ING Direct 2011 Annual Report Download - page 318

Risk factors continued
ADDITIONAL RISKS RELATING TO OWNERSHIP OF ING SHARES
Because we are a Dutch company and because the Stichting ING Aandelen holds more than 99.9% of our ordinary shares,
the rights of our depositary receiptholders may differ from the rights of shareholders in other jurisdictions or companies
that do not use a similar trust structure, which could affect your rights as an equity investor.
While holders of our bearer depositary receipts are entitled to attend and speak at our General Meeting of Shareholders (‘General Meeting’),
voting rights are not attached to the bearer depositary receipts. Stichting ING Aandelen (‘the Trust’) holds more than 99.9% of our ordinary
shares, and exercises the voting rights attached to the ordinary shares (for which bearer depositary receipts have been issued). Holders of
bearer depositary receipts who attend – in person or by proxy – the General Meeting must obtain and are entitled to voting rights by proxy
from the Trust. Holders of bearer depositary receipts and holders of the ADSs (American depositary shares) representing the bearer
depositary receipts who do not attend the General Meeting may give binding voting instructions to the Trust. The Trust is entitled to vote on
any ordinary shares underlying the bearer depositary receipts for which the Trust has not granted voting proxies, or voting instructions have
not been given to the Trust. In exercising its voting discretion, the Trust is required to be guided primarily by the interests of the holders of
bearer depositary receipts, while also taking into account:
• our interests; and
• the interests of our affiliates.
The Trust may, but has no obligation to, consult with the holders of bearer depositary receipts in exercising its voting rights in respect of
any ordinary shares for which it is entitled to vote. These arrangements differ from practices in other jurisdictions, and accordingly may
affect the rights of the holders of bearer depositary receipts and their power to affect ING’s business and operations.
The share price of ING shares has been, and may continue to be, volatile.
The share price of our bearer depositary receipts has been volatile in the past, and the share price and trading volume of our bearer
depositary receipts may continue to be subject to significant fluctuations due, in part, to changes in our actual or forecast operating results
and the inability to fulfil the profit expectations of securities analysts, as well as to the high volatility in the securities markets generally and
more particularly in shares of financial institutions. Other factors, besides our financial results, that may impact our share price include, but
are not limited to:
• market expectations of the performance and capital adequacy of financial institutions in general;
• investor perception of the success and impact of our strategies;
• investor perception of our positions and risks;
• a downgrade or review of our credit ratings;
• the implementation and outcome of our Restructuring Plan;
• potential litigation or regulatory action involving ING or sectors we have exposure to through our insurance and banking activities;
• announcements concerning financial problems or any investigations into the accounting practices of other financial institutions; and
• general market circumstances.
There can be no assurance that we will pay dividends on our ordinary shares in the future.
It is ING’s policy to pay dividends in relation to the long-term underlying development of cash earnings. Dividends can only be declared
by shareholders when the Executive Board considers such dividends appropriate, taking into consideration the financial conditions then
prevailing and the longer-term outlook. Given the uncertain financial environment, ING will not pay a dividend over 2011 and there can
be no assurance that we will pay dividends in the future.
The remaining core Tier 1 Securities issued to the Dutch State may be converted into ordinary shares or bearer depositary
receipts and dilute existing shareholders.
The terms of the core Tier 1 Securities permit us, on or after 12 November 2011, to convert any or all of the remaining core Tier 1 Securities
(EUR 3 billion per 11 May 2011) into ordinary shares or bearer depositary receipts on the basis of one core Tier–1 security for 1,335 ordinary
shares or bearer depositary receipts. Any such conversion would dilute existing shareholders. If we exercise our conversion right, the Dutch
State may opt to require us to redeem the core Tier 1 Securities on the conversion date at the original issue price of EUR 10 per core Tier 1
Security, together with the pro rata coupon, if due, accrued to such date.
Certain holders of ING shares may not be able to participate in future equity offerings with subscription rights.
We may undertake future equity offerings with or without subscription rights. In case of equity offerings with subscription rights, holders
of ING shares in certain jurisdictions, however, may not be entitled to exercise such rights unless the rights and the related shares are
registered or qualified for sale under the relevant legislation or regulatory framework. Holders of ING shares in these jurisdictions may
suffer dilution of their shareholding should they not be permitted to participate in future equity offerings with subscription rights.
316 ING Group Annual Report 2011