Joint account shares

FORFEITING RIGHTS TO SHARES ON JOINT ACCOUNT

 

What is this matter about?

The shares in the predecessor of the current Orion Corporation, Orion-yhtymä Oy (Business ID 0112283-5, as of 11 December 1997 Orion-yhtymä Oyj), were incorporated in the book-entry system in 1993. The shareholders were at that time required to declare their shares for registration on their book-entry account, in practice meaning exchanging paper share certificates for registrations on a book-entry account, at the latest on the registration date 29 October 1993, and those shares that had not been registered on a shareholder’s book-entry account at the latest on the registration date were registered on a joint account opened in the book-entry system, where they were stored on behalf of the shareholders. A shareholder’s shares were transferred from the joint account to the book-entry account indicated by the shareholder upon the shareholder presenting his/her paper share certificate and making a declaration for registration.

Orion-yhtymä Oyj has later changed its name to Orion Corporation and on 1 July 2006 demerged into two companies, the current Orion Corporation (Business ID 1999212-6) and Oriola-KD Corporation (Business ID 1999215-0, currently Oriola Corporation). In the demerger, the shareholders of the old Orion Corporation received as demerger consideration one share in each of the current Orion Corporation and Oriola-KD Corporation per each share in the old Orion Corporation. The owners of paper share certificates were required to declare their ownership for registration in the book-entry system at the latest eight days before the effective date of the demerger to avoid the shares to be given to them as demerger consideration being registered on a joint account. A shareholder has been able to transfer his/her shares from the joint account to his/her book-entry account by making a declaration for registration. Oriola Corporation’s Annual General Meeting has on 17 March 2020 resolved on the forfeiture of the shares in Oriola Corporation on the joint account and of the rights that such shares carry.

A joint account is intended for temporary storing of shares until the shareholders declare their shares for registration on their personal book-entry account, and the rights of a shareholder (inter alia, to receive dividend) cannot be exercised until the shares have been registered on the shareholder’s book-entry account. A number of shares in Orion Corporation are nevertheless still registered on the joint account because the owners of such shares have not after the incorporation of the shares in the book-entry system in 1993 made a declaration for registration. Pursuant to provisions included in the Finnish company legislation in 2006, it is possible for Orion Corporation’s Annual General Meeting to resolve that shareholders forfeit their rights to the shares on the joint account and to the rights that such shares carry. The Board of Directors of Orion Corporation has proposed to Orion Corporation’s Annual General Meeting 2020 that the Annual General Meeting resolve on the forfeiture of the shares in Orion Corporation on the joint account and of the rights that such shares carry. 

Why is this matter topical?

According to the current Finnish Companies Act and the Act on the Implementation of the Finnish Companies Act, in case the decision of the Annual General Meeting on the incorporation of the shares in the book-entry system has been made before the entry into force of the current Finnish Companies Act, when ten years have passed from the registration date and the entry into force of the current Finnish Companies Act, and a shareholder has not made a declaration for the registration of his/her right in the book-entry system, it is possible for the Annual General Meeting to resolve that the shareholder forfeits his/her right to the shares on the joint account and to the rights that such shares carry. The current Finnish Companies Act entered into force on 1 September 2006. The Board of Directors of Orion Corporation has proposed to Orion Corporation’s Annual General Meeting 2020 that the Annual General Meeting resolve on the forfeiture of the shares in Orion Corporation on the joint account and of the rights that such shares carry. The Annual General Meetings of many listed companies have after 1 September 2016 resolved on such forfeiture. Such resolutions have substantially been based on the probability of old share certificates being found and declarations for registration being made being very low. Also the fact that companies have an obligation to ensure that their shareholding information is up-to-date has been a contributing factor. 

What does the forfeiture of the shares on the joint account mean?

If Orion Corporation’s Annual General Meeting resolves on the forfeiture of the shares on the joint account and of the rights that such shares carry, such shares become treasury shares and the shareholder forfeits all his/her rights to the shares. The provisions of the Finnish Companies Act on treasury shares apply to the forfeited shares and the company may keep the shares in its possession or cancel or transfer them in accordance with the provisions of the Finnish Companies Act. 

Which shares would the forfeiture concern?

The possible forfeiture concerns only those shares on the joint account with respect to which the shareholder has not taken care of the transition from paper share certificates to the book-entry system, i.e., has not presented to the company the paper share certificate or an account of the cancellation of the share certificate and in this way had his/her shares registered on his/her book-entry account. The shares registered on Orion Corporation’s joint account as at 31 March 2020, a total of 123,550 shares (63,650 Class A shares and 59,900 Class B shares) correspond to approximately 0.09% of the company’s total shares. To avoid a possible forfeiture, the shareholder must make the declaration for registration without delay and at the latest on the date set by the Annual General Meeting (according to the notice to Orion Corporation’s Annual General Meeting, on 6 May 2020). The possible forfeiture does not concern shares already registered on a personal book-entry account or nominee-registered shares, with respect to which the shareholders thus do not need to take any measures. 

How to make a declaration for registration?

To be able to have your shares registered on the joint account transferred to your personal book-entry account, you need to have a book-entry account. In case you do not already have a book-entry account, you need to open one at the bank of your choice. The declaration for the registration of shares on a book-entry account (declaration for registration) and the original paper share certificate must be sent as a registered letter or otherwise verifiably to Orion Corporation’s contact person Heli Saukkola at the address Orionintie 1, 02200 Espoo, Finland at the latest on the date set by the Annual General Meeting (according to the notice to Orion Corporation’s Annual General Meeting, on 6 May 2020). In case the share certificate is not in the name of the shareholder making the declaration for registration, it is also necessary to present a reliable account on how the shareholder has acquired the share certificate. When the company has received the necessary documentation, the company contacts the bank, where the shares will be registered on the shareholder’s book-entry account. 

How to proceed if the share certificate has been lost or destroyed?

If you know that you own shares on the joint account but the share certificate has been lost or destroyed, you need to file a petition for the cancellation of the share certificate at the District Court of Länsi-Uusimaa at the latest on the date set by the Annual General Meeting (according to the notice to Orion Corporation’s Annual General Meeting, on 6 May 2020). In connection with the petition for cancellation, you need to present a copy of the share certificate or an account of the content of the share certificate as well as an account of the legal basis of the petitioner’s ownership of the share certificate, i.e., at least an excerpt from the share and shareholder register, which you can obtain from Orion Corporation’s contact person Heli Saukkola (treausry@orion.fi, tel. +358 10 426 3732). In addition to the petition for cancellation made to the District Court of Länsi-Uusimaa, you need to deliver a declaration for registration as a registered letter or otherwise verifiably to Orion Corporation’s contact person Heli Saukkola at the address Orionintie 1, 02200 Espoo, Finland at the latest on the date set by the Annual General Meeting (according to the notice to Orion Corporation’s Annual General Meeting, on 6 May 2020). Mention in your declaration for registration also the on-going cancellation procedure. The cancellation procedure takes even at minimum several months. When the District Court has ruled on the cancellation, deliver the ruling as a registered letter or otherwise verifiably to Orion Corporation’s aforementioned contact person at the latest on the date set by the Annual General Meeting (according to the notice to Orion Corporation’s Annual General Meeting, on 30 November 2020). When the company has received the necessary documentation, the company contacts the bank, where the shares will be registered on the shareholder’s book-entry account.

Will dividends be paid retroactively?

Receiving the dividends that are not statute-barred does not require any additional measures from the shareholder once the declaration for registration has been completed. Dividends will be paid to the bank account connected to the book-entry account retroactively for three years in accordance with the Finnish Act on the Statute of Limitations on Debt, and the bar date is calculated from the original payment date of the dividend set out in the resolution of the Annual General Meeting.

Is the share certificate worthless after the forfeiture?

In case Orion Corporation’s Annual General Meeting resolves on the forfeiture of the shares on the joint account and of the rights that such shares carry, such shares become treasury shares and the shareholder forfeits all his/her rights to the shares, i.e., the share certificate no longer entitles to Orion Corporation’s shares. The corresponding rights in Oriola Corporation’s shares and forfeitures related to them are determined in accordance with resolutions made by Oriola Corporation. Oriola Corporation’s Annual General Meeting has on 17 March 2020 resolved on the forfeiture of the shares in Oriola Corporation on the joint account and of the rights that such shares carry.

Subscription rights in the 1993 bonus issue

Subscription rights in the share issue without payment (so-called bonus issue) carried out by Orion Corporation’s predecessor Orion-yhtymä Oy in 1993 are still registered on certain personal book-entry accounts, and the corresponding shares are currently registered on Orion Corporation’s joint account because all subscription rights have not been used to subscribe for shares. The subscription rights in the 1993 bonus issue registered on a book-entry account still entitle to subscription of Orion Corporation’s shares. However, the Finnish Companies Act makes it possible for the Annual General Meeting to resolve on the forfeiture of shares issued in a bonus issue in case the recipient has not after ten years have passed from the registration of the share issue decision taken the measures required of the recipient to receive the share(s). The proposed forfeiture of the shares in Orion Corporation on the joint account and of the rights that such shares carry also covers the shares on the joint account corresponding to the unused subscription rights in the 1993 bonus issue.

In case you have subscription rights in the 1993 bonus issue registered on your book-entry account, please contact Orion Corporation’s contact person Heli Saukkola (treasury@orion.fi, tel. +358 10 426 3732) without delay and at the latest on the date set by the Annual General Meeting (according to the notice to Orion Corporation’s Annual General Meeting, on 6 May 2020) to exercise and/or sell your subscription rights in order to avoid a possible forfeiture.