12/2/2020
On November 13, CVM’s Collegiate Body held an appeal trial related to the inquiry carried out by the founding shareholders of Linx S.A. (“Linx”) regarding the process of the acquisition of such company by Stone (CVM Case No. 19957.005563/2020-75).
In October 2020, Linx announced to the market that it had received from its founding shareholders a letter sent by the CVM’s Corporate Relations Superintendence stating that Linx’s founding shareholders could not vote at Linx’s General Shareholder Meeting that would deliberate on a proposal for a takeover bid of Stone.
According to the position of CVM’s Superintendence, in view of the noncompetition agreement to be signed between Stone and such founding shareholders, the existence of a particular benefit to the shareholders would remain, preventing them from voting, pursuant to article 115, paragraph 1 of the Brazilian Corporation Law.
The founding shareholders, then, filed an appeal before CVM’s Collegiate Body, questioning the understanding of the Superintendence, and requesting the reversal of the decision and the consequent release of the votes of the founding shareholders.
During the trial, CVM’s President, Marcelo Barbosa, defended, on his vote, the exception that the discussion related to Article 115, paragraph 1 of the Brazilian Corporation Law is controversial within the CVM’s Collegiate Body and that the change in the body’s position over time prevents the establishment of a consolidated line of thought by the body. In turn, Director Alexandre Costa Rangel stated his opinion that the Brazilian Corporation Law does not provide the possibility of restriction at first in the case of this provision, and therefore, any conflict could only be verified later.
In conclusion, CVM, by majority of votes, granted the appeal, understanding that in the concrete case no particular benefit hypothesis would be configured under the terms of Article 115, paragraph 1 of the Brazilian Corporation Law, and, at least until that moment, no conflict of interest capable of generating the voting restriction of Linx’s founding shareholders would remain. The CVM’s Collegiate Body stressed that this authorization would not exclude the possibility of subsequent analysis regarding the regularity of the votes provided by such shareholders (thus, if such votes were made in pursuit of personal privileges to the detriment of the corporate interest).
Although the CVM Collegiate Body does not have, thus, a consolidated position as regards the voting restrictions at first for potentially conflicted shareholders, the above mentioned judgment is another important precedent of CVM that alleged impairments shall be analyzed later and on a case-by-case basis.
Coauthors: Amanda Brisolla Fernandes, Daniela Zaitz e Gabriel Grunberg Tesler
