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SHAREHOLDERS BARRED BY INJUNCTION MAY ATTEND MEETINGS
The issue about whether a shareholder barred by a court injunction from exercising shareholder rights may attend a shareholders' meeting is highly controversial. In a 2006 judgment, the Supreme Court held that "shareholder rights" means the rights that a company shareholder may assert against the company based on his status as a shareholder, such as the right to vote on reso-lutions. But attendance at a shareholders' meet-ing should be regarded as a shareholder's par-ticipation in the governance of the company based on his status as a shareholder, rather than as the assertion of rights. Therefore, if a share-holder is subject to an injunction barring him from exercising shareholder rights, him may still attend shareholders' meetings, but may not ex-ercise his shareholder rights, such as voting. The Supreme Court's reasoning was as follows:
Before the relevant judgment has become final, a shareholder barred by an injunction from exercising shareholder rights retains his status as a shareholder, and for the purposes of shareholders' meetings, the identity of share-holders is determined according to the records in a company's shareholders roster. Until such time as it is irrevocably confirmed that an in-dividual or entity is no longer a shareholder, that individual or entity remains a shareholder according to the shareholders roster, and as such may attend shareholders' meetings.
In order to maintain the consistency of inter-pretation, if shares affected by an injunction barring the exercise of shareholder rights are shares that should be included in the calcula-tion of the total number of a company's issued shares, then the shareholder should be per-mitted to attend a shareholders' meeting and those shares held by the shareholder should be included in the tally of shares in attendance. Otherwise, if shares barred by injunction from the exercise of shareholder rights should be included in the calculation of total issued shares, but it were also held that the share-holder could not attend shareholders' meetings and such shares could not be counted as being in attendance, this would create a marked imbalance in the calculation of the number of shares needed to convene a shareholders' meeting, which would enable minority shareholders to use injunctions as a means to manipulate the number of shares in attendance at a meeting so that the meetings could not be duly convened.
If a shareholder barred by injunction from exercising shareholder rights were also to be barred from attending shareholders' meetings, this might prevent the resolutions from being invoked in a timely manner, which might ad-versely impact the company's business, and thus would conflict with the legislative intent of protecting the public interest.