• ALG COSOB published guidelines on prevention of major shareholding by criminals in  companies whose securities are listed on an exchange or are the subject of an offer of securities to the public.
• Document dated 14 July 2024, received from ALG COSOB on 24 July 2024.

Main Points

• Need to take due diligence and verification measures to prevent the acquisition of major shareholding by individuals/entities involved in criminal/fraudulent activities.
• Guidelines summarize the relevant national, international legal, regulatory framework.
• Thorough vetting process for any potential new shareholder acquiring a major shareholding, i.e. at least 5% of the capital of voting rights in subject companies.
• Also, for board members, directors and senior executives; vetting process should include investigations into those people criminal history and financial reputation.
• Subject companies should implement internal AML/CFT policies requiring that shareholders provide declarations on beneficial owners and the origin of funds used.
• ALG COSOB can offer guidance on best practices for background checks, data sources to consult, and procedures to follow to ensure that checks are effective and accurate.
• It may also use its cooperation channels with other national authorities to access specialized databases and confidential data to help verify the persons' background.
• Subject companies must ensure that significant transactions involving major shareholding / voting rights are transparent and, where applicable, approved by ALG COSOB.
• As such, they are required to disclose all relevant information they hold re acquisition transactions, e.g. parties involved, financial amounts, motivations behind acquisition.
• Subject companies should set up a reporting system to exchange with ALG COSOB information on individuals or entities suspected of criminal or fraudulent activities.
• They should also implement awareness and training programs for their employees in order to help them recognize the signs of a fraudulent or malicious acquisition attempt.