COVID-19: Alternative arrangements for meetings for SGX listed companies

By Marcus Chow, Jolie Giouw

04-2020

In our earlier article on COVID-19: Pointers and Updates for SGX listed companies, we had outlined the guidance issued by SGX RegCo, ACRA and MAS on the holding of general meetings for listed companies. We had also noted that legislation was being proposed to allow for alternative arrangements for meetings to be conducted in view of the Infectious Diseases (Measures To Prevent Spread Of COVID-19) Regulations 2020 (“Safe Distancing Regulations”).

On 7 April 2020, the COVID-19 (Temporary Measures) Act 2020 was passed, providing for alternative arrangements for the conduct of meetings provided for in written law. Please also refer to our recent article on COVID-19 (Temporary Measures) Act 2020: Legal circuit breaker, for details on the COVID-19 (Temporary Measures) Act 2020. Following this on 13 April 2020, the COVID-19 (Temporary Measures) (Alternative Arrangements for Meetings for Companies, Variable Capital Companies, Business Trusts, Unit Trusts and Debenture Holders) Order 2020 (“Order”) was published and was deemed to have come into operation on 27 March 2020. The Order sets out alternative arrangements to personal attendance in respect to general meetings of, amongst others, listed companies. On the same date, SGX RegCo, ACRA and MAS issued additional guidance found here, on the conduct of general meetings during the elevated safe distancing period ("Additional Guidance"), where a checklist was also provided to assist companies in complying with the requirements set out in the Order. Entities which are unable to comply with the Order are advised under the Additional Guidance to defer their meetings. To this effect, SGX RegCo had earlier announced that issuers are granted an automatic 60-day extension to hold their annual general meetings. All meetings held through electronic means must be at no cost to members.

Pursuant to the Order, companies may provide that a member may only attend a meeting by electronic means if, amongst others, it is held during the period during which the Safe Distancing Regulations or "circuit breaker" measures are in force. “Electronic means” must at least allow shareholders and members to contemporaneously observe the proceedings of the meeting by both audio and video means, that is, each member must be provided with both an audio broadcast and audio-visual broadcast (e.g. “live” webcast). The attendance by the board of directors of the company and its statutory auditors may also be satisfied by electronic means. However, the Additional Guidance clarifies that issuers who require certain essential persons (such as the chairman of the meeting (“Chairman”), the CEO, the company secretary, the technical administrators facilitating the webcast, the share registrar or the scrutineer) to be in the same physical location to facilitate the conduct of a virtual meeting must notify the Ministry for Trade and Industry no later than one day before the meeting, to be granted an automatic time-limited exemption to permit temporary operations at a physical location, provided that the number of persons does not exceed 6 and safe distancing measures are observed.

A quorum shall be formed if 2 members of the company are personally or electronically present. For a member to be "electronically present", the member should attend the meeting electronically, be verified by the share registrar as attending the meeting electronically, and be acknowledged by electronic means by the Chairman as present at the meeting.

To ensure that members continue to be given the capacity to speak and vote at the meeting, a company may require a member to send to the Chairman, before the meeting, by post or electronic mail, the matters which he/she wishes to raise at the meeting. Each matter, if substantial and relevant and sent within a reasonable time before the meeting, is to be responded to at or before the meeting by electronic means. The SGX RegCo, in the Additional Guidance, encourages issuers to respond to questions promptly as far as possible, to facilitate shareholders’ votes. Questions may be addressed prior to the general meeting through publication on SGXNET and, if available, the issuer’s corporate website and/or any virtual information session that the issuer may organise. Unless its constitutive documents allow for remote electronic voting, a company should also require a member to appoint the Chairman as the member’s proxy to vote at the meeting by depositing with the company an instrument of appointment by post or by electronic mail. A member may not vote at the meeting otherwise than by way of appointing the Chairman as the member’s proxy. The Additional Guidance reiterates that only the Chairman may be appointed as proxy and members should specifically indicate how they wish to vote on the resolutions. Members must be able to submit proxy forms electronically as an alternative to physical delivery. CPF and SRS investors, and any other persons who would have been able to be appointed as proxies by relevant intermediaries must be given the same extent of rights as members, including the right to participate in the "live" webcast and submit questions prior to the meeting.

In terms of the provision of notice, such notices may be sent by electronic means by publishing it on SGXNET and on the company's website (if available), and must also contain certain information. In particular, the notice must, in addition to containing the date and time of the meeting and the resolutions to be proposed:

(a) Describe the means by which the meeting can be electronically accessed (including the online location, if the meeting is held at an online location), as well as any other ancillary information (such as whether members have to pre-register on an online platform);

(b) Describe how proxy forms can be submitted electronically and through hard copy, and the timeline by which such proxy forms should be submitted;

(c) Describe how members may access any documents/information relating to the business of the general meeting;

(d) Set out instructions to members as to how to submit questions ahead of the meeting, being substantial and relevant matters that such member wishes to raise, including the timeframe for the submission of questions and how the questions will be responded to; and

(e) Set out instructions to members as to how to cast their votes, including how the Chairman may be appointed by a member entitled to vote at the meeting as his/her proxy, and that members should specifically direct their votes in the proxy form. Such instructions must include specific instructions to CPF and SRS investors that they should approach their respective agent banks to submit their votes at least 7 working days before the general meeting.

Issuers may also additionally elect to provide hard copies to shareholders.

While the Order provides for notices convening meetings to be sent to shareholders and members at least 14 calendar days (or 21 calendar days where special resolutions are proposed) before the meeting (in each case excluding the date of the meeting and the date of the notice), the Additional Guidance strongly encourages issuers to provide at least 21 calendar days' notice to shareholders.

For documents that are required to be laid/ produced at any meeting, such requirement is satisfied by the company sending such documents together with the notice of the meeting or publishing these at an online location, the address of which is sent with the notice of the meeting or published on the company's website. In particular, the Additional Guidance provides that such documents must be published on SGXNET and if available, the issuer's website.

Upon the conclusion of the meeting, the company must publish the minutes of the meeting on SGXNET and the company's website within 1 month after the date of the meeting. The minutes should record substantial and relevant comments or queries from shareholders relating to the agenda of the general meeting, and responses from the board of directors and management.

(Special thanks to trainee Lim Neng Fang for her contribution to the article)

This article is produced by our Singapore office, Bird & Bird ATMD LLP, and does not constitute legal advice. It is intended to provide general information only. Please note that the information in this article is accurate as at 14 April 2020. We will continue to monitor the situation and provide updates on any changes as soon as these are communicated to us. Please contact our lawyers if you have any specific queries.