Date: April 27, 2023
We refer to the regulatory column by SGX RegCo issued today.
“It is correct to say that the mechanisms relating to Requisitioned Meetings are typically contained in the relevant law governing the issuer’s Constitution or incorporation. The relevant provisions in Singapore are in Sections 176 and 177 of the Companies Act. The SGX-ST Listing Rules do not have prescription over these matters. The relevant authority will be ACRA, which administers the Companies Act. It is, therefore, outside the purview of SGX RegCo. For any issue that is unresolved relating to the requisition by the shareholders under Section 176, the proper forum will be the Court.
Whilst there is obligation on the part of the company requisitioned by shareholders for a meeting under Section 176 of the Companies Act to comply and in the event of failure by the company to do so, there is assurance from ACRA that it will take enforcement action.
The problems are largely concerning requisition by shareholders for a meeting under Section 177 of the Companies Act. This is where shareholders hold the meeting outside the company. Burden is on the shareholders to organise and gather the other shareholders for the meeting. Often the complaint to SIAS is that they are unable to avail themselves of the shareholder list. The companies do not feel obliged to provide the shareholder list. However, it is the position of SIAS that when shareholders requisition for an EGM, company boards must recognise that there is unhappiness amongst shareholders and must, therefore, do everything they can to meet with their shareholders in the boardroom and try their best to resolve the issues that are the cause of their unhappiness. It is not good for the company at all, as recently said by the honourable High Court in a recent case, that it is unacceptable for the company to disrupt the democratic processes of the company.
It is however incumbent on shareholders to ensure that they have obtained legal advice to properly requisition for and/or to conduct EGMs on their own in compliance with the Companies Act and the Constitution of the company.”
David Gerald
President and CEO
SIAS
