Court sides with STE board in shareholder spat

The commercial court in Paris has sided with the board of French REIT Société de la Tour Eiffel (STE) in a dispute with shareholder and businessman Chuc Hoang.

Hoang's company M.I. 29 holds about a quarter of the share capital in Paris-listed STE.

The president of Paris Commercial Court dismissed M.I. 29's attempt to force the nomination of a legal representative who would call a general shareholders' meeting seeking the ouster of STE's current board.

The court ruled that nothing justified 'M.I. 29’s thesis that the board is no longer qualified to manage the company'. The judge also said that it would be paradoxical for the court to intervene with the normal management of a company on the basis that a new shareholder holding a quarter of the capital had become hostile.

STE's board has claimed that despite previous assurances to the contrary, M.I. 29 was seeking to take control of the French REIT.

In October private equity group Patron Capital cited the uncertainity created by the dispute when it broke off talks with STE about a shares-for-property swap. The two parties had been in exclusive negotiations since 20 September 2013.

Under the proposed deal, Société de la Tour Eiffel was to offer Patron shares totalling 8.4% of its share capital in exchange for a 20,000 m2 office complex on the fringes of Paris.