What other circumstances might demonstrate that a minority investor in fact exercises a controlling influence?
In the past, the Board has generally prohibited a non-controlling minority investor from conducting any material business transactions or having material business relationships with the banking organization in which it has invested. However, the Board in the past has allowed business relationships limited quantitatively and qualitatively, particularly if the minority investment were closer to 10% than to 25%. The Board will continue to review such relationships on a case-by-case basis to determine whether they might involve a controlling influence. Past Board precedent and the 1982 policy statement also recognize that controlling influence might be exercised through the imposition by the investor of particular covenants accompanying the investment. In this regard, the Board has expressed particular concern about such covenants that might affect hiring, firing, executive compensation, engaging in new business lines, making substantial changes in operations, raising additional capital or
