The manager of Norway’s NOK14.1trn (€1.2trn) sovereign wealth fund has spoken out to protect the interests of minority shareholders, saying in response to a European Commission (EC) consultation that more text is needed in its draft proposal regarding unequal voting rights.

Norges Bank Investment Management (NBIM) yesterday published its response to the EC’s proposal for a directive on multiple-vote share structures in companies seeking admission to trading on an SME growth market, saying that as an investor in listed companies, it welcomed measures that motivated companies to go public – both in the early and more mature phases of their life cycles.

“We support the European Commission’s aim to improve access to market-based financing for EU companies, and we understand that unequal voting rights may encourage founders to list early,” wrote Carine Smith Ihenacho, NBIM’s chief governance and compliance officer, and Elisa Cencig, senior ESG policy adviser in the letter.

But they said they were concerned about the consequences of unequal voting rights for minority shareholders in these cases as well as generally.

“If unequal voting rights are allowed, they should have a sunset clause which restricts the transfer of such shares or limits the structure to a defined period,” the women said.

The manager of Norway’s Government Pension Fund Global said it therefore welcomed the EC’s proposal to introduce minimum safeguards, such as the requirement for a qualified majority vote at annual general meetings, and to limit the voting weight of multiple-vote shares.

“We believe, however, that the text could introduce minimum harmonisation on sunset clauses, which are currently left for member states to consider,” Smith Ihenacho and Cencig said, adding that this would help limit the negative effects of unequal voting rights on minority shareholders.

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