FINLAND - Proposals to amend the corporate structure and strategy of telecoms operator Elisa have been opposed by Finland's largest private sector pension insurers.
Novator's proposals to the extraordinary meeting of shareholders in January include releasing the current members of the board of directors from their office, election of a new board of directors and amendment of the Articles of Association, including the structure and strategy of the group.
The proposed amendment would allow the newly elected board of directors to initiate the necessary actions for the restructuring of the company and its operations, which could include the establishment of a subsidiary into which all of the operative business of the company would be transferred.
Novator believes that such structure would increase the flexibility of the company's management and operations, financial structure, risk profile and future direction and would therefore be beneficial for the company and its shareholders.
But in a statement, the pension funds said the proposal would have an adverse effect on the quality and procedures of future corporate governance at Elisa.
It said the proposed amendment could shift significant decision-making power from Elisa's shareholders to the board. As a result, a 10% minority shareholder could in practice gain control over Elisa's decision making.
Risto Murto, chief investment officer of Varma, said: "Novator has justified [the changes] with the need of Elisa to more aggressively pursue international expansion.
"We are strongly of the view that value creating and rapid international expansion can be achieved equally well with the current company structure. Furthermore, Novator has provided no details or real substance as to what the aggressive international expansion they refer to would be.
"We will strongly support Elisa´s current board, strategy, and corporate governance and call all shareholders to oppose Novator´s hurried initiative at the EGM in January. There are no reasons for releasing the current board, and since Novator has not presented any constructive plans for the benefit of the company and its shareholders, we will vote against their proposal."
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