Listed issuers to conduct fully virtual general meetings

by NUR HANANI AZMAN/ pic by RAZAK GHAZALI

THE Securities Commission Malaysia (SC) has issued a Guidance Note on the Conduct of General Meetings for Listed Issuers (Guidance Note) in which listed issuers shall conduct fully virtual general meetings during the Movement Control Order (MCO) period.

According to the Guidance Note, there should not be more than eight essential individuals physically present at the broadcast venue, which includes the chairperson of the general meeting, the CEO, CFO, company secretary, auditor and those providing audio-visual support.

However, the SC stressed that listed issuers should try to conduct the fully virtual meeting with as few individuals present at the venue as possible.

Those present must observe all social distancing guidelines, SC chairman Datuk Syed Zaid Albar (picture) said.

“This Guidance Note is necessary to ensure companies can continue to meet their obligations under the law and to shareholders during this MCO period.

“We also encourage companies to continue leveraging technology, even beyond the MCO period, to conduct meetings in a manner that will encourage and enable full shareholder participation, even from remote locations,” he said in a statement.

This is in line with Principle C (II) and Practice 12.3 of the Malaysian Code on Corporate Governance, where boards are encouraged to have effective, transparent and regular communication with shareholders including leveraging technology to promote shareholder participation.

Companies can submit an application to the SC for a time-limited travel exemption for the essential individuals to travel to the broad- cast venue for the fully virtual meetings.

The online voting process must allow members to cast their votes in time during the proceedings of the general meeting.

Hybrid general meetings, which involve multiple venues in different locations, shall only be conducted after the MCO period has ended, in order to adhere to the government’s directives to curb the spread of Covid-19.

The Guidance Note and the form to apply for the time-limited travel exemption can be downloaded from SC’s website www.sc.com.my/regulation/corporategovernance whereas any queries can be directed to [email protected].

Under section 340(2) of Companies Act 2016, a company shall conduct its AGM within six months of the company’s financial year and not more than 15 months after the last preceding AGM.

A listed issuer may also request an extension of time to conduct its AGM. Applications should be submitted to the Companies Commission of Malaysia pursuant to subsection 340(4) of Companies Act 2016.

Syed Zaid via a video conference last week said the Malaysian capital market has been impacted by the Covid-19 pandemic, but remains orderly given ample liquidity and robust infrastructure.

“The equity market is mirroring global trends but to a lesser degree. Foreign sell-offs are cushioned by increased participation of local institutions and retail investors.

“We have seen some volatility in our domestic bond market, but it continues to perform relatively better than our emerging peers, supported by deep domestic liquidity funds of our management industry,” he said.

The regulator also announced regulatory relief for public-listed companies facing a Practice Note 17 classification due to the pandemic and lifted the fundraising limits placed on equity crowdfunding (ECF) platforms.

The SC has allowed ECF and peer-to-peer financing platforms to operationalise secondary trading and encouraged for the offering of more financial products to the growing domestic online trading community.

Some RM2 billion was raised through 30 IPOs in 2019, comprising four on the Main Market, 11 on the ACE Market, and the remaining on the Leading Entrepreneur Accelerator Platform (LEAP) Market.

LEAP Market issuances grew 60.6% year-on-year (YoY) to RM92.2 million in 2019, the SC noted.

Overall market capitalisation on Bursa Malaysia ended 0.7% higher YoY at RM1.71 trillion in 2019 compared to RM1.7 trillion in 2018.