Article 118 of the Law on Enterprises 2020 provides as follows:
Redeemable preference shares and rights of shareholders holding redeemable preference shares
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Redeemable preference shares are shares for which the company refunds the contributed capital upon the request of the holder or under conditions specified in the share certificate of the redeemable preference share and in the company’s Charter.
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Shareholders holding redeemable preference shares shall have the same rights as ordinary shareholders, except as provided in Clause 3 of this Article.
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Shareholders holding redeemable preference shares shall not have the right to vote, attend the General Meeting of Shareholders, or nominate candidates to the Board of Directors and the Supervisory Board, except as provided in Clause 5, Article 114 and Clause 6, Article 148 of this Law.
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Clause 5, Article 114 stipulates: Ordinary shares cannot be converted into preference shares. Preference shares may be converted into ordinary shares pursuant to a resolution of the General Meeting of Shareholders.
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Clause 6, Article 148 stipulates the conditions for adoption of resolutions of the General Meeting of Shareholders: A resolution of the General Meeting of Shareholders concerning contents adversely affecting the rights and obligations of shareholders holding preference shares shall only be adopted if it is approved by shareholders of the relevant class of preference shares attending the meeting holding at least 75% of the total number of such preference shares, or by shareholders of the relevant class holding at least 75% of the total number of such preference shares in the case of a resolution adopted in the form of written consultation.
