One of the lines which a corporate lawyer probably say most often at the start of a verification meeting for a corporate exercise is to remind the clients and the rest of the due diligence working group that all the information in the prospectus or circular for the corporate exercise must be accurate, free from material omission and is not false or misleading.

The due diligence for the corporate exercise should be continued until the corporate exercise is completed.

The penalty under the Capital Markets and Services Act 2007 (“CMSA”) for any false or misleading statement or material omission in prospectus and circular is imprisonment for a term not exceeding 10 years or a fine not exceeding three million ringgit or both.

We say this as it is our professional duty to remind the clients and the rest of the due diligence working group of their responsibilities and the implications for contravention of the CMSA. One of the concerns as a corporate lawyer is when information is not disclosed in the prospectus or circular when it should have been.

What is your concern as a lawyer?

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This post was first published on Linkedin on 26 November 2020.