the sale process of Vertix in Media Capital, which ended on 3 November this year. They are Mário Ferreira’s Pluris with 30.22%, Triun with 23%, BizPartners with 11.9725%, CIN with 11% and ZenithOdissey with 10%.
Why does ERC have ‘reasonable’ doubts about the ownership of qualifying holdings in Media Capital?
The issue is legally complex. ERC filed an administrative violation on October 15 against the sale of 30.22% of the capital held by Vertix in Media Capital to Pluris because it believed there were ‘strong signs’ of unauthorized domain change via radio and television operators operating under license from the media group.
However, in the course of this administrative procedure, the ERC may conclude that the buying and selling company has deficiencies that affect its legal right to exist. Such defects which could cause the business between Vertix and Pluris to be declared null and void and which will lead to the respective legal ineffectiveness.
Invalidity and annulment are two shortcomings in the will to negotiate that, when declared, ‘destroy’ the consequences of legal transactions. However, nullity is “more serious” as it is not salable and will retroactively cause “annulment” of legal effects. That is, it goes back to the date of the legal fact that led to it. In the case of the purchase and sale contract between Pluris and Vertix, if declared null and void, it would cease to be in effect until May 14, the date on which it was concluded.
Both the one and the other – nullity and voidability – raise “ at least ” well-founded doubts for the ERC about the validity of the current ownership of the holdings in the Measurement Capital Group and, indirectly, of all its subsidiaries, including radio and TV. television operators, as well as their domain ”.
What would be the result? The ERC replies that “the ultimate inefficiency of the transfer of ownership of qualifying holdings (more than 5%) could result in a reversal of ownership” of the holdings in Media Capital.
For this reason, the regulatory body defends, which “makes the actual holder of that participation – the alleged purchaser or the previous holder insecure” in the current instructional phase of the administrative offense process.
In other words, the deal between Pluris and Vertix, if declared null and void or voidable, not only “nullifies” the legal effect, but also restores the legal situation that would have existed if this agreement had not been signed. However, as the administrative procedure is underway, the (legal) question remains who the actual holder of the 30.22% stake in Media Capital would be: Pluris or Vertix.
ERC raises two more doubts. On the one hand, a general meeting of the Media Capital Group is scheduled for Tuesday 24 November. It is a meeting in which “the (new) holders of social participation are expected to exercise rights on which the ongoing investigation depends”.
On the other hand, the Securities Market Commission (CMVM) last week forced Pluris to issue a takeover bid (OPA) on the total capital of Media Capital over which it has no control – 69.78% of the capital – because it were of the opinion that Pluris and Vertix jointly exercised a dominant influence over Media Capital.
In this sense, the ERC continues, “the necessarily uncertain end result of this mandatory takeover bid plus uncertainty linked to the validity of ownership (of the majority) of the capital represented at the General Assembly” taking place tomorrow.
For this reason, the ERC concludes that “there are necessarily” legitimate doubts “about the identity” of entities that actually have qualifying holdings “in Media Capital.
ERC requests that the work not be performed at the general meeting
In addition to the possible suspension of voting and share rights inherent in the holdings in question, ERC warns that it will not recognize any decision made at the general meeting regarding “a change of domain, of the media radio and television Operators. Capital ”because they require prior approval.
Thus, the regulator concludes, imposes on the governing bodies, in particular the chairman of the board of the general meeting, the duty “to not carry out the work or decision making that renders the spirit or effects of the law impracticable. to allow, emphasizing the unavailability of the law. ignorance, after notification, for all audiences ”.