Carri Ginter and Kaspar Endrikson: Goodbye dividends and executive bonuses!

Rules for state holdings in struggling companies set. Comment by sworn lawyers Kaspar Endrikson and Carri Ginter.

It has been discussed in Estonia whether one way to help companies struggling in the COVID-19 crisis could be for the state to acquire a piece (i.e. in the context of Tallink and Bolt). The European Commission published new state aid rules on the evening of May 8, following which Estonia could acquire stakes in private companies.

Such state aid could considerably distort competition and through it reduce consumers’ choice or hike prices of services. That is why a capital injection from the state would be accompanied by handcuffs to limit the recipient’s operating freedom that could in turn cool firms’ enthusiasm for entering into such a relationship with the state.

More on that topic: https://news.err.ee/1088346/carri-ginter-and-kaspar-endrikson-goodbye-dividends-and-executive-bonuses (in English) and https://www.err.ee/1087909/carri-ginter-ja-kaspar-endrikson-head-aega-dividendid-ja-juhtide-boonused (in Estonian)