M&A due diligence: Charge over shares
One of the objectives in M&A due diligence is to ascertain that the seller has good title to the sellerβs shares in the target company. This include verifying whether any charges or encumbrances have been created over those shares. Three ways to do this: 1. Include questions in the legal …
Three things to consider when appointing independent director of PLC
Assessment of a candidate for the role of an independent director of a public listed company (βπ£ππβ) is important and requires extensive due diligence, in particular for a company which is undertaking an IPO exercise. The following are 3 things to consider when assessing a candidate for the role of …
Three things to take note of in shareholders’ agreement
Shareholdersβ agreement is a common agreement in an M&A transaction where there is more than one shareholder in the target company after completion of the transaction. The following are three requirements under the Companies Act 2016 of Malaysia (βππβ) to take note of when preparing a shareholdersβ agreement: 1. Save …
The word “from” in contracts
Early in my career, an investment banker asked me how to calculate the number of days specified in a sale and purchase agreement for an M&A transaction. The agreement required Party A to do something not later 30 days from [specified date]. Does the 30 days include the specified date …
What purchasers’ legal counsel look out for in M&A due diligence on contracts
When conducting legal due diligence on contracts entered by a target company in an M&A transaction, the following are some of the provisions to look out for in the contracts: 1. Whether the counterparties may unilaterally terminate the contracts or terminate the contracts upon certain events triggered by the M&A …
Practical empathy
Practical empathy. ππ©π¦ π΄π¬πͺππ π°π§ πΆπ―π₯π¦π³π΄π΅π’π―π₯πͺπ―π¨ π΅π©π’π΅ π±π¦π°π±ππ¦ π₯π°π―βπ΅ π¬π―π°πΈ πΈπ©π’π΅ πΊπ°πΆ π¬π―π°πΈ, π₯π°π―βπ΅ πΈπ’π―π΅ πΈπ©π’π΅ πΊπ°πΆ πΈπ’π―π΅, π₯π°π―βπ΅ π΄π¦π¦ πΈπ©π’π΅ πΊπ°πΆ π΄π¦π¦. ππ©π¦πΊ π©π’π·π¦ π’ π―π°πͺπ΄π¦ πͺπ― π΅π©π¦πͺπ³ π©π¦π’π₯ π΅π©π’π΅βπ΄ π₯πͺπ§π§π¦π³π¦π―π΅ π΅π©π’π― π΅π©π¦ π―π°πͺπ΄π¦ πͺπ― πΊπ°πΆπ³ π©π¦π’π₯ π’π―π₯ π΅π©π’π΅βπ΄ π°π¬π’πΊ. I heard Seth Godin mentioned something along these lines …
Three simple ways to enhance legal due diligence skills
1. Understand the scope of legal due diligence and work backward to establish what needs to be verified or reviewed. Sometimes, clients may decide on the scope of legal due diligence. For corporate exercises which require regulatorsβ approvals, the scope of legal due diligence must meet the requirements under the …
Indemnities and warranties in M&A transactions
A purchaser typically requires a seller to give indemnities and warranties to safeguard the purchaserβs interest in a share or asset purchase agreement. From the purchaserβs perspective, there are some advantages of having indemnities over warranties, including the following: 1. The seller may be able to avoid liability under warranties …
Shareholders’ prior approval required for allotment of shares
The consequence of not getting shareholdersβ prior approval for allotment of shares (if the approval is required under the Companies Act 2016 of Malaysia) could be severe. Therefore, if the scope of due diligence for an M&A transaction includes verifying shares in the target company have been duly allotted, the …
What are the legal requirements to transfer shares of a Malaysian company?
Itβs a question that foreign counsels ask in every cross-border M&A transaction involving a Malaysian company. What are the legal requirements to transfer shares of a Malaysian company? The requirements are as follows: 1. Directors of the company to pass directorsβ resolution to approve (1) the registration of the transferee …