Report on International Business Law and Corporate - Westlands Group Plc

International Corporate Law & Governance

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
1. Stating the legal rights of the shareholders to take action against the organisation................1
2. Presenting the differences in the UK rules as compared to the other three countries like US,
Germany and Japan......................................................................................................................3
3. Stating the key features of CSR in the context of Westland and presenting the actions of
management for making its socially responsible.........................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
International corporate governance deals with system of rules and practices followed in
the organisation at global level. In this report, international business law and corporate
governance of Westlands Group PLC will be discussed on the basis of issues faced by
organisation. The company known for the activities like manufacturing equipment, helicopters,
aerospace structure and system. The report will assist the business to identify the validity of legal
actions taken by its minority shareholders. In addition, the corporate governance of US, Germany
and Japan will be discussed as organisation is expanding its business globally. Roles and
responsibility of board of directors, requirement for independent auditing and rules for setting
executive remuneration will be evaluated in this context. The key features of social responsibility
(CSR) will be identified in order to avail the fund from European Union for the development of
organisation.
1. Stating the legal rights of the shareholders to take action against the organisation.
The Westlands Group PLC sold its chemical engineering business to the Chinese
company as the organisation was facing some issues. The minority shareholders in the
organisation felt that company is making a big mistake and suffering a loss as a result of it.
Those shareholders hold some 15% of issued share capital of the company claiming that board
react carelessly and threatening for legal action against the board. Minority shareholders also
seeking the proposal of no confidence in the board, in the next annual general meeting (AGM),
that may harm the image and goodwill of the organisation in the market(Koutsias, 2017). On the
basis of this aspect, minority shareholders and their various rights will be identifiedin order to
support the argument and validity of their legal action and whether the board can prevent no
confidence resolution in next meeting will be discussed.
The Chinese company purchase the chemical engineering unit of Westlands Engineering
PLC. It is a legal process and a part of organisational growth strategies where the company sells
its unit in order to increase its market share, capital, technological developments, etc. The selling

of business unit affects its shareholders and stakeholders as they are directly and indirectly
related with the organisation. It is the responsibility of the board to inform the shareholders
regarding selling of the business unit. If board does not fulfil the responsibility then shareholders
have right to take legal action against the board. Shareholders possess various rights to defend
their and company's interest.
Minority Shareholders- A shareholder who owns less than half of the organisation shares
are considered as minority shareholders. They are provided with some benefits and various rights
to defend their as well as organisation’s interests. The benefits in terms of dividends provided to
shareholders are volatile and depend upon the stock price of the organisation. Westlands Group
PLC has many shareholders and stakeholders which influence the business of the organisation.
Shareholders are not allowed in most decisions, but they possess some rights which shows the
corporation's charter and laws (Wang and Lahr, 2017). Minority shareholders can take legal
action against the board if their rights are treated in unfair and wrongful manner. Various rights
of minority shareholder are basic and common. They are provided below:
1. Voting Rights- The minority shareholder possess the voting right and can elect the board
of directors and can make proposal for basic changes affecting the organisation such as
acquisition and mergers. Activities in relation to election and voting takes place in annual
general meeting of the company.
2. Possessions in part of Organisation assets- In process of company's liquidation the
debenture holders and majority shareholders are first paid. But in case of acquisition,
minority shareholders own a part of business asset which pertains value. They can claim
on the part of that asset which is owned by organisation (Barker, 2016).As those
assetsenable them to earn profits, which they can reinvest in additional asset.
3. Transfer of Ownership- Minority shareholder possess the right to transfer of ownership in
case of liquidation of organisation. Though they show lack of interest in transferring
ownership but stock exchange provides liquidity which is very important to the
shareholders (Deakin and et.al., 2017). Liquidity is one of ace factors that differentiates
shares from an investment for example, transfer of shares invested in real state.
4. Right to claim dividends- With claim on organisational asset, minority shareholders
possess the right to claim on the profits of the company in the form of dividends (Pozen,
Nallareddy and Rajgopal, 2017). It is based on the both the board and shareholders