Doing Business Reforms: PROTECTING MINORITY INVESTORS

Commercial courts have helped a lot in protecting minority investors.

Protecting minority investors matters for the ability of companies to raise the capital they need to grow, innovate, diversify and compete. Effective regulations define related-party transactions precisely, promote clear and efficient disclosure requirements, require shareholder participation in major decisions of the company and set detailed standards of accountability for company insiders.

Rwanda has a score of 5.2 points on the strength of minority investor protection, with a higher score indicating stronger protections.

Economies with the strongest protections of minority investors from self-dealing require detailed disclosure and define clear duties for directors. They also have well-functioning courts and up-to-date procedural rules that give minority shareholders the means to prove their case and obtain a judgment within a reasonable time. As a result, reforms to strengthen minority investor protections may move ahead on different fronts – such as through new or amended company laws, securities regulations or civil procedure rules.

Minority investor protection reforms recorded in Rwanda since 2014 are:

In 2014, Rwanda strengthened investor protections through a new law allowing plaintiffs to cross-examine defendants and witnesses with prior approval of the questions by the court.

In this year’s report, Rwanda strengthened minority investor protections by introducing provisions allowing holders of 10% of a company’s shares to call for an extraordinary meeting of shareholders, requiring holders of special classes of shares to vote on decisions affecting their shares, requiring board members to disclose information about their directorships and primary employment and requiring that audit reports for listed companies be published in a newspaper.

  • By Rwanda Development Board
  • Posted 11th May 2017

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