Related party transaction: What is “interest”?

Equity capital markets (ECM)

For those who have the experience of decoding 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.

#malaysiancorporatelawyer

#corporatefinance

#listingrequirements

This post was first posted on Linkedin on 24 December 2020.

Linkedin Post
Conversation on W&I Insurance in M&A Transactions

As an M&A lawyer with a keen interest in the nuances of the M&A field, I’ve observed that warranty and indemnity insurance (W&I) is not that common in M&A transactions in Malaysia, as far as I know. Therefore, when I saw Martijn de Lange of BMS Group commenting about W&I …

Company Law
Indirect Substantial Shareholder

A person can be a substantial shareholder in a company without directly holding any shares in that company. One of the challenges that often arises when I work on IPOs or other equity capital market exercises is the assessment of whether an individual holds an indirect substantial shareholding in a …

Company Law
Legal Requirements for Directors’ Fees and Benefits in Malaysia

One common issue I encounter in both M&A deals and IPO exercises relates to compliance with the legal requirements for the payment of director’s fees and benefits. Additionally, the legal obligations regarding director’s service contracts should not be overlooked. Here are the key points: Constitution 1. If a company, whether public …