Golden share definitions
| Word backwards | nedlog erahs |
|---|---|
| Part of speech | "Golden share" is a noun. |
| Syllabic division | gold-en share |
| Plural | The plural of the word "golden share" is "golden shares." |
| Total letters | 11 |
| Vogais (3) | o,e,a |
| Consonants (7) | g,l,d,n,s,h,r |
What is a Golden Share?
Definition of Golden Share
A golden share is a type of share that gives the holder veto power over certain company decisions, typically held by a government entity or founding family. This special class of share gives its holder the ability to block or approve key corporate actions, such as mergers and acquisitions.
Usage of Golden Share
Golden shares are often used to protect strategic industries or assets deemed crucial to national interest from being acquired by foreign entities. For example, a government may hold a golden share in a defense contractor to prevent foreign takeovers that could compromise national security.
Characteristics of Golden Share
Control and Influence
With a golden share, the holder has significant control and influence over the direction of the company, even if they do not own a majority of the company's shares. This control can be used to safeguard certain interests or ensure that the company operates in a specific manner.
Unique Privileges
Golden shares often come with unique privileges and rights not available to ordinary shareholders. These special rights can include the ability to nominate board members, veto specific decisions, or access confidential information about the company.
Legal Considerations
Regulatory Approval
While golden shares can be a powerful tool for protecting vital interests, their use is subject to regulatory approval in many jurisdictions. Governments or companies seeking to issue golden shares may need to meet specific criteria and demonstrate the necessity of such control.
International Implications
Golden shares can raise important legal and political issues, especially in international transactions. Some countries may view the use of golden shares as a form of protectionism, leading to potential conflicts and challenges in cross-border acquisitions.
Conclusion
In summary, golden shares play a crucial role in safeguarding critical assets and industries from unwanted takeovers. While they offer unique powers and protections, their use requires careful consideration of legal and regulatory frameworks to ensure compliance and avoid conflicts.
Golden share Examples
- The government retains a golden share in the company to prevent any hostile takeovers.
- The golden share allows the original founders to maintain control over major decisions.
- Investors were concerned about the implications of the golden share being held by a single entity.
- The golden share gives the holder veto power over specific company actions.
- The golden share is designed to protect national interests in strategic industries.
- The court ruled that the golden share was invalid and should be revoked immediately.
- The government's golden share in the telecommunications company ensures security of critical infrastructure.
- Shareholders are debating the merits of introducing a golden share structure in the organization.
- The golden share agreement includes provisions for a buyback option at a predetermined price.
- The golden share arrangement is subject to review by regulatory authorities every five years.