Key milestones for mergers and acquisitions (“M&A”)
1. Due diligence A seller may allow a buyer and its advisers to conduct due diligence on the target company or target asset up to a cut-off date. This is the process of finding out whether there is any major issue which may affect the M&A transaction or the buyer’s …
Proposed changes to the ACE Market IPO process
Bursa Malaysia Securities Berhad (“Exchange”) has issued Consultation Paper No. 2/2021 on 3 August 2021 to seek public feedback on the proposed changes to the ACE Market IPO process. The diagram above, as extracted from the Consultation Paper, shows the current ACE Market IPO process and the proposed changes to …
Related party transaction: What is “interest”?
For those who have the experience of trying to decode the definition of “related party transaction” in the Listing Requirements, the term may seem like pieces of jigsaw puzzle to be put together. Under the Main Market Listing Requirements (“MMLR”) and ACE Market Listing Requirements (“AMLR”), “related party transaction” means a transaction …
Buyer beware: How to address issues on assets or company
Let the buyer beware Under the law, there is a principle known as “let the buyer beware” or “caveat emptor” which generally means that buyer purchases at the buyer’s own risk. The principle places the onus on the buyer to conduct due diligence before making a purchase. A prudent buyer typically carries out due diligence …
What to do with guarantee in sale and purchase of shares?
In a share sale and purchase agreement, if there is any guarantee given for a loan granted to the target company or the target company has given any guarantee for a loan granted to other company in the seller’s group, the buyer and seller should address what to be done …
Is there a need to have shareholders’ agreement and constitution?
Do shareholders need a shareholders’ agreement? A shareholders’ agreement governs the relationship between shareholders of a company. Where there is more than one shareholder, it is prudent to have a shareholders’ agreement to set out their respective rights and obligations although a shareholders’ agreement is not mandatory under the law. Whether …
Voting rights of preference shares
Preference shares defined as non-voting Under the Companies Act 2016 (“CA 2016”), a preference share is a share by whatever name called, which does not entitle the holder the right to vote on a resolution or to any right to participate beyond a specified amount in any distribution whether by …
Directors’ fees – Subsidiary of newly listed public company to take note
The Case The Companies Commission of Malaysia has charged NWP Holdings Berhad (“NWP”), a company listed on Bursa Malaysia, for alleged breaches of section 230(1)(b) of the Companies Act 2016 (“CA 2016”). The charges relate to NWP’s alleged failure to obtain shareholders’ approval at annual general meeting for the directors’ …
Stamp duty exemption for merger or acquisition by SMEs
The Stamp Duty (Exemption) (No. 3) Order 2021 (“Exemption Order”) exempts instruments in relation to an approved merger or acquisition executed by small and medium enterprises from stamp duty. The Exemption Order was gazetted on 25 February 2021 and is deemed to have come into operation on 1 July 2020. …
IPO: Bumiputera equity requirements
Corporations seeking listing on the Main Market and ACE Market of Bursa Malaysia Securities Berhad are required to allocate certain percentage of shares in their initial public offerings to Bumiputeras. Application of the Bumiputera equity requirements The Bumiputera equity requirements apply only to corporations with Malaysian-based operations seeking listing, namely …