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Commercial Law — Company law — Auditors

Date Citation Note
03.12.1991 Com. 1576 Bull. Civ., n° 379, 259 Dalloz Inform. Rapide p.30 Case Beaunier v. Lemoigne Conditions for removing the company auditor
Action to remove company auditor who exasperated management by an excess of zeal. An auditor is in a contractual relationship with the company audited, but his independence, necessary to enable him to alert the relevant authorities in certain circumstances as required by law, must be protected. Consequently, he can be removed only by the court on application by the company.
Held:
The court will require serious grounds to so order. In this case, there was no evidence of bad faith by the auditor, and the Court of Versailles should not have ordered his removal merely because it found his conduct so excessively zealous that it exasperated management.
10.12.1973 Com. 355 Application for Review N° 72-12.238 Case Société d’Alimentation de Provence (S.A.P.) v. Groupement des Actionnaires de la Société d’Alimentation de Provence This case is part of a long and continuing battle by groups of minority shareholders to obtain information from, and influence, the management of public companies. Article 226 of the French Companies Law (24 July 1966) as it was in force at the time provided that one or more shareholders representing at least 10% of the capital of a public company (“société anonyme”) could bring an action for the appointment of an expert to report on one or more transactions carried out by management. Certain shareholders holding more than 10% of the capital of the plaintiff company grouped themselves into an association for this purpose. The court held that the association had no standing to bring such an action; only the shareholders themselves could do so.
The position is somewhat different now; Article 226 of the law has been modified and is now Article L225-231 of the Monetary and Financial Code, which enables approved associations and individual shareholders, representing 5% of the capital, to ask written questions of the Chairman about management transactions of the company or its subsidiaries, and, in case of failure to reply or to provide satisfactory information within one month, to bring action for the nomination of a reporting expert .