What Every Director Needs to Know about Disclosure of Interest in Shares

Corporate Governance

Directors have a duty under section 219 of the Companies Act 2016 to notify the company in writing of shares they have interest in, whether in the company or in a related corporation (s219, Companies Act 2016).

This is to comply with section 59 of the Companies Act 2016, which relates to the keeping of the register of directors’ shareholdings, as well as Bursa Malaysia Listing Requirements, if the company is listed.

Directors should note that their interest in shares includes the interest of:

– their spouse, who is not a director of the company

– their children (including adopted child or stepchild), who are not directors of the company.

In other words, the interest in shares held by the director’s spouse or child (who is not a director of the company) will be treated as the directors’ interest in the shares (section 59 (11), Companies Act 2016).

Analyse section 59(11) and section 8 of the Companies Act 2016 when considering a director’s interest in shares.

#MalaysianCorporateLawyer

#corporategovernance

#directorsduties

This post was first posted on LinkedIn on 6 January 2025.

Due Diligence
Legal Due Diligence on Public Listed Companies in Malaysia

When conducting legal due diligence on public listed companies (PLCs) in Malaysia, the scope of due diligence is limited by the laws of insider trading. Insider trading occurs when someone uses confidential, non-public information about a company to make a profit or avoid a loss in the stock market. Therefore, …

Linkedin Post
Don’t Rush the Disclosure Letter in M&A Transactions

In M&A transactions, a disclosure letter sets out the exceptions to seller’s representations and warranties in a sale and purchase agreement for an M&A transaction (“SPA”). Instead of negotiating heavily on sellers’ representations and warranties in SPAs, it is common to provide in SPAs that sellers’ representations and warranties are …

Lawyering
Is Corporate Practice Less Stressful Than Litigation?

I was asked whether being in corporate practice is less stressful and less hectic than being in litigation practice. I think this kind of generalisation is not particularly helpful. Different law firms have different cultures and expectations of their lawyers. Clients’ demand would also determine whether a particular project or …