Finally, the share company law should stipulate applicable penalties on boards and auditors who failed to observe accounting, auditing and financial reporting standards. On the other hand, require review of their transactions with the company by independent directors coupled with full disclosure and faire accounting treatments. Correspondingly, the means of an accessing company’s information provided under articles 392(3), 406, 417, 422 and 427 of the commercial code are expensive for shareholders; rather it should be supplemented by requiring companies to publish full and material information in their company’s website, public media and send to each shareholder via e-mails. Second, there are no requirements for approval and registration of the draft prospectus by regulatory authority before issued and offered to the public. Since cooperation between stakeholders and companies are important to generate wealth, jobs and long run sustainability of companies in the country, the share company law should address the interest of stakeholders. UNITED BEVERAGES SHARE COMPANY has 100 total employees across all of its locations and generates $6.18 million in sales (USD). Such transactions play pivotal roles in the capital markets where they are fully disclosed to investors, executed in transparent and efficient manner and their prices are aligned with the interest of all classes of shareholders. In the absence of fully informed basis, it would be difficult for boards to act upon with “due care and diligence.”, As discussed, article 358 of the commercial code requires boards decisions must be taken with an absolute majority. In 2012 by Raya Share Company and BGI Ethiopia (60%- 40% share structure) and started operations in 2016. Nevertheless, it is undeniable that with the exception of creditors, other stakeholders have no recognized substantive or procedural enforceable rights in the share company provisions. Likewise, such rights are permitted in a narrow circumstance in others corporate laws on the assumption that greater numbers of shareholders exit may affect the capital integrity of the company. However, once the share company law allows shareholders rights to exit from the company, establishing stock exchanges and prescribing mandatory takeover bid provisions are very essential to guarantee shareholders full redress of their investments. In such case, there will be apparent conflicts of interests when executive boards review their own transactions with the company pursuant to article 356 of the commercial code. To protect minority shareholders from corporate insiders, the share company law should clearly prohibit direct or indirect insider trading and abusive self-dealings within the company, including controlling shareholders. Institutional investors under articles 328 and 398(2) of the commercial code have voting rights through proxies. There are companies in the EAST AFRICA BOTTLING SHARE COMPANY corporate family. Thus, the two provisions seem to contradict and needs to harmony to avoid confusion. Registrations of ownership rights in the share company law provisions are two types: registered and unregistered ownership rights. [xliii] From this, it is reasonable to infer that the policy objective of Ethiopian corporate governance framework declines to address the interests and roles of stakeholders in the corporate governance of the company. Even after the finding of the investigation of companies’ scandals, there is no provision that allows the Ministry to take appropriate disciplinary action on failure companies. As illustrated above, the share company laws prescribe some relevant provisions regarding the equitable treatments and protection of minority shareholders. Number of Employees: 2037 Establishment Capital: Birr 3,836,000, 000 in cash and in kind. Nonetheless, as noted, the legal frameworks of some share company law provisions apparently failed to create incentives to market players and also failed to encourage transparent and efficient markets. At least the Directive should allow companies to determine whether or not employees are allowed to be represented at board members. Cumulative voting rights of minority shareholders provided under article 352 of the commercial code is vague and unclear; consequently it should explicitly refer each class of shareholders. In addition, private banks also managed to capture more than half of the private sector commercial banks’ loan customers (CBE, 2013/14). ... Selam bus public transport is one of Ethiopian Transport service that provides full service for … Oromia Credit and Saving Share Company (OCSSC) in Strengthening Small and Micro Enterprises (SMEs) of Guder Town, Toke Kutaye District, West Shoa Zone of Oromia Regional State, Ethiopia We Oppressed Ethiopian have to be prepared for pay back time to Elite … Therefore, the legal and regulatory frameworks should allow the establishments of organized stock exchanges and alternative trading systems by considering the country’s business culture. Abusive self-dealings and insider trading by controlling shareholders can be exercised in the forms of. All these so-company are created by thief’s Woyane and loyalists. To make enforceable shareholders right to exit provided in article 364 of the commercial code, introducing stock markets and prescribing additional mandatory takeover provisions would be very crucial. As a result, it entirely disregarded the interests of stakeholders within the company except rights of creditors. Therefore, applicants interested in the Ethiopian Govt. All these legal and regulatory loopholes of the share company law provisions will have potential impacts on investors’ investment decisions. Third, this may lead to evasion of government taxes and abuse of company’s assets by mangers. Mobile phone. Therefore, a strong disclosure corporate governance framework assists to attract capitals and foster investors’ confidence on the capital markets whereas poor and inadequate corporate disclosure deter the proper functioning of capital markets, raise costs of capitals and result in poor allocations of resources. Participation of employees may vary board member representations or consulting representatives of workers council on core company decisions or participate in the company’s shares or profits depending on national laws. United Beverages Share Company is a subsidiary of United Africa Beverages, located in Ethiopia. The OECD Principles urge government policy makers should craft their legal, regulatory and institutional bases that ensure the effective and efficient corporate governance framework. As a result, article 333 of the commercial code should be deleted. Since the decisions of the board may affect different classes of shareholders, they should make objective and independent judgments which align the interests of all shareholders with the stakeholders (OECD Principles VI, (B&C)). They neglected other important components of financial reports (companies’ cash flows and income statements, and any equity changes, recognized gains or losses statement). Therefore, to update the share company law provisions with the modern markets development and concerns of complex corporate governance issues, this article advocated that consulting the relevant OECD Principles of corporate governance as a reference and benchmark is worthwhile. Kebele 14, 355, Addis Ababa, Ethiopia. Selam Bus Line Share Company (Selam Bus Line S.C.) is one of the largest long distance bus companies in Ethiopia. Fax. This in turn not only creates loss of investors’ confidence in the Ethiopian capital markets but also results in market inefficiency, raises the cost of capitals and inefficient use of scarce resources in the country. According to this approach, for the long term profit maximization of shareholders and sustainability of the company, the decisions of the board should align the interest of shareholders profit maximization with the interest of stakeholders. Contact Us; UN Site Locator; Careers; RSS Feeds; Terms and conditions; Copyright notice In contrast, article 5 of the Ethiopian National Bank Directives unequivocally prohibited bank employees from board members representation. Shareholders have right to subscribe additional new shares.  They have the right to qualified majority or unanimous vote on amendments of the company’s statues. They have the right to withdraw from the company subject to prescribed preconditions. Shareholders representing 10% of the share capitals of the company have also the right to call shareholders general meetings pursuant to article 391(2) of the commercial code. Operations in 2016 should be provided robust implementing institutions special interest on corporate governance years Data ): 27.1 of. Be one tier, two tiers or additional statutory board structure affairs are essential elements for boards’ stewardship shareholders... 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