Delisting of Stock Corporations in Europe and Beyond: Rationales,Forms

EU Member States

Greece

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Name: A. Kouloridas

Date: 20 January 2024

QUESTIONNAIRE ON DELISTING

Greece

PART I. VOLUNTARY DELISTING

A delisting is deemed voluntary if it is initiated by the company or a shareholder.

1. Is voluntary delisting explicitly allowed by national laws or by jurisprudence?

Yes (X) No

Relevant provision:

Article 17(5) of Law 3371/2005

2. If the answer to 1. is yes, who decides so?

BoD GA (X) Other

Relevant provision:

Article 17 (5) of Law 3371/2005

3. What is the quorum requirement for the delisting decision of the competent organ?

No quorum requirement is explicitly provided, however, a majority of 95 per cent of the total voting share capital is required for the delisting decision (Article 17(5) of Law 3371/2005).

4. What is the majority requirement for the delisting decision of the competent organ?

A majority of 95 per cent of the total voting share capital is required for the delisting decision (Article 17(5) of Law 3371/2005).

5. Do (minority) shareholders have statutory veto rights as to a delisting decision?

Yes No (X)

6. Should delisting take place within a specific timeframe after the relevant decision? Is there a specific period of time after the decision in which the delisting should be completed?

Yes No (X)

There is no specific timeframe for delisting provided by law, following the relevant decision. Delisting customarily takes place on the same day with the delisting decision of the competent authority. Good faith and abuse of rights doctrines may apply in cases of considerable delays

7. Should the delisting application give a full statement of reasons for the submission of such application?

Yes No (X)

8. Is it required that a competent authority approves the voluntary delisting?

Yes (X) No

Relevant provision:

Article 17(5) of Law 3371/2005

If the answer to 8. is yes, who is the competent authority?

The Hellenic Capital Market Commission (HCMC)

If the answer to 8. is yes, does the competent authority has the competence to verify the reasons of delisting?

Yes (X) No

Relevant provision:

Article 17(5) of Law 3371/2005

HCMC has to verify whether the delisting decision was adopted by the GM in accordance with the law (i.e. whether the majority requirement was met).

If the answer to 8. is yes, does the competent authority have any discretion? Can the competent authority impose additional terms for investor protection? Can the competent authority postpone the decision? If Yes, do you know whether this discretion has been used in the past?

Yes (X) No

Relevant provision:

Article 17(5) of Law 3371/2005

HCMC may impose additional conditions or requirements to grant delisting. For instance, HCMC customarily asks for the submission of a takeover bid.

9. In case of a voluntary delisting does the issuer have to make an offer to buy the shares of (dissenting) shareholders?

Yes No (X)

Relevant provision:

There is no relevant provision by law. However, HCMC customarily asks for it, in order to approve the delisting. Rules for mandatory takeover bids apply.

10. Are there any restrictions due to the principle of maintenance of the share capital?

Yes No

Relevant provision:

There is no case law on this issue. Nonetheless, it can be argued that the principle of maintenance of share capital applies.

11. Does a (majority) shareholder or a third person has the right to offer to buy the shares of (dissenting/all) shareholders and relieve the issuer?

Yes (X) No

Relevant provision:

Article 17(5) of Law 3371/2005

The Capital Market Commission may, by decision, impose special conditions on majority shareholders relieving the issuer.

Moreover, delisting may be the result of an optional takeover bid (if mandatory takeover bid rules are being applied). See analytically below answer 20.

12. In case of a voluntary delisting does the issuer or a third person have the obligation to publish a prospectus / informational document?

Yes No (X)

13. Is an exit opportunity / mechanism that allows investors to exit their investments (e.g. sell – out right) available for shareholders in case of delisting? What are the relevant provisions (please provide translations)?

Yes No Relevant provision:

If yes, please define:

There is no specific provision of the law for an exit opportunity available for shareholders in case of delisting. However, there may be an exit opportunity under the application of general rules in various circumstances:

(1) If for the purposes of delisting the majority shareholder makes a takeover bid, the dissenting shareholders are afforded a sell out right of Article 28 of Law 3461/2006 as currently in force, provided that the acquirer pursuant to the takeover bid exceeds 90 per cent of the total voting tights of the share capital of the company.

(2) If a single majority shareholder obtains more than 95 per cent of the share capital of the issuer the remaining shareholders can apply to the court and request that the majority shareholder buy out their shares in accordance with Article 46 of Law 4548/2018 (company law).

Article 28 of Law 3461/2006:

The right of sell-out

1. Where the offeror, following a bid made to all the holders of the offeree company’s securities for the total of its securities, hold securities representing not less than ninety percent (90%) of the voting rights in the offeree company, the offeror is obliged to buy from the holders of the remaining securities all those securities that would be offered to him/her in the Stock Exchange by offering a cash consideration equal to the consideration of the bid and within a three (3) month period following the disclosure of the results of the bid. Upon request of the holders of the remaining securities of the offeree company, the consideration offered may consist of liquid securities, which were the subject of the bid and are equal to the consideration offered during the bid. The Capital Market Commission, in its decision, may specify the procedure of payment of the consideration and the certification of payment, the transfer of securities and may also regulate any other necessary detail.

2. The offeror makes public the right of sell-out attributed to all the holders of the remaining securities of the offeree company, simultaneously with the disclosure of the results of the bid according to article 16 paragraph 1.

Article 46 of Law 4548/2018:

Right of the minority to redeem its shares from the majority shareholder

1. Without prejudice to the provisions on the public offer of securities, if a shareholder has acquired after the incorporation of the company and retains at least ninety-five percent (95%) of its capital, one or more of the other shareholders may apply to the court, by means of an action brought within a period of five (5) years from the date on which the shareholder acquired the above percentage, for the redemption of their shareholding by that shareholder. The percentage of the company's capital held by the above shareholder shall include the percentages held by: a) affiliated companies within the meaning of Article 32 of Law No. 4308/2014, and b) the close family members of the shareholder, as defined in Annex A of the law. 4308/2014.

2. The provisions of paragraph 4 of Article 45 shall apply mutatis mutandis to the redemption under this Article.

14. Is there any specific provision on downlisting? If not, is downlisting allowed, and how does it take place?

A downlisting occurs when the shares are no longer traded on a regulated market (as defined by Union law) but on an MTF.

Yes No (X)

There is no specific provision for downlisting in Greek law. Downlisting is considered as delisting (Delisting from a regulated market and then listing in an MTF). However see below answer to Q 37.

15. Is there any specific provision on market migration (delisting from a regulated market and listing in another)?

Yes (X) No

Relevant provision:

Article 17(5) of Law 3371/2005

No prerequisites exist for a market migration to another regulated market within Greece (Article 17(5) last paragraph) However, currently there is only one regulated market for shares in Greece. In case of a market migration to another regulated market abroad due to a corporate transformation e.g. merger split etc., A GM decision is required with majority of 90 per cent of the total voting share capital. There is no requirement for HCMC to approve such a decision.

16. Is there any specific provision on voluntary delisting in case of increase of listing requirements by both the Law and Stock Exchange?

Yes No (X)

The increase of listing requirements is not considered as a delisting reason.

17. Are there different rules on delisting for national and foreign listed companies?

Yes No (X)

Relevant provision:

Art. 1, Law 3371/2005

See also answer to Q 15.

18. Cold delisting is usually described as a transformation of a listed company resulting to its delisting, including especially the merger by absorption of a listed company by an unlisted company. What is defined as cold delisting in your legal order? Is there any specific provision on cold delisting?

Cold delisting is not defined by Greek law as such. However, it is described in Article 17(5) of Law 3371/2005, as a transformation resulting to the delisting of the listed company, including especially the merger by absorption of a listed company by an unlisted company.

19. Does the merger of a listed company with a non-listed company lead to delisting? Is an exit opportunity available for shareholders? What are the relevant provisions? (please provide translations)

Yes (X) No

Relevant provision:

Article 18 of Law 4601/2019 and Article 17(5) Law 3371/2005

The merger of a listed company with a non-listed company lead to delisting, provided that the absorbing company is the non-listed company. Such decision of the GM requires a 95 per cent majority of the total voting share capital.

20. Does the successful completion of a mandatory bid give the right to delisting? If yes, are there any preconditions?

Yes No

Relevant provision:

Article 27 of Law 3461/2006 and Article 17(5) of Law 3371/2005.

Once the offeror reaches the 95 per cent threshold of the total shares, following a mandatory takeover bid, he may apply for delisting.

Moreover, where the offeror, following the submission of the bid addressed to all the holders of securities of the offeree company for the total of its securities, hold securities representing not less than 90 per cent of the voting rights in the offeree company, is able to require all the holders of the remaining to sell him/her those securities (squeeze out right) resulting to delisting.

21. Are there specific rules on delisting from an MTF? Voluntary delisting from ENA (the MTF market) of Athex Exchange is covered by Art 30 of the Alternative Market Rulebook. More precisely under paragraphs 2 and 3 of art 30 voluntary delisting requires a resolution of the General Meeting of the company's shareholders, adopted by a majority of 95% of voting rights, except for in cases that the company applies for a simultaneous listing in the regulated market in which case a GM resolution taken by simple majority will suffice.

More precisely the provisions are as follows:

Alternative Market Rulebook:

PART C: Removal of transferable securities

Article 30

Voluntary and forced removal

1. Without prejudice to the competence of the Hellenic Capital Market Commission, in accordance with paragraph 4, article 67, Law 4514/2018, a company's shares may be removed from trading on ENA by Decision of ATHEX, in accordance with the following paragraphs:

2. The voluntary removal of shares from trading requires a resolution of the General Meeting of the company's shareholders, adopted by a majority of 95% of voting rights. 3. The voluntary removal of a company's shares for the purpose of their listing on a regulated market of ATHEX requires a resolution of the General Meeting of the company's shareholders, adopted by a simple majority of voting rights. In such a case, the effect of the resolution to remove the shares from trading shall be conditional on their listing on the regulated market.

PART II. OBLIGATORY DELISTING

A delisting is deemed compulsory/obligatory, if it is initiated by a supervisory authority or a market operator without consent of the company.

22. What are the prerequisites for compulsory delisting by the competent national supervisory authority?

According to Greek Law (Article 17(3) of Law 3371/2005), the prerequisites for a compulsory delisting by the HCMC are, indicatively, the suspension of the trading of the shares for a period longer than six months, the repeated non-publication of financial statements, the negative net position of the listed company for more than one financial year and the declaration of insolvency.

More precisely Art. 17 para 3 of Law 3371/2005 provides that:

‘The Capital Market Commission may decide to delist a security at the request of the exchange or on its own initiative, when it considers that, due to special circumstances, the smooth functioning of the market is not ensured or when the need to protect investors so requires. Factors that may be taken into account include, by way of example, the suspension of trading in the security for a period of more than six months, the repeated non-publication of annual, half-yearly or quarterly financial statements, the issuer's negative net assets for more than one financial year or the declaration of bankruptcy of the issuer. Before taking a decision on delisting, the Capital Market Commission shall inform the issuer of the reasons for delisting and shall invite the issuer, within a period which may not exceed one month, to express its views. The Capital Market Commission may, upon a reasoned request from the issuer, grant the issuer a period of up to six months to remove the reasons for the delisting.’

23. Which body has been designated as the competent authority, in particular regarding the power to require the removal of a financial instrument from trading pursuant to art. 69(2)(n) MiFID II?

Hellenic Capital Market Commission (HCMC)

Article 67(4)(b) Law 4514/2018: ‘The Hellenic Capital Market Commission may additionally: … b) remove or require the removal of a financial instrument from trading, whether on a regulated market or under other trading arrangements…’

24. What are the rules of the market that can justify a compulsory delisting imposed by market (art. 52 of Directive 2014/65)?

According to Article 52 of Law 4514/2018 (transposing article of Article 52 of Directive 2014/65) without prejudice to the right of the Hellenic Capital Market Commission to demand suspension or removal of a financial instrument from trading, the market operator may suspend or remove from trading a financial instrument, which no longer complies with the rules of the regulated market unless such suspension or removal would be likely to cause significant damage to the investors’ interests or to the proper function of the market.

According to Article 17(1) of Law 3371/2005, stock exchange may request from the HCMC the delisting of an issuer in case proper functioning of the market is not ensured or in order to protect the investors.

Relevant provisions are also included in the AthEx Regulation. More precisely, Article 2.6.12 of the AthEx Regulation provides that:

‘1) The deletion of a Financial Instrument is the end of the trading thereof on the ATHEX Market where it is listed.

2) ATHEX deletes a Financial Instrument:

a) in accordance with article 52 of Law 4514/2018 and the present Rulebook, particularly when the uncertainty for the continuation of the Issuer's business is rendered irreversible, or a smooth deal is not ensured or permanently threatened; during the formation of its view on the deletion, ATHEX takes into account the rules of proper functioning of the market and protection of the investors, at the same time examining the prevention of a potential abuse of the provisions on deletion by the issuers;

b) at the request of the Hellenic Capital Market Commission.

3) Subject to a request for voluntary deletion by the issuer, ATHEX proceeds to the deletion of securities in, including but not limited to, the following cases:

a) suspension of trading in the relevant Transferable Securities for a period of over six (6) months, provided that the six (6) month time limit expires without result and provided the possibility of a further six (6) month extension has also been exhausted.

b) existence of a free float rate lower than 10%, distributed to fewer than 30 shareholders, after the lapse of six (6) months from the ascertainment of the reason for the deletion of this instance and provided a time limit of six (6) months for rectifying the reason has passed without result. Such reason for deletion is not applicable in cases where the number of shareholders has resulted following completion of a public offering. …’

The market operator has similar authority with respect to the Greek MTF (ENA)/ More precisely, paras 1 and 4 of ‘PART C: Removal of transferable securities

Article 30 Voluntary and forced removal of the Alternative Market Rulebook provide:

2. …

3. ...

4. ATHEX may remove a company's shares from trading by way of indication in the following instances: a) if trading in the shares has been suspended for a period of more than one year; b) if the company has a negative net worth and measures are not taken to increase its capital; c) if the company shows no productive activity for a period of at least two financial years; d) if the company fails to appoint a Nominated Adviser for a period of more than one year; e) if the company has not published financial statements for more than two financial years, and f) if it is ascertained that trading in the shares has not been orderly and fair. In such a case, ATHEX may impose specific terms and/or time limits on the persons of paragraph 1, Article 2, requiring them to restore orderly and fair trading. 5. Before taking a decision to remove shares from trading, ATHEX shall notify the company and request its opinion on the matter, setting a deadline for the submission of such opinion and, if this deadline passes without the company acting, it shall remove the shares from trading. 6. In the framework of hearing the company, ATHEX shall at its own discretion consider the opinions submitted and may ask the company to formulate specific actions and draw up a timetable for their implementation. 7. With regard to the removal from trading of corporate bonds, warrants and other Transferable Securities, the above provisions shall be applied mutatis mutandis and may be further specified by a Decision of ATHEX.’

25. Have any of the voluntary or obligatory delisting requirements above changed materially since 2010 (e.g., due to a legal decision or amendment of the regulations)?

A. Since 2010, the highlighted provisions were added in Article 17 (suspension-halt of trading and removal of securities), para 5 of Law 3371/2005, as amended by Law 4141/2013 and Law 4199/2013. In particular, the relevant additions seek to address cold delisting instances:

‘The Hellenic Capital Market Commission may decide to delist shares from the stock exchange at the request of the issuing company, provided that the request is submitted after a decision of the General Meeting of the issuing company taken by a majority of 95% of the total voting rights in the issuing company per category of shares for which the delisting request is submitted.

The same majority is required for the adoption of a corporate transformation resolution (merger, division or conversion) which results in the delisting of the shares of the issuing company from the stock exchange.

If, as a consequence of the corporate transformations, the shareholders of the company being absorbed, split or converted receive shares listed on a regulated market of a state other than Greece, in accordance with the terms of the aforementioned transformations, the percentage of the required majority of the first subparagraph shall be set at 90%. The preceding subparagraphs of this paragraph shall not apply if, as a result of corporate transformations, the shareholders of the company being absorbed, split up or converted receive shares listed on a regulated market in Greece.

The Capital Market Commission may, by decision, impose special conditions on the issuer and/or its shareholders for the protection of the issuer's shareholders.’

In addition, MiFID II was transposed into Greek Law under Law 4514/2018.

B. Since 2010, the Athens Exchange Rulebook has been amended several times. Regarding voluntary or obligatory requirements, the ATHEX Rulebook provides that:

‘Art. 2.6.12.

1) The deletion of a Financial Instrument is the end of the trading thereof on the ATHEX Market where it is listed.

2) ATHEX deletes a Financial Instrument:

b) at the request of the Hellenic Capital Market Commission.

3) Subject to a request for voluntary deletion by the issuer, ATHEX proceeds to the deletion of securities in, including but not limited to, the following cases:

Alternative Market Rulebook has been amended several times. Regarding voluntary and forced removal of transferable securities, the Article 2.6.12 “Deletion of a Financial Instrument” provides that:

‘PART C: Removal of transferable securities

Article 30

Voluntary and forced removal

PART III. GENERAL QUESTIONS (if not already answered)

26. How are dissenting shareholders protected in voluntary delisting?

It’s at HCMC’s discretion to decide whether to accept or not an application for delisting, even if the condition of the previous relevant decision of the GM with a percentage of 95 per cent of the total voting rights is met. This is justified for purposes of minimization of the impact of the deletion on the remaining 5 per cent. Moreover, according to Article 17(5) Law 3371/2005, HCMC may decide to set special conditions on the issuer or its shareholders, regarding the delisting, focusing on the protection of the issuer's shareholders. HCMC’s customarily asks for the submission of a takeover bid.

27. What are the sanctions in case of a breach of the delisting rules?

HCMC will not approve the delisting.

28. Is there a special duty of loyalty (for the board or, if applicable, the shareholders) imposing further restrictions in connection with a delisting?

Delisting shall be decided by the GA. Moreover, a majority of 95 per cent of the total voting share capital is required for the delisting decision. Consequently, there are no substantive grounds for applying a special duty of loyalty. Nonetheless, general provisions, including principle of good faith apply.

29. How are shareholders protected in obligatory delisting?

There is no special provision on this issue. Nonetheless, according to Article 17(3) Law 3371/2005, the Capital Market Commission may decide to delist a security at the request of the exchange or on its own initiative, when it considers that, due to special circumstances, the smooth functioning of the market is not ensured or when the need to protect investors so requires. Accordingly, shareholders are indirectly protected. Moreover, general provisions on shareholders’ protection (i.e. liability of BoD Members) apply.

30. Have shareholders successfully challenged delisting decisions in the past? If Yes, could you provide any names of cases?

Not applicable.

31. How is the issuer protected in (obligatory) delisting?

According to Article 17(3) of Law 3371/2005, before deciding the delisting οf a listed company, the Hellenic Capital Market Commission shall notify the issuer for the reasons of delisting and invite him within a certain period, which cannot exceed the one month, to express its views. HCMC may, upon a reasoned request from the issuer, grant it a period of no more than six months, in order to eliminate the reasons that lead to its delisting. The delisting decision can be appealed by a request for cancellation before the Administrative Court of Appeal.

32. How does insolvency and restructuring of a listed company affects delisting? Specifically: a) Does the initiation of formal insolvency (liquidation) procedures automatically trigger mandatory delisting? b) Does the initiation of formal restructuring / reorganization procedures automatically trigger mandatory delisting? c) If the above scenarios do not automatically trigger mandatory delisting, what else are the implications? d) Please give empirical information (if available) on the treatment of insolvent listed firms by trading venues in your jurisdiction e) What are the relevant provisions (please provide translations)?

According to Article 17(3) of Law 3371/2005, insolvency of a listed company can lead to mandatory delisting by HCMC.

33. Do relevant courts have the power to examine the delisting reasοns on the merits?

The delisting decision can be appealed by a request for cancellation before the Administrative Court of Appeal. In that case, according to Greek law, courts do not have the power to examine the delisting reasons on the merits.

34. What are the legal consequences of delisting: a) on shares, b) on shareholders, c) on the issuer?

The principal legal consequence of delisting on shares, on shareholders and on the issuer is that following the delisting of the company, shares, shareholders and issuer are no longer subject to capital markets law and law provisions for listed companies.

For instance, shares are no longer necessarily dematerialized. They can be either materialized or dematerialized.

Furthermore, companies and shareholders are no longer subject to the obligations that derive from MAR and Transparency Directive. Also the regime of SRDII does not apply.

Moreover, as a general rule, issuers are not mandatorily bound by corporate governance rules, such as the obligation to establish an audit committee or remuneration and nomination committee or the adoption of renumeration policy.

35. Are there any statistical data, or evidence, on downlisting in your Country? If yes, please provide further details. Are there any statistical data, or evidence, on delisting from an MTF in your Country? If yes, please provide further details.

There are no cases of downlisting in Greece.

There are two cases of delisting from an MTF in Greece, one voluntary and the other obligatory.

See http://www.hcmc.gr/el/web/portal/diagrafinew.

36. More specifically, how many cases of voluntary delisting and / or obligatory delisting by the competent national supervisory authority have there been since MiFID came into force in 2007? Please also provide the main reasons for mandatory delistings, if available.

Since 2012, approximately 134 cases of both voluntary and mandatory delisting have taken place in the greek market. More specifically, out of the total number of 134, 58 were voluntary and 76 mandatory delistings. All voluntary delistings were approved by the HCMC while 6 out of 76 of the mandatory delistings were decided by the HCMC and the rest 70 were decided by the stock exchange.

37. Do you have something to add?

There is a current discussion about relaxing delisting requirements in case of voluntary delisting when delisting is accompanied by an admission to trading in an MTF (downlisting). A legislative proposal has been submitted by the Athex Exchange and the Union of Listed Companies to the Hellenic Capital Market Commission for evaluation and further deliberation. The relevant proposal requires a statutory amendment passed by the Parliament.

A draft version of the Athex Rulebook currently submitted for approval to the Hellenic Capital Market Commission provides that, where circumstances exist that the market operator can mandatorily delist a listed security, instead of delisting it, it would be able, at its discretion, to transfer the said security to the MTF market (ENA) if the issuer meets the conditions for trading therein.

We will update the answers to this questionnaire in case of any developments.