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Knowledge Highlights 5 September 2024
The Covid-19 pandemic has caused a number of disruptions to corporate and commercial life as social distancing measures and limits to physical gatherings came into force. Businesses required to hold meetings have been faced with challenges and uncertainty. Legislative provisions to provide certainty to businesses have been announced and these are expected to be introduced in Parliament on or around 7 April 2020.
In relation to listed entities, on 31 March 2020, the Accounting and Corporate Regulatory Authority (“ACRA”), Monetary Authority of Singapore (“MAS”) and Singapore Exchange Regulation (“SGX RegCo”) updated the guidance for issuers on safe distancing measures when conducting general meetings amid the Covid-19 outbreak. ACRA, MAS and SGX RegCo announced in a joint statement that the updated guidance supersedes the earlier guidance issued on 19 March 2020.
On the same day, in relation to entities, whether listed or (on a wider scale) unlisted, the Ministry of Law (“MinLaw”) and Ministry of Finance (“MOF”) issued a media release announcing that new legislation will be introduced in Parliament to provide legal certainty for businesses on the holding of meetings where personal attendance is provided for in written law or in legal instruments.
Updated guidance on general meetings for listed entities
SGX RegCo had earlier announced measures to give time extensions for issuers with 31 December financial year-end to hold their annual general meetings (“AGMs”) by 30 June 2020. Following the Ministry of Health’s advisory on safe distancing measures on 24 March 2020, ACRA, MAS and SGX RegCo issued a joint statement on 25 March 2020 on safe distancing measures for issuers when conducting meetings.
On 27 March 2020, the Infectious Diseases (Measures to Prevent Spread of Covid-19) Regulations 2020 (“Regulations”) came into force. The Regulations prohibit certain activities and events (e.g. conventions), limit attendance for non-prohibited events to 10 individuals, and impose safe distancing measures for non-prohibited events held in public places.
This was followed on 31 March 2020 by the media release issued by MinLaw and MOF as described above.
In view of these developments, the updated guidance provides as follows:
Issuers must allow shareholders an opportunity to ask questions in the following ways:
The updated guidance also provides as follows:
The guidance notes that disclosures are crucial to shareholders’ decision-making. With the Covid-19 situation having had an extraordinarily huge global impact in just a matter of weeks, many issuers are operating under circumstances that are evolving very quickly and significantly. The guidance reminds issuers to carefully consider these and other developments in their responses to shareholders and their disclosures.
Legislative proposals to provide legal certainty on holding of meetings for businesses
MinLaw and MOF note that certain provisions in written law and certain legal instruments (such as a company’s constitution) provide for personal attendance at meetings. With the Regulations in force, the Government has received feedback that businesses are uncertain about how to comply with both those provisions and the Regulations. The Government will therefore introduce new legislation at the next sitting of Parliament (on or about 7 April 2020) (“Proposed Provisions”) to provide legal certainty on the holding of such meetings.
Subject to Parliament’s approval, the Proposed Provisions will:
The following is a non-exhaustive list of meetings where personal attendance is provided for in written law or in a legal instrument:
If needed, alternative arrangements may be prescribed in respect of these meetings. In particular, alternative arrangements are intended to be prescribed for companies, including listed companies, listed business trusts and real estate investment trusts.
The Proposed Provisions, if passed, are intended to be brought into force as soon as possible. Entities that are planning to conduct meetings in the meantime but are uncertain about how to comply with the prevailing safe distancing measures without contravening provisions in written law or legal instruments may approach the respective regulators for guidance on how the meeting should be conducted. Meetings should, at the minimum, adopt the following:
MinLaw and MOF’s announcement also states that entities that are already able to comply with the prevailing safe distancing measures in accordance with the provisions in written law and their existing legal instruments should do so. The prescribed alternative arrangements are intended to help those who face challenges in complying with the prevailing safe distancing measures, and are not intended to be mandatory.
Reference materials
The following materials can be found at the SGX website www.sgx.com and the MOF website www.mof.gov.sg:
Further information
Allen & Gledhill has a Covid-19 Resource Centre on our website www.allenandgledhill.com that contains published knowhow on legal and regulatory aspects of the Covid-19 crisis.
In addition, we have a cross-disciplinary Covid-19 Legal Task Force consisting of Partners across various practice areas to provide rapid assistance. Should you have any queries, please do not hesitate to get in touch with us at covid19taskforce@allenandgledhill.com.