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Courts

AP7 claims victory over Facebook’s proposal to introduce non-voting shares

AP7, Stockholm, successfully fought off Mark Zuckerberg's plan to introduce non-voting shares for minority Facebook shareholders, said Richard Grottheim, CEO of the 375.9 billion kronor ($47.1 billion) pension fund.

The Swedish pension fund led a lawsuit against the Facebook founder on behalf of minority investors, which combined hold $10 billion worth of investments in the social media giant, Mr. Grottheim said.

Mr. Zuckerberg intended to reclassify minority investors' shares into C shares, which would have left investors powerless during board meetings and would have caused AP7's shares to take a dive, Mr. Grottheim said in a telephone interview. Mr. Zuckerberg withdrew the plan on Sept. 22, 18 months after his proposal.

Mr. Grottheim added in a separate emailed comment: "AP7 agreed to lead this litigation because we believed that the reclassification would create a terrible corporate governance scheme. If Mark Zuckerberg wants to sell his stock and become a philanthropist, he should do that. But he should not be allowed to keep controlling Facebook while devaluing current stockholders after he does so."

The pension fund was represented by Kessler Topaz Meltzer and advised by KPMG.