New rule for approval of investments

The Greek Parliament has approved a new rule requiring the consent of the Interministerial Committee on Privatisations for any person (other than the Greek State) acquiring 20% or more of the voting rights of a company of national strategic importance (being now or having been in the past a monopoly, particularly when such issuer owns or controls or manages national infrastructure networks). The approval is granted when certain criteria specified in the law are met. Furthermore, the Minister of National Economy must approve a number of important decisions (described in the law, e.g. merger, dissolution etc.) of the same companies, for these to have legal effect. The approval must be granted within 30 days of the request. This new rule constitutes an attempt by the Greek Government to contain a build-up of a non-friendly stake by a private equity fund in the National Telecom Operator (OTE).

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Implementation of MiFID

MiFID came into force in Greece on 1 November 2007. On that day, the Capital Market Commission issued various decisions implementing Directive 2006/73, on matters such as business conduct rules, organisation requirements and others provided by the Greek MiFID law 3606/2007, as well as a first set of guidance notes. Full compliance of Greek firms with the requirements of the new law and decisions is expected to require several weeks, if not months.

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Administrative Court of Appeals Decision - Extension of Takeover Offer
A recent decision of the Athens Administrative Court of Appeals temporarily resolved a conflict between a Greek listed company and various funds holding minority stakes, which had also implicated the Capital Market Commission. Since funds are holding stakes in excess of the minimum threshold (10%) that would have permitted the operation of squeeze-out provisions, the company attempted a so-called 'cold delisting' by way of a statutory cash-merger with a non-listed company - an operation permitted by Greek corporate law. Recent capital market rules recognized the practice, but required a prior takeover offer and the use of an independent advisor to evaluate the listed company. The minority shareholders alleged that the advisor used was not independent and that the offer should be judged as illegal, challenging CMC decisions on the subject. They also claimed that the practice and rules authorizing it were contrary to European law. The Court rejected these arguments and allowed the offer to proceed, but the funds have vowed to continue with further litigation, even after the merger has been consummated.

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Covered Bonds

An Act recently issued by the Governor of the Bank of Greece sets forth the framework for the issuance by Greek credit institutions of covered bonds, i.e. bonds secured by specific assets of the banks - as provided for in detail in the Act. The bonds may be issued either by the banks directly or through subsidiary companies, the risk at all times, however, remaining with the bank. The new regime for covered bonds had been authorised by the banking law 3601/2007 issued last summer. The law also provides for the possibility to use Greek assets as security for covered bonds issued by credit institutions established in other EEA countries.

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Transparency Directive level-2 measures

On 4 July 2007, the CMC issued a decision implementing the level-2 measures for the Transparency Directive into Greek law. It also published circular nr. 33, clarifying the details of the new rules. These include the following:
- disclosure must be made by investors to both the issuer and the Capital Market Commission;
- a sample form has been approved for use by shareholders making disclosures containing the information required by the law;
- existing shareholders must disclose their disclosable holdings under the new law by 30.9.2007, unless they have already announced based on the previous P.D. 51/1992;
- if there is a purchase and sale of stock on the same day, then the crucial percentage is the one held at the end of the day, i.e. there is no need for a double announcement. Transparency Directive bill approved by Greek Parliament The bill transposing into Greek law the provisions of the Transparency Directive has been approved by the Greek Parliament.
The bill was published in the Government Bulletin on May 1, 2007 as law 3556/2007. The new law is set to become effective two months after its publication in the Bulletin, i.e. 1 July 2007. Before this date, a decision of the Capital Market Commission is expected to be issued introducing the level-2 measures of the Directive. The main changes are the introduction of new disclosure thresholds of 15% and 25%, the possibility of 'passive' breach of threshold following corporate action, new rules on aggregation and extension to the time limit for submission of a notification from one (1) trading day to three (3).

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Amendments to basic Greek corporate law

A new law recently approved by the Greek Parliament introduces many important changes to law no. 2190/1920 on Greek societes anonymes. The changes are mainly to strengthen minority rights and allow for the use of technology in corporate meetings e.g. to facilitate shareholder participation and representation in shareholders meetings etc.