A European court has put shareholders in a better position to be informed of important company decisions. The judges were ruling in the case of a Daimler CEO's resignation, which was communicated too late for some.
The European Court of Justice on Thursday boosted the rights of shareholders in a ruling related to the spectacular resignation of Daimler chief Jürgen Schrempp in 2005.
The Luxembourg court extended shareholders' rights to information about important company decisions. It ruled that decisions likely to have a decisive impact on the future development of stock values should be made public in ad-hoc statements while they are being debated in-house, and not just when the actual decisions are taken.
The decision came as a result of a shareholder complaint that he was informed too late about Jürgen Schrempp's intention to leave the automaker. He had sold his shares in the company shortly before Schrempp's resignation, thus missing a rally of Daimler stocks.
No decision on compensation yet
The Luxembourg judges sided with the plaintiff and said Daimler should have informed shareholders earlier about what was seen to be a possible move long before the decision was actually made.
Legal experts argued Thursday's ruling could have far-reaching repercussions for the rights of shareholders to timely information.
Daimler itself said it was too early to comment on the ruling and its consequences.
"We will carefully analyze the court's reasoning," the automaker said in a statement. "We have to wait and see what Germany's Federal Court of Justice (BGH) will make of the Luxembourg ruling.
hg/ncy (AFP, dpa)