Holding meetings amid Covid-19 outbreak: New Act provides legal certainty; ACRA, SGX RegCo extend AGM and annual return deadlines

8 April 2020

On 7 April 2020, the Covid-19 (Temporary Measures) Act 2020 (“Act”) was enacted by Parliament. Among other things, the Act contains a new legislative provision aimed at providing legal certainty on the holding of meetings by companies, charities, societies and other organisations amid the Covid-19 situation. It is noteworthy that the relevant provisions concerning meetings are deemed to have come into operation retrospectively on 27 March 2020. Accordingly, a relevant meeting or class of meetings held on or after 27 March 2020 that complies with alternative arrangements prescribed under the new law will be deemed to satisfy any requirements for the convening, holding, conduct or deferral of such meetings under the relevant written law or legal instrument. The provision is part of a suite of measures introduced by the Act to provide temporary measures aimed, among other things, at alleviating the unexpected pressures Covid-19 has caused to individuals, firms and businesses.

On the same day, the Accounting and Corporate Regulatory Authority (“ACRA”) announced a 60-day extension of time for all listed and non-listed companies to hold their annual general meetings (“AGMs”) and file their annual returns (“ARs”), to address the difficulties some companies have in holding their AGMs and filing their ARs in light of the Covid-19 situation. Singapore Exchange Regulation (“SGX RegCo”) also announced that it would automatically extend by 60 days the deadline for all issuers with financial year-end (“FY-end”) on or before 31 March 2020 to hold their AGMs.

Covid-19 (Temporary Measures) Act 2020

Requirement for temporary measures for conduct of meetings

The Infectious Diseases (Measures to Prevent Spread of Covid-19) Regulations 2020, which came into force on 27 March 2020, prohibited certain activities and events (e.g. conventions) altogether, and limited non-prohibited events, such as meetings and gatherings, to 10 individuals. Since then, the control measures have been progressively tightened. However, there are provisions in written law (such as the Companies Act) and certain legal instruments (such as a company’s constitution) which provide for personal attendance at meetings or simply entitle a person to attend a meeting. Businesses have faced uncertainty over how to comply with these provisions and the recent control measures.

In his second reading speech on the Covid-19 (Temporary Measures) Bill, the Senior Minister of State for Law Mr Edwin Tong (“SMS Tong”) noted that many companies, including listed companies, have been unable to hold shareholder meetings, including AGMs, to obtain shareholder approval to undertake a proposed course of action by the company. Similar challenges have also been faced by a range of different bodies in different sectors, for example, trade unions being unable to obtain approvals for additional expenditures to provide assistance to members, and societies and charities unable to meet deadlines to elect officers for governance purposes. SMS Tong also cited examples of management corporations (“MCSTs”) being unable to carry out urgent non-routine work on their estates that require subsidiary proprietors’ approvals, as well as en bloc sales that may be unable to be completed by the stipulated timelines unless the requisite meetings are held.

Minister for Law to prescribe alternative provisions for the holding or conduct of meetings or classes of meetings

Part 4 of the Act introduces and allows some flexibility for meetings to be held in compliance with the necessary safe distancing measures while at the same time maintaining propriety in the conduct of these meetings. Under section 27 of the Act, the Minister for Law may by order prescribe such alternative arrangements where:

• personal attendance at a meeting or class of meetings is provided for in any written law or legal instrument; and
• the Minister for Law considers that it would be inexpedient or impracticable for the meeting or class of meetings to be convened, held or conducted in the manner provided for in the written law or legal instrument, in view of a control measure (which is defined to include a control order made under Part 7 of the Act and certain notices, orders, regulations, etc., under the Infectious Diseases Act).

SMS Tong clarified that the relevant written law or legal instrument need not explicitly require physical attendance and may simply entitle a person to attend a meeting, or may already provide for both virtual meetings and personal attendance. In these situations, section 27 of the Act would apply.

The term “legal instrument” is defined to include the constitutions of companies, trust deeds of trusts, various other constituting documents or governing rules and regulations of entities, societies and associations, and any other legal instrument as may be prescribed.

Types of alternative arrangements that may be prescribed

The Act sets out the types of alternative arrangements that may be prescribed. Some of these include:

• provision for a meeting to be convened, held or conducted, whether wholly or partly, by electronic communication, video conferencing, tele-conferencing or other electronic means;
• provision of a period of notice for a meeting;
• provision for the quorum for a meeting to be reduced to a specified number;
• provision for voting by electronic means at a meeting; and
• provision for voting at a meeting to be made by proxy and for the number of proxies to be limited to a specified number.

SMS Tong explained that the alternative arrangements, to be prescribed, will be pragmatic and practicable, given the prevailing conditions. Safety of the participants will be the priority, and there will be safeguards to facilitate informed effective participation. At the same time, the regulators will be mindful of the technological constraints, and security considerations, to ensure that the meeting is held regularly.

Regularisation of meetings held in accordance with prescribed alternative arrangements

Part 4 of the Act applies retrospectively, from 27 March 2020, and is accordingly aligned with the date the Infectious Diseases (Measures to Prevent Spread of Covid-19) Regulations 2020 came into force. The Ministry of Law and the Ministry of Finance had highlighted the above in a joint press release on 31 March 2020, when they announced proposed legislative provisions which now form Part 4 of the Act. On the same day, ACRA, SGX RegCo and Monetary Authority of Singapore (“MAS”) issued their joint guidance for listed companies. The guidance sets out in detail how issuers could hold meetings in compliance with the safe distancing measures. In particular, the 31 March 2020 joint press release by the Ministry of Law and the Ministry of Finance highlighted examples of relevant meetings that can be held in accordance with the prescribed alternative arrangements:

• meetings (e.g. AGMs and extraordinary general meetings) held under the Companies Act and each company’s constitution;
• meetings held under trust deeds, in particular, listed business trusts and listed real estate investment trusts;
• meetings held under the Variable Capital Companies Act and the variable capital company’s constitutions;
• meetings held by MCSTs under the Building Maintenance and Strata Management Act;
• creditors’ meetings;
• meetings in relation to the winding up or liquidation of entities;
• meetings held under the Societies Act and the society’s rules;
• meetings held under the Co-operative Societies Act and the co-operative society’s by-laws;
• meetings held under the Town Councils Act and the Town Council’s standing orders; and
• meetings held under the Trade Unions Act and the trade union’s rules.

Applying section 27 of the Act retrospectively ensures that re-arrangements made to meetings between 27 March 2020, and the date when the alternative arrangements are prescribed, will be upheld. This includes meetings that were deferred in response to safe distancing measures as well as meetings that were re-convened after being originally deferred.

Excluded proceedings

Section 27 of the Act does not apply to proceedings of Parliament or the courts.

Extension of deadline for holding of AGMs and filing ARs

ACRA announced that it would extend the deadline for holding AGMs and filing ARs, in view of the difficulties some companies have in holding their AGMs and filing their ARs in light of the Covid-19 situation.

Listed and non-listed companies with AGMs due between 16 April 2020 and 31 July 2020

ACRA will grant a 60-day extension of time for all listed and non-listed companies whose AGMs are due during the period 16 April 2020 to 31 July 2020. Companies that had previously been granted an extension of time to hold their AGMs within this period will also be given a further 60 days of extension from the last date of extension. The AR filing due dates for the period 1 May 2020 to 31 August 2020 for all listed and non-listed companies will also be extended for 60 days. These companies need not apply for the extension of time with ACRA.

Listed and non-listed companies with AGMs due between 1 and 15 April 2020

ACRA will also not impose any penalties on listed and non-listed companies whose AGMs are due during the period 1 to 15 April 2020 if they hold the AGM within 60 days of the due date. Their AR filing due dates will also be extended for 60 days. There is no need for these companies to apply for the extension of time.

The details of the extension of time for holding AGMs and filing ARs are as follows:

Original due date / extended due date previously granted for AGM	New AGM due date	New AR due date
16 Apr 2020 to 30 Apr 2020	15 Jun 2020 to 29 Jun 2020	15 Jul 2020 to 30 Jul 2020
1 May 2020 to 31 May 2020	30 Jun 2020 to 30 Jul 2020	31 Jul 2020 to 29 Aug 2020
1 Jun 2020 to 30 Jun 2020	31 Jul 2020 to 29 Aug 2020	30 Aug 2020 to 29 Sep 2020
1 Jul 2020 to 31 Jul 2020	30 Aug 2020 to 29 Sep 2020	30 Sep 2020 to 30 Oct 2020

ACRA will continue to monitor the situation closely. For companies with AGM due dates that are beyond July 2020, ACRA will consider at a later date if there is a need for an extension of time.

Extension of time for issuers with FY-end on or before 31 March 2020 to hold AGMs and issue annual reports

SGX RegCo announced that, in consultation with ACRA and MAS, SGX RegCo will automatically extend by 60 days the deadline for all issuers with FY-end on or before 31 March 2020 to hold their AGMs.

Issuers must issue their annual reports to shareholders and the Singapore Exchange Securities Trading Limited at least 14 days before the date of the AGM, except for issuers with 31 December 2019 FY-end, which will still need to issue their annual reports by 15 April 2020.

The details of the new AGM due dates and new annual report due dates are as follows:

Issuers with FY-end	Original AGM due date	New AGM due date	New annual report due date
31 Dec 2019	30 Apr 2020	29 Jun 2020	15 Apr 2020
31 Jan 2020	31 May 2020	30 Jul 2020	15 Jul 2020
29 Feb 2020	30 Jun 2020	29 Aug 2020	14 Aug 2020
31 Mar 2020	31 Jul 2020	29 Sep 2020	14 Sep 2020

This development follows from the latest government advisories and measures amid the Covid-19 situation, which present challenges to the holding of AGMs and the performance of statutory audits for full-year financial results.

Issuers will need to notify SGX RegCo by e-mail to automaticagmwaivers@sgx.com of, and announce via SGXNet, the following:

• their relevant FY-end and the indicative timeline to convene their AGM; and
• the board of directors’ confirmation that the time extension will not contravene any laws and regulations governing the issuer and its constitution (or the equivalent in the issuer’s country of incorporation).

SGX RegCo’s announcement clarifies that issuers need not apply to ACRA (if they are Singapore-incorporated companies) or MAS (if they are listed business trusts or real estate investment trusts), and no response will be required from SGX RegCo.

Effect of earlier SGX RegCo announcements

SGX RegCo had on 7 and 27 February 2020 announced measures to give time extensions for issuers with 31 December FY-end to hold their AGMs by end-June 2020. SGX RegCo’s announcement on 7 April 2020 is in addition to those announcements, except in two matters which supersede the earlier ones:

• the time extension, which is now automatic; and
• the extended deadline for AGMs for 31 December FY-end, which is now 29 June 2020.

Other related matters

SGX RegCo states that it strongly encourages issuers to provide at least 21 days’ notice to shareholders on the general meetings to allow shareholders to consider the matters, to pose questions if necessary and vote via proxy. Any material adjustments subsequently made by auditors resulting in material variance from the previously announced unaudited full-year results must also be immediately disclosed pursuant to Mainboard Rule 704(6)/Catalist Rule 704(5).

With the elevated safe distancing measures and workplace premises closures announced by the Prime Minister and the Ministry of Health on 3 April 2020, SGX RegCo indicated that it is assessing the impact of these “circuit breaker” measures on the holding of AGMs, and intends to guide the market shortly. SGX RegCo urges all issuers to adhere to the latest advisories and make timely disclosures to shareholders on the business impact of these developments. Issuers are also reminded to put in place arrangements to ensure that they will be able to release announcements on SGXNet.

Reference materials

The following reference materials are available on the Singapore Statutes Online website sso.agc.gov.sg and the Ministry of Law website www.mlaw.gov.sg:

• Covid-19 (Temporary Measures) Act 2020
• Second Reading Speech by Senior Minister of State for Law, Mr Edwin Tong, on the Covid-19 (Temporary Measures) Bill 2020

The following materials are available from the ACRA website www.acra.gov.sg and SGX website www.sgx.com:

• Extension of Deadline for Holding Annual General Meetings and Filing Annual Returns
• SGX RegCo grants automatic 60-day extension for issuers to hold AGMs

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.

 

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