Related party transaction: What is “interest”?

Article

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 entered into by the listed issuer/corporation or its subsidiaries which involves the interest, direct or indirect, of a related party.  

Most of the terms used within the definition of “related party transactions” can be found within the body of the MMLR and AMLR.  

The term “interest”, however, is in the FAQ for Chapter 10 of the MMLR and AMLR. “Interest” includes directorships, shareholdings (direct or deemed), commissions or such other benefits received or derived from the transaction.  

The information in this article is intended only to provide general information and does not constitute legal opinion or professional advice.  

Company Law
What should your company consider before implementing a share award scheme?

1. Eligibility of employees Is the scheme limited to employees of the holding company or includes its subsidiaries? What are the eligibility requirements of employees who will be considered for the scheme? (e.g. at least 18 years old, confirmed full time employee, minimum length of service and performance metrics). 2. …

Equity capital markets (ECM)
Which salient terms of contracts should be disclosed in prospectuses and circulars?

Disclosure of salient terms of certain contracts is required in prospectuses and circulars to shareholders of public listed companies in Malaysia for specific corporate exercises. When determining which contract provisions should be included as salient terms, consider the following: 1. Identify Governing Laws Identify the relevant laws that govern the …

Equity capital markets (ECM)
IPO: Consider this before converting a private company to a public company

For IPO exercise in Malaysia, the following usually takes place before submission of the IPO application to the authorities: conversion of the holding company (Listco) from a private company to a public company (Conversion); the Listco enters into agreements with promoters to acquire their shares in the proposed subsidiaries to …