Dr. The interview of Hugo Palacios Mejía, published on December 27 in the Colombian newspaper El Tiempo, is given below, considering that it will be of interest to all Grupo SURA shareholders, the public stock exchange and other Company stakeholders.
Author: Carlos Arturo García, journalist from El Tiempo’s Department of Economics and Business.
Caption: A lawyer from Grupo SURA speaks in the midst of vigorous debate. Hugo Palacios says Gilinski’s demands will be met with the best of society.
Taken from: https://www.eltiempo.com/economia/empresas/grupo-sura-habla-abogado-sobre-demandas-de-gilinski-721039
Amid the growing debate at Grupo SURA’s board of directors on November 17 that three members decided to join the organization’s Nutresa takeover bid, following the resignation of four other executives, legal counsel Holding companyHugo Palacios Mejía answered some of EL TIEMPO’s questions about the scope of this new dispute with the Gilinski family, one of its majority partners today.
Is a new legal battle starting between GEA and Gilinski, as in Banco de Colombia?
The term GEA is a simplification that leads to misunderstandings. Controversies sparked by Mr. Jaime Gilinski revolve around companies that do not form a business group among themselves, as neither has control over the other. There are mutual property links between them, which are completely legal and known to the authorities and the public.
That’s why there is no such person or thing as GEA in the cases that I know of. The legal debates brought up by Mr Gilinski’s companies are very different from what existed in the then Banco de Colombia environment a few years ago. As with the current hostile and unsuccessful attempt to take control of Grupo SURA, there was nothing like a takeover bid there.
Do Corporate Oversight concepts regarding the number of members and quorum a board of directors should have when making decisions out of date with respect to an organization’s bylaws or other existing market regulations?
According to the Commercial Code, the boards of directors meet with the presence and vote of the absolute majority of their members and make valid decisions. In a seven-member board of directors like that of Grupo SURA, three managers are never a majority, even if these three have the opposite illusion.
The Financial Inspectorate explained that since 2011, the general rule that a majority of board members must be present and vote to approve a resolution has not changed since some of them did not vote or were blocked.
The inspectorates’ concepts are helpful to assist in the interpretation of the law, but are not binding. Legal provisions and statutes that are binding on corporate matters. Moreover, the Company Inspectorate has not said anything contrary to the requirement that board decisions be taken by the majority of members present and by vote.
How far does Grupo SURA hope to go in the face of legal attack from the Gilinski family?
In a matter of attack, the task of the bullfighter is dependent on the attack of the bull. The economic attack of companies controlled by Mr. Jaime Gilinski is for the control of certain companies and especially Grupo SURA.
Therefore, the attack will always be dealt with, in all cases, in the best interests of society, taking into account the interests of its partners. And this is always to study legal arguments, respect the rules of the game and rely on the impartiality of the judges and officials.
The strong tension that exists between GEA representatives on the organization’s boards and representatives of the Gilinski family, how damaging is this to SURA’s reputation and particularly to the interests of its shareholders?
If someone wishes to take control of a business by hostile means, they can be expected to encounter resistance. If the attack is carried out by listed companies, it is natural and appropriate to know the attacks and defenses of the shareholders holding the control of the market. But you have to respect the rules of the game.
It is very illegal and harmful for those who seek control to obtain confidential information from the company they are trying to control, not for the market but for themselves.
Leaking secret board deliberations to the media undermines the quality of their work, as it reduces the spontaneity of the deliberations. Such leaks violate each manager’s legal obligation of loyalty to the others.
Are you worried that Gilinski will be sued for not complying with the decisions taken in the board of directors with only 3 members?
There have been lawsuits and threats of lawsuits for a long time. The important thing is to know if they have the basics. I am not aware of any legal grounds that could justify Mr Gilinski’s companies’ claims against Grupo SURA or its directors for their refusal to sell their Nutresa shares.
Grupo SURA’s board of directors never had a decision ordering the sale of such shares, only a reckless document from three executives who had taken the risk of causing a major disturbance in the market and who had dared to take the board’s name and give instructions. To the management of Grupo SURA.
Such an adventure would not have led to the decision to sell it legally, either. But most important were the precautionary measures taken from various judicial authorities that ordered the management of Grupo SURA not to obey the three directors.
Are there other ways than legal ways to resolve these differences and prevent damage to the organization’s reputation?
Of course there is. It is always possible for all shareholders to come up with formulas that reconcile their interests and work together to ensure their investments produce the greatest possible benefit. We should always have a dialogue with mutual respect, yes.
Where will the resources come from to cover litigation costs and high attorney fees?
In these discussions, it happens as in the war between Ukraine and Russia: if its borders are invaded, no one can allow it to be crushed. But prolonging any war is very costly, even for the winners.
Wars continue as long as both sides believe they can win. We trust that all shareholders understand this and will reach an agreement soon.
What do you think of the comments that the resignation of the board members is due to the SURA strategy?
A company called GEA does not have a board member in Grupo SURA. The elected executives in the assembly resigned, as they had rights, for the reasons each of them explained in the letters published on the Grupo SURA website.
There is no norm that directors of a company should continue unless the parliament accepts their resignation. Unless there is a contrary rule, it is natural and equitable for the members of the board of directors to resign freely and effectively, with immediate effect, if they can be dismissed freely by the assembly.
Where is the defense of minority shareholders’ interests when perceived as the struggle of two powerful economic groups for control of the country’s key companies?
All shareholders have the authority to apply to administrative and judicial authorities to defend their legitimate interests. Colombian law today punishes the abuse of both majorities and minorities.
Because of reputational erosion and its impact on the value of companies, as well as market effects, this confrontation does not entail a huge economic cost that could hurt shareholders. Where will the resources come from to cover litigation and litigation costs? High fees for lawyers?
In these discussions, it happens as in the war between Ukraine and Russia: if its borders are invaded, no one can allow it to be crushed. But prolonging any war is very costly, even for the winners. Wars continue as long as both sides believe they can win. We trust that all shareholders understand this and will reach an agreement soon.
How did SURA learn that the Gilinski family’s case in Supersociedades was transferred to the Bogotá Supreme Court?
The matter was suspended at the Inspectorate and referred to the Bogotá High Court due to Nutresa’s refusal. Nutresa claimed that the Inspectorate officer, who knew about Jaime Gilinski’s lawsuit against Grupo SURA, Nutresa and others, was linked to a law firm that served Mr Gilinski’s companies in the OPAs and the officer’s wife. He has ties to that law firm.
Did Grupo SURA violate its fiduciary duty to its shareholders by deciding not to sell its stake in Nutresa?
No. It is naive to think that a company has a fiduciary duty to sell its investments simply because the buyer and others outside the business believe that the price offered is in the best interest of the seller.
According to Article 23 of the Law No. 222 of 1995, the first fiduciary duty of the directors of any company is towards the company itself, that is to those who have an interest in the business project and the normal development of its corporate purpose. . .
The fiduciary mandate obliges managers to consider the interests of partners, but at no cost. It consists in the fact that society profits not from speculation, but from the perspective of sustainable development.
If the Gilinski family had not initiated the takeover offers for SURA and Nutresa y Argos, the probability of the sale would have been different as investors were sought according to the directives…
As legal counsel, I shouldn’t make assumptions about it. It is clear that the possibility of sales created by successive takeover offers and the information provided in the relevant booklets have led some investors to sell the same shares at a lower price than others subsequently sold. I guess the ex is not grateful.
Do you think that the market authorities acted in accordance with the rules in all these takeover processes?
It is clear that it is not in all processes. Grupo SURA has complained about various irregularities in the OPA authorization process. In particular, there is a serious situation revealed by the lawsuit filed by Grupo SURA and EPS SURA against the Ministry of Health.
The lawsuit describes how Grupo SURA’s initial takeover bid was allowed to continue despite the indirect purchase of more than 10 percent of EPS SURA’s shares without prior authorization from the Ministry of Health.
Violation of this condition means that the purchases of shares made before the approval of the Undersecretariat are completely invalid according to the law.
Facsimile of the print version of the interview published on November 27, page 1.22:
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