A Unilever shareholder has implied that it would likely vote against the plan of the consumer giant to relocate its headquarters to Amsterdam in order to simplify the corporate structure of the company. The move is set to abandon the 88-year dual-governance structure of the firm in London and Amsterdam.
In a report that was published by the Times, it revealed that the third largest shareholder of Unilever, Lindsell Train, may likely vote against the decision on the grounds that it would result in the forced sale of shares of Unilever and mean that the shareholders in the United Kingdom may have to bear some tax risks in the Netherlands that may withhold their dividends.
The maker of Marmite prompted a backlash when it revealed the move, with many commentators hinting that it could be because of Brexit. The firm, however, denied the claim. It said that the rationale behind the move was to enable it to simplify its dual-share structure.
The joint founder of Lindsell Train, Nick Train, informed the newspaper that the decision outlined a “possible reduction of the dividend stream.”
He stated: “The fact is the company is not offering a perpetuity guarantee that current Unilever plc shareholders will never suffer from any future change in Dutch tax policy.”
This decision was partly made since the government of the Netherlands vowed to abolish dividend tax. Last year, Mark Rutte, the Dutch Prime Minister, announced plans to scrap the tax by 2020, however, it has not drummed up enough support.
The British-Dutch firm assumes that dividend tax will already be a thing of the past in the Netherlands by 2020, however, even if it isn’t, NOS reports that this plan will still enable Unilever to set up its head office in Rotterdam without its shareholders losing out.
Eearlier this week, Unilever told Reuters that if the tax is not scrapped, it could make use of a “substitution payment mechanism” in order to distribute capital in a way that does not trigger the 15 percent tax.