Postponement of AGMs by companies in light of Covid -19

KUALA LUMPUR: The issue of the legal obligation to hold Annual general meetings has been raised in light of concerns of Covid -19 and the Government directive not to hold gatherings.

Section 340 of the Companies Act 201 (CA) provides that a company is statutorily obliged to hold an AGM within six months from its financial year-end.

A Board of Directors’ resolution may be passed, this can be in the form of circular resolution if in accordance with the Company’s articles of association.

The Board can take note of the Government’s directive as to movements and opening of business premises. It can also consider that it is in the best interest of the company to postpone the convening of the AGM given the hazard of exposure to Covid -19 during the shareholders’ meeting

No application is needed for a Company to extend the date of the AGM save and except the re-scheduled AGM is held not beyond fifteen months from date of the financial year-end. If the date is to be extended further an application would have to be made to the Corporate Commission Malaysia (SSM).

A Bursa-listed company would need to consider that any deferment of AGM which is the major organ of the company for management accountability in governance have to take into consideration shareholder’s investor interests.

An appropriate disclosure announcement will be required under the Bursa Listing Rules.

Philip Koh, Advocate & Solicitor, High Court of Malaya