IPO: Issues to look out for

Equity capital markets (ECM)

Today’s post is on issues which may delay an IPO exercise.

Steps should be taken from the outset to identify whether there is any issue in the following areas in an IPO exercise. Rectifying any non-compliance in the following areas may take time and involve application to the authorities to obtain the necessary licences or approvals.

1. Conflict of interest
If a director or substantial shareholder of a company which is undertaking an IPO exercise (“𝐚𝐩𝐩𝐥𝐢𝐜𝐚𝐧𝐭”) has any conflict-of-interest vis-a-vis the applicant, the applicant must resolve, eliminate or mitigate the conflict-of-interest situations. This should be done prior to the submission of the application for the proposed IPO and listing to the relevant authorities (“𝐒𝐮𝐛𝐦𝐢𝐬𝐬𝐢𝐨𝐧”).

2. Certificate of completion and compliance (“𝐂𝐂𝐂”) or certificate of fitness (“𝐂𝐅”)
It is an offence under the laws for any person to occupy or permit to be occupied any building without a CCC or CF. An applicant must ensure that there are valid CCCs or CFs for all the properties occupied by the applicant and its subsidiaries (“𝐆𝐫𝐨𝐮𝐩”), whether the properties are owned or rented by the Group.

3. Major licences for operation of the Group
The Group must have valid licences required under the relevant laws to conduct all its business operation. Licences which have expired should be renewed before the Submission. If any major licence required for the Group’s operation is not in place, this may delay the Submission.

4. Foreign workers’ working pass
The Group must ensure foreign workers hired by the Group are legally permitted to work in Malaysia with valid working pass. The conditions of their working pass, such as the employer and the premise where the foreign workers are permitted to work, must also be complied with.

#malaysiancorporatelawyer
#IPO

This post was first posted on Linkedin on 8 September 2021.

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