Can I Request a Special Auditor for Suspicious Transactions in a Joint Stock Company?

Shareholder Disputes

Prepared by: Constantinople

A special audit may be used to clarify particular company transactions; it is not a means of investigating the company's entire history without a reason. In a joint stock company, prior exercise of information or inspection rights, the event to be clarified and its connection with shareholder rights matter. Supporting a suspicion with a specific transaction and document makes the request's purpose clear.

For example, the price of a sale to a related party or an unexplained payment may be treated as a specific event. Prepare the general meeting notice, questions and answers, financial statements, meeting minutes and available transaction documents. If the matter was never raised at the meeting, its effect on the application sequence must be examined. Collecting every unrelated complaint in one list may obscure the event requiring examination.

Whether the general meeting accepts or refuses the request changes the conditions for applying to the court. Following refusal, the shareholding percentage or other statutory thresholds and the application deadline are assessed separately. It cannot therefore be said that every shareholder can request court appointment of an auditor on identical conditions at every stage. A special audit request does not automatically determine a director liability action.

Prepare the specific transaction you wish to clarify, earlier information requests and the general meeting minutes. The requirements for requesting a special auditor are determined by reference to those earlier applications.

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