Pre-IPO restructuring: Declaration of director’s interest
- By : Wong Mei Ying
- Category : Company Law, Equity capital markets (ECM), IPO, Linkedin Post
Prior to an IPO, it is common for promoters of IPO to restructure the assets, business or corporate structure of the group of companies undertaking the IPO i.e. the listing group.
The promoters are usually the owners of the assets and business as well as the shareholders and directors of the listing group.
The pre-IPO restructuring of a company within the listing group may require directors’ approval, which is typically procured by directors’ circular resolution. If any director is interested in the contract relating to the pre-IPO restructuring, the director must declare his interest in accordance with section 221 of the Companies Act 2016. The declaration may be recorded in the minutes of directors’ meeting or more typically, in the directors’ circular resolution approving the pre-IPO restructuring. Failure to do so is an offence and on conviction, the offender is liable to imprisonment for a term not exceeding 5 years or a fine not exceeding RM3 million or both.
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This post was first posted on Linkedin on 29 January 2021.
