M&A: Financial assistance
When structuring an M&A transaction, consideration should be given to laws relating to financial assistance which may have impact on the financing of the transaction. The laws of Malaysia relating to financial assistance is summarised below: A seller is not prohibited to provide financing to a buyer. The assets of …
Three simple ways to enhance legal due diligence skills
1. Understand the scope of legal due diligence and work backward to establish what needs to be verified or reviewed. Sometimes, clients may decide on the scope of legal due diligence. For corporate exercises which require regulators’ approvals, the scope of legal due diligence must meet the requirements under the …
Indemnities and warranties in M&A transactions
A purchaser typically requires a seller to give indemnities and warranties to safeguard the purchaser’s interest in a share or asset purchase agreement. From the purchaser’s perspective, there are some advantages of having indemnities over warranties, including the following: 1. The seller may be able to avoid liability under warranties …
Shareholders’ prior approval required for allotment of shares
The consequence of not getting shareholders’ prior approval for allotment of shares (if the approval is required under the Companies Act 2016 of Malaysia) could be severe. Therefore, if the scope of due diligence for an M&A transaction includes verifying shares in the target company have been duly allotted, the …
What are the legal requirements to transfer shares of a Malaysian company?
It’s a question that foreign counsels ask in every cross-border M&A transaction involving a Malaysian company. What are the legal requirements to transfer shares of a Malaysian company? The requirements are as follows: 1. Directors of the company to pass directors’ resolution to approve (1) the registration of the transferee …
Do you understand why we are doing it this way?
An investment banker once told me this: “I am happy to share credit with my team members for a job done well. But if anything goes wrong, it will be my responsibility. It will be on me.” The investment banker shared a story on how requests to other team members …
Liabilities of alternate director
Do you know that you are subject to the same directors’ liabilities under the Companies Act 2016 when you agree to act as alternate director? Anyone who consents to act as an alternate director should also understand the implication of doing so. Some points to note on alternate director: • …