Factors to consider for appointment of independent director
The following are some factors to consider when selecting candidates to be independent directors of a public listed company in Malaysia • Whether the proposed independent director complies with the requirements within the “independent director” definition in Chapter 1 of the Listing Requirements, read together with PN 13 of the …
Sometimes I forget
Sometimes I forget that the other person working on a file with me is a beginner. I made the same wrong assumption I have observed in other senior lawyers. I assumed the person delegated with a task knew how to do it without checking with that person. I asked a …
Is adoption of the Malaysian Code on Corporate Governance compulsory?
In the FAQ on the MCCG, the Securities Commission Malaysia states that the MCCG is a set of corporate governance best practices for companies to adopt. The Bursa Listing Requirements require PLCs to ensure that their board of directors provide an overview of the application of the principles set out …
Frequently negotiated clauses in SPA
In an asset or share sale and purchase agreement, what clauses are typically negotiated at length? From my experience, the following areas are usually heavily negotiated: – Limitation of the parties’ (usually the sellers’) liabilities – Exclusion of the parties’ liabilities – What gives rise to the right to terminate …
CEO, CFO, COO are also “directors”
The definition of a “director” is not limited to a person who is formally appointed as a director. Whether a person is a director depends more on the person’s functions than title. The definition of a “director” under section 2 of the Companies Act 2016 is not exhaustive. It includes …
Investment gurus, beware
There seems to be a proliferation of activities involving provision of investment advice which has prompted the SC to issue the Guidance Note on Provision of Investment Advice last year. A person must be licensed by the SC for providing investment advice under the CMSA if he: • is carrying …
Who is fit to be a director?
The Companies Commission of Malaysia has brought charges against directors of companies in separate cases for acting as directors while being undischarged bankrupts.* The legislature does not prescribe the qualities and experience a person must possess before he is fit for appointment. However, the legislature does prescribe the categories of …
Consider this before IPO
Prior to a company undertaking an IPO, its stakeholders should understand the implication of being a public listed company (“PLC”) and consider whether being listed is right for the company. Consider the following: • Business owners would no longer have total control of a company once it is listed. Certain …
Duty of nominee director to act in the best interest of company prevails
A director may be appointed to represent the interests of a person or a particular group such as employees, creditors or debenture holders. When a shareholder invests in a company, the shareholder and the company may agree that the shareholder has the right to appoint a director to represent the …
Provision of guarantee to associated company etc after disposal
When a PLC disposes of part of its shares in a subsidiary (target company) which results in the target company becoming an associated company or joint arrangement of the PLC, the provision on financial assistance under the Listing Requirements should be taken into consideration. If the PLC or its other …