COVID-19 & MCO: Conduct Of General Meetings For Listed Issuers
Pursuant to the enforcement of the Movement Control Order (MCO) in Malaysia on 18 March 2020, the Securities Commission Malaysia (SC) had introduced the “Guidance and FAQs on the Conduct of General Meetings for Listed Issuers” (Guidance Note).
The Guidance Note was first issued last year on 18 April 20201 and was revised recently on 1 June 2021 following the announcement by the Prime Minister’s Department on 28 May 2021 in relation to the implementation of a nationwide “total lockdown” for 14 days commencing from 1 June 2021 (FMCO).
As various movement restrictions and physical distancing requirements are implemented by the government from time to time to curb the spread of COVID-19, the Guidance Note will be updated as and when required to be consistent with the Government’s measures.
The Guidance Note provides guidance to listed issuers2 on the conduct of fully virtual, virtual, hybrid and physical general meetings, which include annual general meetings, extraordinary general meetings and meetings of unit holders, especially during this time of pandemic where physical distancing and other precautionary measures are paramount.
The four (4) different methods for listed issuers to conduct general meetings are summarised here:
Fully Virtual General Meeting
Conducted online where all meeting participants, including the Chairperson of the meeting, board members, senior management and shareholders/ unit holders, participate in the meeting online.
Virtual General Meeting
Conducted online without a physical meeting venue.
All shareholders participate remotely or online.
The only venue involved is the broadcast venue where only the essential individuals are physically present to organise the meeting.
“Essential individuals” may include the Chairperson of the general meeting, board members, Chief Executive Officer, Chief Financial Officer, company secretary, auditor, scrutineer and those providing audio and visual support.
“Broadcast venue” refers to a physical venue in Malaysia where the Chairperson of the general meeting is physically present, and where the essential individuals may also be present to facilitate the conduct of the meeting.
Hybrid General Meeting
Conducted at a physical meeting venue with shareholders physically present.
The meeting is also broadcasted online.
Shareholders are provided with the option to participate remotely.
Physical General Meeting
Conducted at a physical meeting venue only.
No remote participation.
Revised Guidance Note
Pursuant to the latest revision of the Guidance Note, listed issuers are only allowed to conduct fully virtual general meetings during the FMCO because physical gatherings, no matter how small, are strictly prohibited.
Pursuant to Section 327 of the Companies Act 2016 (“CA 2016”), the main venue of the meeting must be in Malaysia and the Chairperson of the meeting must be present at the main venue of the meeting.
As such, if the main venue of the meeting is the online platform used to conduct the fully virtual general meeting, then a listed issuer must be able to prove that the online platform is located in Malaysia to fulfil such requirements under the CA 2016.
Other Matters
It is not compulsory for a listed issuer’s constitution/ trust deed to contain express provisions allowing it to leverage technology to conduct general meetings (e.g. remote shareholders’ participation, live broadcasting). Listed issuers must also ensure that there are no express provisions in the constitution/trust deed which prohibit them to do so. However, if the constitution/ trust deed of a listed issuer specifically requires the general meeting to be organised at a physical venue, such listed issuer should defer its general meeting until circumstances permit the same. In this regard, listed issuers are also advised to update their constitutions/ trust deed to leverage on technology to conduct general meetings and to
When leveraging technology to conduct general meetings, listed issuers should ensure that:
the main venue of the meeting is in Malaysia;
the Chairperson of the meeting is at the main venue;
there is reliable infrastructure to enable the conduct of the general meeting including enabling members to exercise their rights to speak and vote at the meeting; and
adequate guidance is provided to its members on the requirements and methods of participation in the general meeting using the selected platform.
Listed issuers are also advised to provide shareholders with a dedicated contact number and/or email to submit queries or request for technical assistance to participate in the general meeting.
If shareholders insist on being physically present at a meeting venue, then a listed issuer should consider conducting a hybrid or physical general meeting only when the circumstances permit.
When conducting hybrid or physical general meetings (when circumstances permit), apart from complying with the applicable standard operating procedures (SOPs) and precautionary measures, listed issuers should also ensure that shareholders register themselves prior to the meeting for necessary logistics arrangements to be made, including additional meeting venue(s) if so required.
Conclusion
Although movement restrictions and/or physical distancing requirements in Malaysia may be lifted in due course, listed issuers are nevertheless encouraged to leverage on technology when conducting general meetings.
The Guidance Note, which will be amended from time to time to align with the applicable SOPs, will still apply to listed issuers in respect of the conduct of such general meetings.
The full Guidance Note can be accessed here.
June 1, 2021