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What is the difference between control and significant ifluence in relation to appoint board members ? And what are the conditions when even with more than 50 % shareholding control cannot be exercised
The concepts of “control” and “significant influence” relate to “the financial and operating policies of an entity” (see FR notes). Voting rights is the most obvious factor that determines whether an investor has control or significant influence over an investee. It is unlikely that with more than 50% of all voting rights an investor does not have control – since they alone could pass ordinary resolutions to appoint and remove directors from the board. However, if you refer to page 83 of the FR notes you will see that there could be contractual arrangements that affect control – and also, how the other votes are held.
If an investor has voting rights he gets the control and with significant influence investor gets power to participate in financing and operating policies of an entity ? Am i right with my concept
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