Question

How far does the Companies Act 2001 of Mauritius recognize the principles of shareholder activism?

Answer 1

ANS: - Mauritius Statute law on companies is continued in the Companies Act 2001 (" The Companies Act "), which was modelled after its counterpart from New Zealand. The Law Commission Endorsed the View that :-

• Enabling the function of company law should be seen as a standard contract that reduced the cost of organising a business enterprise.
• Regulatory function should protect the abuse of management power.

A shareholder activism allows the shareholder to take greater ownership & reponsibility of the company & to voice thier dis-approval on issues ranging from " non-financial issues" like Enviornmental ,social , Governance etc. to unlocking additional value & earning the better return on their investments.

Over the last three decades, Mauritian government worked with the International bodies to revamp the country's regulatory framework for companies. The mauritian economy has emerged from its dual colonial past (both by British & French )with the number of challenges. One of the main challenge was that it was dominated by few large conglomerates & state institution operating in a weak regulatory enviornment.

Shareholder Activism demonstrates the a simple phenomenon how shareholder take control of situation to turn into their favour.Mauritius has rather low Shareholder activism framework. Shareholder activism is a domain where much research & development should be effected as its represents a promising improvement in the way corporations are governed. As the shareholder activism is new to mauritius legislation, it has been put forward in the mauritius context which may be of use to shareholders concerned.

Activism

Mauritian Instutional Investors have not generally played an active role in ensuring that companies are managed for all its shareholders. To increase the confidence of investors in the Mauritian Capital market, it is essential that mauritian Institutional investor follows the lead given bt their counterpart in overseas capital  market & increase their level of activism at meetings of shareholders.