How does a buyer ensure the shares that the buyer acquires in a company are free from liabilities which the buyer doesn’t intend to assume?
The first step is conduct due diligence to find out red flags about the company. The scope of due diligence depends on the buyer’s risk appetite and the size of the deal. Due diligence may include legal, financial, operational and tax matters. Once the issues arising from the due diligence …
Seller’s verbal representations in M&A transaction
As a buyer, do you rely on verbal representations made by the seller before you engage your lawyer? In a sale and purchase of shares or assets, the seller and buyer may have been negotiating the deal for some time before they engage their respective lawyers to draft the sale …
How to reduce stress on completion of corporate exercise
As a corporate finance lawyer, it is common to have to review several rounds of draft announcement for corporate exercises at short notice. Rushing through lunch or being called in the middle of a meeting to review a draft announcement is also quite common. Public listed companies are required to …
Factors to consider for appointment of independent director
The following are some factors to consider when selecting candidates to be independent directors of a public listed company in Malaysia • Whether the proposed independent director complies with the requirements within the “independent director” definition in Chapter 1 of the Listing Requirements, read together with PN 13 of the …
Sometimes I forget
Sometimes I forget that the other person working on a file with me is a beginner. I made the same wrong assumption I have observed in other senior lawyers. I assumed the person delegated with a task knew how to do it without checking with that person. I asked a …
Is adoption of the Malaysian Code on Corporate Governance compulsory?
In the FAQ on the MCCG, the Securities Commission Malaysia states that the MCCG is a set of corporate governance best practices for companies to adopt. The Bursa Listing Requirements require PLCs to ensure that their board of directors provide an overview of the application of the principles set out …
Frequently negotiated clauses in SPA
In an asset or share sale and purchase agreement, what clauses are typically negotiated at length? From my experience, the following areas are usually heavily negotiated: – Limitation of the parties’ (usually the sellers’) liabilities – Exclusion of the parties’ liabilities – What gives rise to the right to terminate …
CEO, CFO, COO are also “directors”
The definition of a “director” is not limited to a person who is formally appointed as a director. Whether a person is a director depends more on the person’s functions than title. The definition of a “director” under section 2 of the Companies Act 2016 is not exhaustive. It includes …
Investment gurus, beware
There seems to be a proliferation of activities involving provision of investment advice which has prompted the SC to issue the Guidance Note on Provision of Investment Advice last year. A person must be licensed by the SC for providing investment advice under the CMSA if he: • is carrying …
Who is fit to be a director?
The Companies Commission of Malaysia has brought charges against directors of companies in separate cases for acting as directors while being undischarged bankrupts.* The legislature does not prescribe the qualities and experience a person must possess before he is fit for appointment. However, the legislature does prescribe the categories of …