Compliance and Legal Due Diligence: An Exercise of Frustration?
Lawyer: Please provide register of members, register of directors, all returns of allotment, all stamped transfer forms… Representative of Target Company: Please refer to company search from the Companies Commission of Malaysia. Lawyer: CCM search is not sufficient. Please provide register of members, register of directors, all returns of allotment, …
Minority Shareholders Have Rights Too
Minority shareholders holding less than 50% of the voting shares in a company have certain rights provided under the Companies Act 2016 including the following rights: Shareholding of at least 5% Shareholder(s) of a private company representing at least 5% of the total voting rights may block reappointment of the …
Hands-on means really hands-on
“Sorry, this is urgent.” A senior manager of a corporate client called. Normally, she would text first to check if it’s convenient to speak, but that day, she called right away. I could sense the anxiety in her voice. She explained that her management had instructed for an announcement on …
M&A Specialist and Generalist
I didn’t fully appreciate how specialised and broad M&A practice is until I found myself thinking about how various legal issues discussed in the articles I read apply to M&A transactions. While reading an article on whether consideration is required for the variation of contracts, I was reminded of a …
Exclusivity when negotiating an M&A deal
If you are a buyer negotiating to acquire business or shares of a company, you would want to ensure that you do not incur costs during the negotiation only for the seller to end the negotiation and sell to another party. A buyer would want to ensure that the seller …
Material Adverse Effect (“MAE”) Clause in M&A Transactions
I came across the following definition of “MAE” from the American Bar Association’s Canadian Private Target M&A Deal Point Study: “MAE” means any result, occurrence, fact, change, event, or effect that has, or could reasonably be expected to have, a materially adverse effect on the business, assets, liabilities, capitalization, condition …
Legal Due Diligence on Public Listed Companies in Malaysia
When conducting legal due diligence on public listed companies (PLCs) in Malaysia, the scope of due diligence is limited by the laws of insider trading. Insider trading occurs when someone uses confidential, non-public information about a company to make a profit or avoid a loss in the stock market. Therefore, …
Don’t Rush the Disclosure Letter in M&A Transactions
In M&A transactions, a disclosure letter sets out the exceptions to seller’s representations and warranties in a sale and purchase agreement for an M&A transaction (“SPA”). Instead of negotiating heavily on sellers’ representations and warranties in SPAs, it is common to provide in SPAs that sellers’ representations and warranties are …
Is Corporate Practice Less Stressful Than Litigation?
I was asked whether being in corporate practice is less stressful and less hectic than being in litigation practice. I think this kind of generalisation is not particularly helpful. Different law firms have different cultures and expectations of their lawyers. Clients’ demand would also determine whether a particular project or …
Can the Purchaser Rely on the Warranty and Indemnity Clauses in the Share Purchase Agreement?
In M&A transactions, warranty and indemnity clauses are toolkits for protecting the purchaser’s interest. But what happens if the seller can’t fulfill these obligations due to financial reason? A well-drafted clause is only as effective as the seller’s ability to pay. If the purchaser is concerned that the seller may …