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The Journal of Applied Science University
An International Journal


Volumes > Vol. 06 > No. 01


Converting Bond to shares between the Possibility and the Nullity in Light of the Bahraini law

PP: 201-228
Nashat Jaradat, Ghassan Sarhan,
Usually, the rules are characterized as relatively stable, so they are usually not affected by many changes, and the developments that affect these laws do not affect this stability. Organizing relationship between individuals them self or between individuals and society represented by the state is the overriding goal of enacting any legal rule either in private or public law. The Bahraini trade law, it was amended again on January 11, 2018, according to Law No. 1 of 2018 published in the Official Gazette No. 3348, and despite all the amendments mentioned above, which in the researcher opinion, are directed towards easing the restrictions imposed on companies, in particular with The state’s orientation towards open market economies, and attracting capital, which by its nature calls for easing legal restrictions to achieve the required attractive investment environment, whether we agree or disagree with the model to be activated, since we are not specialized in the economy, the need to amend laws to keep pace with that trend cannot be denied. Therefore, the law needed more amendments, including on April 2, 2020, according to Law No. 6 of 2020 published in the Official Gazette No. 3465, as well as the last change issued by Decree-Law No. 28 of 2020, which we will discuss in detail in the following research, especially concerning the transfer of the bond to share according to what was stated in the amendment issued which allowed the companies issuing borrowing bonds to convert those bonds that were not put on the market as convertible bonds for shares in the company without requiring the approval of the bondholder, which is the matter that the present research focuses on and approximates it in several legal ways to reach the result represented In the need again to amend the law to avoid the legal impasse in this amendment, we will be exposed in some detail in the coming investigations. Just as the previous need to amend many texts in the Bahraini law for several needs as mentioned above, this time the researcher opinion is we need to amend the law again to avoid legal distress and the legal problem that the application of the law will encounter, since the transfer of the non-convertible bond to a share in the company without requiring the bond bearer approval is defective in the shareholding contract resulting from that transfer by the defect of lack of consent, which we will discuss in some detail in the next research.

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