Constitutional Court Declares Protection Order for Owners of Preferred Shares Unconstitutional

The Constitutional Court (CC) declared unconstitutional paragraphs 1 of article 5 and 3 of article 42 of the ‘On Joint-Stock Companies’ law. These regulations governed the protection order for owners of preferred shares if the company fails to pay dividends. Previously, if dividends were declared for common shares, companies were not obliged to do the same for preferred shares, leaving owners of those shares unprotected. This decision aims to ensure equal treatment for all shareholders, regardless of the type of shares they own.