The Right of Priority in the Subscription of the Share Capital Increase in the Public Shareholding Company:A Comparative Study

Dr. Khalil Victor Tadros
Associate Professor – Maritime and Commercial Law – Kuwait International Law School

Abstract:


The importance of the research is to highlight the right of priority of the shareholders to subscribe to the capital increase of the joint stock company and the extent to which it can be waived as it has become, with the development of modern investment mechanisms and multiple securities, a security representing the right granted to the shareholders of the company For others, for a certain amount, which helps to open up new horizons to investors, and set the revitalization of the financial market, and create new investment tools in the financial markets
The Comparative legislation, such as Egyptian, Omani, Qatari, Saudi and to a certain extent Kuwaiti legislation, did not hesitate to lay down the foundations and mechanisms of this right by stating its contents and limits and the procedures for implementing them. This requires clarifying the nature of this right and the most important principles on which it is based. The subscription shall be within the limits of the proportion of each shareholder in the Company’s capital. Under this right, shareholders have several options, either to exercise the right to subscribe himself or to sell all or part of these rights or to purchase additional rights as each shareholder has the right to buy some rights from another shareholder. On the other hand, the legislation in question decided the right of shareholders to waive these rights in the subscription, in exchange for a certain amount determined by specific rules known as the price value of the right. Finally, in accordance with the nature of the right of subscription and in accordance with its suitability, it may not be traded in the margin or withheld or mortgaged.
Keywords: the increase of the share capital of the joint stock company, waiver of the right of priority, the old shareholders, the subscription of the capital increase shares, the value of the subscription rights.

Read Full PDF Text (Arabic)