Criticism of virtual general meetings of DAX companies - A financial expert expresses concerns

Criticism of virtual general meetings of DAX companies - A financial expert expresses concerns

According to a report by www.faz.net,

The Investor Protection Association (SdK) has criticized the retention of virtual general meetings at DAX companies. There were technical disruptions at Siemens Energy and Covestro. Interjections and spontaneous exchanges with other shareholders are impossible. Questions submitted in advance are often too comprehensive and the answers are sometimes 300 pages long, said SdK board member Markus Kienle on Friday at the presentation of the “Black Book Stock Exchange” in Munich.

Many small companies returned to real shareholder meetings after the corona pandemic, but two thirds of large corporations retained the digital form without direct exchange. This will strengthen the position of the board of directors vis-à-vis the shareholders, said Kienle.

The SdK sharply criticized the law for the stabilization and restructuring of ailing companies: it favors creditors and is “usually associated with a total loss for shareholders, as was seen with Leoni”. The case of the Franconian auto supplier with a fundamentally good business model showed the high potential for abuse, said Kienle. The procedure was decided without the consent of the general meeting and the capital was reduced to zero. Only the major shareholder was allowed to participate in the subsequent capital increase.

According to the shareholder advocates, the processing of the Wirecard scandal is going “very unsatisfactorily”. Proceedings are progressing too slowly. Neither the auditors' supervision nor the Bavarian Supreme Court are adequately equipped. In addition, “the failure of the Munich public prosecutor’s office has still not been dealt with,” said SdK board member Marc Liebscher. The criminal trial against the Wirecard managers accused of gang fraud is “not very informative” and a final verdict is probably not expected until the end of 2027.

SdK CEO Daniel Bauer criticized the “wild west of the bond market”. Around 250 medium-sized bonds have been issued since 2010, but the default rate is “well over 20 percent”. Investors would have lost billions. Bad laws and inactive authorities allowed company bosses to rip off investors in this asset class, Bauer warned.

The conclusion of the report shows that there are still many construction sites in the area of ​​the stock market and the financial industry. The criticism of virtual general meetings, laws for the stabilization and restructuring of companies, the processing of the Wirecard scandal and the bond market shows that the financial industry is still faced with a number of challenges. These uncertainties could potentially impact the market and investor sentiment, resulting in increased volatility. It is important to keep an eye on these issues as they could affect investor confidence in the financial market.