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PL
On 30 July 2007, a lawsuit was filed by Manchester Securities Corporation (“MSC”), with the registered office in New York, against PZU regarding cancellation of the General Meeting of Shareholders of PZU’s Resolution No. 8/2007 of 30 June 2007 on distribution of PZUs’ profit for 2006 as non-compliant with best practices and acting to the detriment of the plaintiff, a shareholder of PZU.
The contested resolution of the General Meeting of Shareholders of PZU distributed the 2006 profit of PLN 3,281 million in the following manner:
- PLN 3,261 million to the supplementary capital;
- PLN 20 million to the Social Benefits Fund.
Through its ruling, on 22 January 2010, the District Court in Warsaw cancelled the aforementioned resolution. PZU appealed against the judgment in its entirety, including final appeal to the Supreme Court with respect to the aforementioned decision, which dismissed the cassation complaint on 27 March 2013. The judgment is final and non-appealable.
PZU believes that cancelation of the above GMS resolution does not give rise to shareholders’ claim for dividend.
Following the decision cancelling resolution No. 8/2007 becoming effective, the agenda of the PZU GMS of 30 May 2012 included a point regarding distribution of profit for 2006 in a manner corresponding to the cancelled resolution No. 8/2007. Manchester Securities Corporation objected to the resolution of 30 May 2012, which was recorded in the minutes.
On 20 August 2012, PZU received a copy of the lawsuit filed by MSC with the District Court in Warsaw, which stated that said company sought the cancellation of the resolution of the General Meeting of Shareholders of PZU dated 30 May 2012 on the distribution of profit for 2006, and the value of the subject of dispute was determined by the plaintiff at the amount of PLN 5 million. PZU filed its response to the lawsuit seeking the dismissal of the lawsuit in its entirety.
On 17 December 2013, the District Court pronounced a judgment whereby the claims were accepted in their entirety and the costs of the proceedings were awarded from PZU to MSC. On 4 March 2014, PZU appealed against the judgment in its entirety. On 11 February 2015, the Appellate Court in Warsaw passed a judgment that changed the judgment of the District Court dated 17 December 2013 in its entirety, dismissed the action filed by MSC and ordered MSC to pay the costs of the proceedings. The judgment of the Appellate Court is final and non-appealable. MSC filed a cassation appeal on 9 June 2015 against the judgment of the Appellate Court in its entirety. PZU filed its response to the cassation appeal. With the decision issued on 19 April 2016, the Supreme Court refused to accept the cassation appeal of MSC for consideration. The decision is final, no further appeal may lie on the order of the provisions of the Code of Civil Procedure and it ends the legal proceedings concerning the matter.
Meanwhile, on 16 December 2014, MSC called PZU to pay PLN 265 million of compensation due to the cancellation of the resolution No. 8/2007 of the General Meeting of Shareholders of PZU dated 30 June 2007 on the distribution of profit of PZU for 2006. PZU declined to fulfil the obligation because the obligation was not valid.
On 23 September 2015, PZU received a copy of a motion with attachments regarding the action initiated by MSC against PZU for the payment of PLN 169 million with statutory interest accrued from 2 January 2015 until the date of the payment. The action includes a claim for compensation for the deprivation of MSC and J.P. Morgan (MSC acquired the claim from J.P. Morgan), as minority shareholders of PZU, a share in the profit for the year 2006, in connection with a Resolution No. 8/2007 adopted by the General Meeting of Shareholders of PZU on 30 June 2007. The case is being handled by the District Court in Warsaw. On 18 December 2015, PZU filed its response to the lawsuit seeking the dismissal of the lawsuit in its entirety. On 1 April 2016, MSC filed a pleading in which it addressed the claims, charges and motions of PZU and provided further evidence in the case. On 30 June 2016, PZU replied to the last pleading of MSC and provided evidence motions. With the decision issued on 21 July 2016, the Court referred the case to mediation, on which PZU did not grant consent. The date of another hearing during which evaluation of the evidence is to take place has been determined at 31 March 2017.
According to the Management Board, MSC's claims are unfounded. As a result, as at 30 September 2016, no changes in the presentation of PZU capitals were made that may result from cancellation of the Resolution No. 8/2007 of the General Meeting of Shareholders on the distribution of profit for 2006, including “Supplementary capital” and “Previous year profit (loss)”, as well as the funds appropriated to the Company’s Social Benefits Fund were not adjusted.
48.1.1. Other demands for payment concerning the distribution of profit of PZU for 2006
On 17 December 2014, Wspolna Reprezentacja SA called PZU to pay the amount of PLN 56 million and the amount of PLN 1 million as claims compensation acquired from the shareholders as a response to their deprivation of the right to a share in the profit of PZU. PZU declined to fulfill the obligation because the obligation was not valid.
Apart from the above mentioned documents, the shareholders or the former shareholders or their successors in title presented PZU with a request for payment based on the facts presented above. The parties requesting the payment did not indicate specific amounts, but a number of shares, or simply requested the payment. PZU submit ted a response in writing indicating that such claims did not exist and they would not be taken into account.
48.1.2. Other legal proceedings concerning the distribution of profit of PZU for 2006
On 19 January 2015, the District Court of Warsaw delivered a copy of a motion with attachments regarding the action initiated by Wspolna Reprezentacja SA for a summons to a conciliation hearing concerning the amount of PLN 56 million. At the hearing on 19 February 2015, PZU refused to conclude a settlement.
PZU received other copies of motions to summon a conciliation hearing concerning settlement agreements consisting in the payment of the amount due to the share in the profit of PZU for 2006. Some of the proceedings have already ended. PZU refused the conciliation proposal indicating that such claims did not exist and they would not be taken into account.
7 legal actions were initiated against PZU for the payment of dividends or compensation. PZU consistently responds to such requests demanding their cancellation in their entirety. In six cases, the District Courts in Warsaw dismissed the claims in their entirety (in five cases the judgments are final, in one case the claimant appealed against the decision, to which PZU has responded by demanding its dismissal in its entir ety). In one case, the District Court discontinued the proceedings due to the withdrawal of the claim (the decision is final).
