ING Direct 2004 Annual Report Download - page 43

CAPITAL AND CONTROL
Capital structure, shares
The authorised capital of ING Groep N.V. consists of ordinary
shares, preference A shares, five series of preference B shares
and cumulative preference shares. Currently, only ordinary
and preference A shares are issued, while a right to acquire
cumulative preference shares has been granted to the ING
Continuity Foundation (see page 49). The purpose of the
cumulative preference shares is to protect the company
against a hostile takeover, while the ordinary shares and
the preference shares are used solely for funding purposes.
The shares, which are all registered shares, are not listed on
a stock exchange.
Depositary receipts
Over 99% of the issued ordinary and preference shares are
held by the ING Trust Office (“Trust Office”). The Trust Office
issues bearer depositary receipts in exchange for these shares.
The depositary receipts are listed (see page 170 for an
overview of the listings). The depositary receipts can be
exchanged, without any restrictions, for the relevant types
of shares. A fee may be charged for this.
Although the depositary receipts themselves do not formally
have any voting rights, holders of depositary receipts are in
practice fully equated with shareholders with regard to
voting. Holders of depositary receipts attending a meeting
of shareholders, either personally or represented by a proxy,
have full voting rights on the Trust Office’s behalf, related
to the shares held by the Trust Office. Holders of depositary
receipts may vote as they see fit. Holders of depositary receipts
not attending a meeting can also issue binding voting
instructions to the Trust Office. The Trust Office has made
it easier for votes to be cast in this way by putting
arrangements in place for proxy voting and e-voting.
The Trust Office decides for itself how to vote in the case of
shares for which it has not issued proxy votes to holders of
depositary receipts and has not received any voting
instructions. The way in which the Trust Office votes will
reflect the interests of the holders of depositary receipts, but
will also take account of the interests of ING Groep N.V., the
businesses of ING Group and its group companies and all other
ING Group stakeholders, so as to ensure that all these interests
are given as much consideration and protection as possible.
The structure outlined above means that depositary receipts
are used to prevent a small minority of shareholders, which
coincidentally may form the majority in the meeting, from
taking decisions purely to suit themselves in the absence
of other parties at the General Meeting of Shareholders.
The board of the Trust Office comprises five members who
are independent of ING Groep N.V. No ING Group employees
or Supervisory Board members are on the board of the
Trust Office. The board of the Trust Office appoints its own
members, without any requirement for approval by ING Groep
N.V. It is the duty of the Trust Office to represent the interests
of all holders of depositary receipts, irrespective of whether
they attend the General Meetings of Shareholders.
The board of the Trust Office reports on its activities through
an annual report, which has been included as of page 47.
Voting rights
Each share entitles the holder to cast a vote at the General
Meeting of Shareholders. In accordance with the statutory
provisions, voting rights are proportional to the nominal value
of the shares. In other words, each ordinary share (nominal
value: EUR 0.24) gives the right to one vote, while each
preference A share (nominal value: EUR 1.20) gives the right
to five votes.
On the basis of the closing price of the shares on 31 December
2004, the ratio of market price to voting rights on depositary
receipts for ordinary shares was EUR 22.26 : 1, while the ratio
for depositary receipts for preference A shares was
EUR 3.37 : 5. There is an element of disequilibrium in this
respect. It should, however, be noted that the vast majority of
the depositary receipts for preference A shares were issued as
stock dividend on ordinary shares. The vast majority of holders
of ordinary shares and depositary receipts for ordinary shares
have, therefore, had the opportunity to obtain depositary
receipts for preference A shares. Since the issue of preference
A shares, new ordinary shares have been issued. It should also
be remembered that the market price of the depositary
receipts for preference A shares has been relatively flat
because of the financial rights attached to them. The market
price of the depositary receipts for ordinary shares, on the
other hand, has risen substantially over the years. Indeed, the
ordinary shares have been split on two occasions because of
how the share price has developed. It should also be noted
that the depositary receipts for preference A shares are freely
available on the stock market. Any holders of ordinary shares
or depositary receipts for ordinary shares who feel restricted
by the disequilibrium can, therefore, choose to purchase
additional depositary receipts for preference A shares. As it
is not possible to adapt the voting rights on the preference
A shares unilaterally, it is decided to await forthcoming
legislation that will link the voting rights for preference
shares to the market value of the shares.
Proposals by shareholders/holders of depositary receipts
In view of the size and market value of ING Groep N.V.,
proposals to put items on the Shareholders’ Meeting agenda
can only be made by shareholders and holders of depositary
receipts representing a joint total of 1 per mille of the share
capital or representing together, on the basis of the stock
prices on the Amsterdam Stock Exchange, a share value of at
least EUR 50 million. Given the periods of notice required for
proxy voting, proposals have to be submitted in writing and
at least 50 days before the date of the meeting. Properly
submitted proposals will be included on the agenda for the
General Meeting of Shareholders.
ING Group Annual Report 2004 41