Acting Capital Markets Authority CEO Wycliffe Shamiah. FILE PHOTO | NMG
Listed companies seeking to hold virtual annual general meeting
must first convince the Capital Markets Authority (CMA) that the
shareholders are well informed, can transparently ask questions and
vote.
The CMA has said the approval process would take
two weeks before the regulator can issue a no-objection letter. Then the
companies must issue a 21-day statutory notice of the intended general
meeting to shareholders.
“In order to protect the
rights of all shareholders, the CMA has emphasised that all shareholders
should be given ample time to raise their questions and receive
explanations from the directors and/or management,” said CMA acting
chief executive Wycliffe Shamiah.
Social distancing
regulations and limitation of the movement have made it impractical to
hold AGMs, which are needed to endorse crucial company decisions,
especially on dividend pay, change of directorship and audit firms.
The
dividend payments are key to putting money in the pockets of small
shareholders who require cash to meet personal expenses that ultimately
boost demand in an economy hit by coronavirus.
The CMA had frozen shareholder meetings in line with the State
directive that prohibits mass gatherings like meetings, weddings and
funerals to contain the spread of the Coronavirus.
It
initially allowed companies whose rules allowed for virtual meetings
while the rest were exempted from the meetings but allowed to pay
dividends and conduct the AGMs at later dates.
However, ScanGroup
,
which was unable to proceed with the sale of part of its business for
Sh5 billion went to court, which allowed all listed firms to hold
virtual meetings even where internal rules do not allow.
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