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Necessity of electronic confirmation of receipt when voting rights are exercised electronically at annual general meetings

Since spring 2020, many general meetings have been held virtually rather than in person due to the pandemic. This was made possible by the COVID Mitigation Act, which, among other things, opens up the possibility of holding general meetings virtually even without special authorization by the Articles of Association or bylaws. This option will be available until August 31, 2022. In view of the current development of the pandemic, it is to be expected that annual general meetings will continue to be held virtually in many cases in the near future.

Usually, the virtual general meeting is also associated with electronic voting. But even independent of the pandemic, it is possible to enable shareholders to participate virtually and to exercise their voting rights electronically. The prerequisite for this is, pursuant to Sec. 118 (1) sentence 2 of the Stock Corporation Act (AktG), that the Articles of Association provide for this or authorize the executive board to do so. In addition, the Articles of Association may also provide for the possibility of an electronic "postal vote" in accordance with Sec. 118 (2) sentence 1 AktG. For this purpose, it is sufficient if a communication channel is opened that enables shareholders to cast their votes before or even during the meeting.

If the voting right is exercised electronically, the company must confirm receipt of the vote electronically to the person casting the vote immediately after it has been cast. This applies both to electronic voting as part of virtual participation in a general meeting and to electronic voting without virtual participation. The purpose of the provision is to inform the shareholder that his vote has been successfully transmitted in order to enable him to cast his vote again if the confirmation is not received. In addition, the shareholder may file an action for annulment if the vote is not accepted.

In order to be able to confirm receipt of the electronically cast vote immediately, the confirmation must generally be automated. The stock corporation may also use a technical service provider for this purpose. The confirmation of receipt must, according to Sec. 118 (1) sentence 3 AktG in conjunction with Art. 7 (1) in conjunction with table 6 Commission Implementing Regulation (EU) 2018/1212, contain the following information:

1. unambiguous identification of the confirmation of receipt of the votes by means of a unique number
2. indication that it is the confirmation of the receipt of the vote
3. unique identification of the event
4. ISIN (if the company is listed on the stock exchange)
5. date of the general meeting
6. name of the issuer or the stock company
7. name of the person confirming (issuer of the confirmation)
8. name of the person who voted
9. name of the shareholder

Consequences of a breach of the confirmation requirement

If confirmation of receipt of an electronically cast vote is not provided at all or not provided in the prescribed manner, this constitutes an administrative offense pursuant to Sec. 405 (2a) No. 7 AktG, which can be punished with a fine of up to 25,000 Euros pursuant to Sec. 405 (4) AktG.

In addition, a breach of the duty of confirmation is in principle a procedural error entitling a resolution to be challenged. However, if the breach of the confirmation obligation occurs in the context of annual general meetings held up to and including August 31, 2022, Sec. 1 (7) of the COVID Mitigation Act (COVMG) stipulates that a challenge to a resolution of the annual general meeting cannot be based on the breach of the confirmation obligation unless the executive board can be proven to have acted intentionally. This may be the case if the executive board deliberately fails to provide confirmation of receipt.

Apart from this special provision, all annual general meetings, including those held after August 31, 2022, will generally lack the relevance of the error to the outcome of the resolution required for a successful challenge. For if only the confirmation of receipt is missing, but the vote was properly counted, the omitted confirmation will have no effect on the outcome of the resolution. The challenge of the resolution then cannot be based on the non-confirmation of receipt.

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