Legal due diligence: Spotting errors with common sense
In legal due diligence exercise, it is easy to get lost in all the details, especially when there are urgent deadlines and voluminous documents to be reviewed. Some errors in legal due diligence reports are obvious when you take a step back and apply common sense. It doesn’t make sense …
Legal due diligence: Is it high, medium or low risk?
The most difficult part of legal due diligence when I started out as a corporate lawyer was not the voluminous review of documents and preparation of reports. The most difficult part was to rate the risks relating to the issues identified during the legal due diligence exercise. Some clients or …
What does “success” mean to you?
“Don’t forget me when you are successful,” I jokingly told my friend after sharing my experience of being a partner of a law firm upon my friend’s request. “Define ‘success’,” my friend said. I paused for a moment and thought about what success would mean to me. My reply: To …
Spotting inconsistencies in legal due diligence
Part of legal due diligence includes spotting inconsistencies in the information provided for legal due diligence. *** For example, the representative of the target company replied that the company does not have any employee in response to questions in the due diligence questionnaire about employment. However, there is information about …
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 seller’s 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 (“𝗣𝗟𝗖”) 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 …
Directors to declare their interest in contracts
Non-declaration of director’s interest in contracts is a common issue encountered when reviewing directors’ resolutions in the course of legal due diligence for M&A or IPO exercise. 𝗖𝗼𝗺𝗺𝗼𝗻 𝘀𝗰𝗲𝗻𝗮𝗿𝗶𝗼 X is a director and shareholder of Company A as well as Company B. Company A and Company B enter into …
Three things to take note of in shareholders’ agreement
Shareholders’ 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 (“𝗖𝗔”) to take note of when preparing a shareholders’ 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 …