Does this action set a precedent that affects the risks associated with the ordinary shares or bonds of Irish companies? I hold ordinary shares in 3 Irish companies, one of which has a majority share holder. Could such action be extended to other Irish companies if they are deemed essential, or even just important to the Irish economy?


Until there is a court case proving them illegal coercive tenders could be used by anyone since that doesn't require the Government to have implemented an SLO.
John Hemming and other have produced precedents which strongly support this being illegal under English Law but it hasn't stopped the Irish Government so far and hence isn't guaranteed to stop anyone else. Today it is bondholder being targeted but tomorrow you could have coercive action against shareholders.

The SLO is at the moment more restricted since the Government has to apply such legislation and currently it only applies to Bank Sub-debt. However it sets a dangerous precedent for any Irish Government involvement in a company. Once the Government is a part-owner or considers it essential for the economy that a company survives there is no guarantee that they couldn't enact similar legislation to rewrite contracts.

At the moment I think the chances of SLO type legislation being extended outside of the Banking sector is fairly low but you could easily get on a slippery slope from Banking to Insurance to other sectors.


Dave