Which corporate actions undertaken by public companies listed on the Main Market or ACE Market of Bursa Malaysia (“PLC”) require shareholders’ approval?

A PLC is required under the Listing Requirements to obtain shareholders’ approval for, among others, the following:

1. Issuance of securities by the PLC including rights issue, bonus issue, share issuance scheme and dividend reinvestment scheme.

2. Fees of directors, and any benefits payable to directors of the PLC.

3. Material change to the utilisation of proceeds raised by the PLC from its IPO or new issue of securities which has been approved by specific shareholder approval. A change to the utilisation of proceeds is material if such change is 25% or more of the total proceeds raised.

4. Material amendment, modification or variation to a proposal which has been approved by shareholders in general meeting. An amendment, modification or variation is material if it can be reasonably expected to have a material effect on the decision of a holder of securities of the PLC in relation to such proposal.

5. Provision of financial assistance by the PLC or its subsidiaries not listed on any stock exchange to associated company or joint arrangement of the PLC, and the aggregate amount provided or to be provided at any time to each associated company or joint arrangement compared to the net tangible assets of the group is 5% or more.

6. Issuance by the PLC’s principal subsidiary, of shares or convertible securities or options that results or could potentially result in a material dilution of the PLC’s equity interest in the principal subsidiary. “Material dilution” means percentage reduction amounting to 25% or more.

7. Listing of securities of any of the PLC’s subsidiaries.

8. Acquisition or disposal of assets by the PLC or its subsidiaries where any one of the percentage ratios of the transaction is 25% or more.

9. Transaction or business arrangement which might reasonably be expected to result in either (a) the diversion of 25% or more of the net assets of the PLC to an operation which differs widely from those operations previously carried on by the PLC; or (b) the contribution from such an operation of 25% or more of the net profits of the PLC.

10. Purchase of the PLC’s own securities.

11. Related party transaction where (1) any of the percentage ratios of a RPT is 5% or more; and (2) the value of the consideration of the RPT is RM500,000 or more for PLC listed on the Main Market or RM200,00 or more for PLC listed on the ACE Market.

12. Consolidation or subdivision of shares of the PLC.

13. Delisting of the PLC.

The above is subject to the detailed requirements and exceptions in the Listing Requirements.

#malaysiancorporatelawyer
#listingrequirements
#equitycapitalmarkets

This post was originally posted on Linkedin on 7 February 2022. Follow me on Linkedin.