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 …
When should PLC make announcement?
When entering into a transaction, a company listed on Bursa Malaysia Securities Berhad (“Bursa Malaysia”) may need to make announcement to Bursa Malaysia as provided under the Listing Requirements. In deciding whether any announcement is required, a company listed on Bursa Malaysia (“PLC”) needs to make the following assessment. Quantitative …
Seller’s representations and warranties in M&A: Three things to avoid
In an agreement for sale and purchase of business or shares of a company, a seller typically represents and warrants that the business or the company is of certain calibre. A breach of the seller’s representations and warranties amounts to a breach of contract which may entitle the purchaser to …
M&A buyer’s perspective: Should director and shareholder of seller be a party to the SPA?
In a sale and purchase of shares or business, where the seller is a corporation, it is worth considering whether to include the person who has control over the corporate seller (“Person”) as a party to the sale and purchase agreement (“SPA”). The Person would typically be a director and/or …
M&A: What representations and warranties to get from seller?
In an agreement for sale and purchase of business or shares of a company (“SPA”), it is typical for the seller to represent and warrant to the purchaser that the target business or target company is of certain calibre. Typically, there would be fundamental representations and warranties in the SPA …
Related party transaction within an M&A deal
When a buyer enters into an agreement with a seller to acquire shares of a company from the seller (“Transaction”), the buyer and the seller may negotiate for some other deals involving the target company to be included in the sale and purchase agreement in respect of the Transaction. For …
Financial assistance: Can business owners acquire shares with the companies’ money?
The provisions under the Companies Act 2016 which have the effect of restricting business owners from using funds of companies to acquire shares of those companies catch some business owners off guard. Some business owners, who are directors and shareholders of private limited companies which they set up to carry …