Indirect Substantial Shareholder
A person can be a substantial shareholder in a company without directly holding any shares in that company. One of the challenges that often arises when I work on IPOs or other equity capital market exercises is the assessment of whether an individual holds an indirect substantial shareholding in a …
Subscribing or acquiring shares: check the pre-emptive rights first
An investor who wants to subscribe to shares or acquire shares in a private company should first consider whether there are any restrictions to do so in the following documents: 1. Constitution of the company (if the company has adopted a constitution); and 2. Shareholders agreement (if the current shareholders …
IPO is like an open book exam
Me: “IPO is like an open book exam. You can see from the prospectuses the kind of issues typically encountered by companies going for listing.” My learned friend: “Yeah, but it is a 300 to 400+ pages of open book exam.” While not every IPO is the same, the following …
Terms of preference shares
When drafting the terms and conditions of preference shares, you may want to consider the following: 1. Number of preference shares to be issued 2. Issuance price 3. Dividend • Rate of dividend • Whether dividend is cumulative • Time for dividend payment 4. Tenure of preference shares Whether the …
We could go to jail for this
“We could go to jail for this,” I half-jokingly told my team members. As I briefed them on a corporate finance exercise, I wanted to make sure that they understand their responsibilities. It is an offence under the Capital Markets and Services Act 2017 to submit any information that is …
Understand corporate finance/ECM work
When I started working on corporate finance transactions as a junior lawyer, it was overwhelming. It was a constant rush to ensure comments for announcements, circulars and submission documents were sent to principal advisers in time for the announcements and submissions to be made. Lunch time in the early years …
Listing process for Main Market and ACE Market of Bursa
The fastest IPO I have worked on took about a year from start to finish. The longest took much longer than that. Some never saw the daylight for various reasons- market conditions not right for IPO, the companies were not suitable for listing or the promoters decided to raise funds …
Use a checklist!
Being meticulous is an important skill for an equity capital markets (“ECM”) lawyer to have. ECM exercise is typically fast-paced and deadlines driven. It requires co-ordination among the due diligence working group members (“DDWG”) as draft documents may be prepared by a DDWG member and commented by the rest of …
Limited voting rights of preference shares
Preference share, by definition under the Companies Act 2016 (“𝐂𝐀 𝟐𝟎𝟏𝟔”) of Malaysia, does not entitle the holder to the right to vote on a resolution. See sections 2(1) and 71(1) of the CA 2016 . Under section 148(2) of the repealed Companies Act 1965, preference shareholders may vote: *when …
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 …