LECTURE ON GOOD CORPORATE GOVERNANCE
Looking back on the future: the further development of corporate governance in Curaçao
A seminar on Checks and Balances in Corporate Governance on Curacao, was held on Thursday February 21st, 2013. More than 125 interested managing directors, supervisory directors, lawyers, accountants and other participants were in attendance.
The seminar was organized by the Board of financial supervision (College financieel toezicht – Cft), the Foundation Bureau for Supervision and Standardization Government Entities (Stichting Bureau Toezicht en Normering Overheidsentiteiten – SBTNO) and the Dutch Caribbean Accountants Association (DCAA). I had the honor to speak on the present and future of the Corporate …
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TAKING OVER CONTROL OF A CURACAO COMPANY THROUGH A FOREIGN COURT DECISION
The powers of a foreign appointee will not be recognized
According to Curacao private international law, the appointment and dismissal of board members of a company as well as decisions limiting their powers is governed by the laws of the jurisdiction under which the company is incorporated. Accordingly, the appointment and dismissal of a board member of a Curacao limited liability company (NV or BV) as well as any limitation in respect of his powers must take place in accordance with Curacao law.
In the event a Curacao company has a foreign branch, e.g. in the United States, such company …
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GOVERNMENT AND CORPORATE GOVERNANCE (V)
Government drafted model articles of association
The first model articles of association date from March 15, 2011.
For criticism see: K. Frielink, Visie Land op overheids-NV’s verkeerd [Vision Country on government-owned NVs incorrect], Antilliaans Dagblad 15 April 2011, p. 16 and M.L. Alexander, F.B.M. Kunneman, L.G. Santine and R.J. in ’t Veld, Modelstatuten ten sterkste afgeraden [Model articles of association strongly discouraged], Antilliaans Dagblad 20 September 2011, p. 14-15. See also K. Frielink, Stop politieke benoemings- en ontslagcarrousel [Stop politicial appointment and dismissal merry-go-round], Antilliaans Dagblad 14 September 2010, p. 14-15.
In the meantime, the models for …
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GOVERNMENT AND CORPORATE GOVERNANCE (IV)
Code Corporate Governance Curacao
On January 1, 2010, the National Ordinance regarding corporate governance came into effect. Based on this the Code Corporate Governance Curacao came into being, that also came into effect on January 1, 2010. In it, reference is still made to the Executive Council and the island territory of Curacao, but as from October 10, 2010 these are understood to mean the government of Curacao and the Country Curacao.
The National Ordinance does not only undertake to establish a corporate governance code, but also to implement the Code in the government-owned companies. In 2011, this implementation obligation …
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GOVERNMENT AND CORPORATE GOVERNANCE (III)
The government is not automatically an ‘ordinary’ shareholder
It is obvious that in a small community such as that of Curacao, with only a limited choice when it comes to directors and supervisory directors to be appointed, and in which (family, social) networks seem to play an important role in making choices, there is a field of tension. It is even more important therefore that government has a clear vision regarding its shareholdership and that there are good and transparent procedures, e.g. regarding the appointment of directors and supervisory directors.
Does the obligation exist for the government to, briefly stated, …
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GOVERNMENT AND CORPORATE GOVERNANCE (II)
Government (not) at a distance?
Being a director of a government-owned company is certainly not always as easy. Neither is being a shareholder in a government-owned company. The directors will usually complain about too much influence from politicians, while the politicians will usually find that they have too little grip on government-owned companies. In this connection, there are two important topics we will have to consider briefly.
I will ignore cultural aspects here. In that respect see e.g. chapter 8 of the dissertation of A. van Marrewijk, Internationalisation, cooperation and ethnicity in the telecom sector, Delft: Uitgeverij Eburon 1999, 340 …
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GOVERNMENT AND CORPORATE GOVERNANCE (I)
For Hobbes, it is certain that there must be a sovereign
According to Thomas Hobbes we all have natural passions that carry us to, among other things, partiality, pride, and revenge. The laws of nature, as Hobbes sees them, including ‘justice’, ‘equity’, ‘modesty’, and ‘mercy’, are contrary to our passions. Therefore, we will only observe the laws of nature if we have fear of some power to cause them to be observed. According to him, covenants, without the sword, are but words that lack every strength to protect a person.
See Thomas Hobbes, Leviathan, Amsterdam: Boom 2007, p. 207 and …
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CURACAO COURT INTERVENES IN POLITICAL APPOINTMENT
Political appointments unacceptable
The Court of First Instance of Curacao passed judgment on 23 January 2012 in the case of Selikor N.V. versus Drs. Ivar Asjes (JOR 2012, 105). This case is a follow-up to the judgment of the Joint Court of Appeal of the Netherlands Antilles and Aruba of 10 August 2010, JOR 2010, 296. In a nutshell the case boils down to Asjes being appointed as the managing director of waste processor Selikor N.V., but that this is an appointment pushed through politically without an open job application procedure. This deprived at least six of Selikor’s members of …
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INQUIRY PROCEDURE IN CURACAO
Important court decision for the local trust practice
On 30 March 2012 the first petition for an inquiry procedure under the new law was dealt with by the Joint Court of Justice of Aruba, Curacao and St. Maarten, and of Bonaire, St. Eustatius and Saba. Karel Frielink and Dinesh Mishre had the honor of acting as lawyers for the defense … and with success! This decision is very important for the companies in Curacao and especially for the local trust offices.
As of 1 January 2012 the amended Corporate Code (Book 2 Civil Code) of Curacao entered into force. The …
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BANKING SUPERVISION IN CURACAO AND SINT MAARTEN
Prudential rules and requirements
The Central Bank of Curacao and St. Maarten is responsible for the care of the financial system’s health, effected through on and off site inspections of the banking and other financial institutions authorized to operate in Curacao and St. Maarten.
The National ordinance on the supervision of banks and credit institutions provides for requirements with regard to the prudential supervision in general. Such prudential supervision sees to the liquidity and solvency position of a bank.
The legislation provides for reporting requirements that need to be submitted to the Central Bank of Curacao and St. Maarten. On …
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SURPRISE RULING BY SINT MAARTEN COURT
Court introduces non-statutory transfer of employees
In the Netherlands (the European part of the Kingdom), when an undertaking (onderneming) is transferred from one person or entity to another, by operation of law the employees have an employment relationship with the new owner on the terms and conditions agreed with the old employer. For example, such a transfer of the employment relationship may occur in the case of a take-over or merger. Following the transfer, the new owner must respect all existing employment terms and conditions, including the terms of any applicable collective labor agreement. In principle, the rules with respect …
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ASSIGNMENT OF RECEIVABLES IN CURACAO
Notification no longer necessary for perfection of assignment
Under Curacao law the transfer of ownership requires transfer of title (levering) pursuant to a valid legal title (geldige titel) by a person who has the power of disposal over the asset (beschikkingsbevoegheid) being transferred. The rules on transfer of title (levering) are equally applicable to the creation of a right of pledge over receivables. Until recently, the Curacao Civil Code, allowed for the following two methods of transfer of title (levering) of receivables:
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