Verification process in ECM corporate exercise
One of the earliest lessons I have learned as an equity capital markets lawyer is this: Submission documents must not contain any statement or information which is false or misleading or from which there is a material omission. Being provided with information at the eleventh hour just before a prospectus or circular …
Why use a term sheet for M&A transaction?
A party wants to acquire the assets owned by another party. The other party is willing to sell its assets. It should be a straight forward offer and acceptance, right? Unfortunately, not in this case. The potential seller wants to sell the shares of the company which owns the assets …
Searches
Prior to entering into business ventures with another party, it is important for a business owner to carry out due diligence on the counterparty and the target business or company. There are various searches which could be carried out as preliminary steps to check whether there is any red flag. …
Directors’ independence
Directors’ independence has been a key focus of the Securities Commission Malaysia (“𝗦𝗖”) and Bursa Malaysia Securities Berhad (“𝗕𝘂𝗿𝘀𝗮”) lately as can be seen from the following amendments or proposed amendments: 𝗥𝗲𝘃𝗶𝘀𝗶𝗼𝗻 𝘁𝗼 𝗠𝗮𝗹𝗮𝘆𝘀𝗶𝗮𝗻 𝗖𝗼𝗱𝗲 𝗼𝗳 𝗖𝗼𝗿𝗽𝗼𝗿𝗮𝘁𝗲 𝗚𝗼𝘃𝗲𝗿𝗻𝗮𝗻𝗰𝗲 (“𝗠𝗖𝗖𝗚”) The SC issued the revised MCCG on 28 April 2021 which took effect …
Shareholders loan-foreign exchange rules
It is common for shareholders to provide loan, which is also sometimes called shareholder’s advance, to a company for its funding requirements. The terms of such loan are sometimes set out in shareholders’ agreement. Where the loan is provided by non-resident shareholders, the foreign exchange policy issued by Bank Negara …
The Malaysian IPO market has evolved over the years
On 3 August 2009, the Main Board and Second Board of Bursa Malaysia were merged into a single unified board, which is now known as the Main Market, for established companies. On the same date, the Mesdaq Market, which was for technology-based companies, was replaced by an alternative market now …
Things to take note for shareholders’ agreement
1. Save for in the case of a company having only one member, two members personally present at a general meeting or by proxy shall be a quorum unless a higher number is specified in the constitution (Section 328, Companies Act 2016 (“CA”)). In the case of a company with …
Director sourcing of PLCs
Under the Malaysian Code on Corporate Governance (“MCCG”), one of the intended outcomes is for board decisions to be made objectively in the best interests of the company taking into account diverse perspectives and insights. To achieve this outcome, one of the best practices provided under the MCCG is for the board to utilise independent sources …
When is your “Business Day”?
The definition section in commercial agreements usually includes “Business Day” as a defined term. A typical definition for “Business Day” reads as follows: “Business Day” means a day on which commercial banks are generally open for business in [insert state or country] for transaction of normal business (excluding Saturdays, [Sundays] …
Common scenario in IPO
𝗖𝗼𝗺𝗺𝗼𝗻 𝘀𝗰𝗲𝗻𝗮𝗿𝗶𝗼 𝗶𝗻 𝗜𝗣𝗢 X is a director and shareholder of Company A as well as Company B. Company A intends to undertake an IPO and a listing exercise. Company A enters into an agreement (“𝗦𝗣𝗔”) with X and other shareholders of Company B to acquire all the shares of …