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Singapore Regulators Announce Measures to Support Business Amid COVID-19

April 15, 2020

The Singapore Ministry of Law has issued an order summarizing alternative arrangements during the coronavirus (COVID-19) global pandemic for convening, holding, conducting, or deferring general meetings pursuant to certain provisions of written law or legal instruments, while the Singapore Exchange Regulation Pte. Ltd. has introduced measures to support listed companies by suspending entry onto the Financial Watch-List and enhancing the share issue limit for companies listed on the Mainboard.

Ministry of Law Order

In view of the mandatory safe-distancing measures recently imposed by the Singapore Ministry of Health, the Singapore Ministry of Law issued an order on 13 April 2020 to assist entities facing the challenge of holding in-person meetings during the pandemic. The order—Alternative Arrangements for Meetings for Companies, Variable Capital Companies, Business Trusts, Unit Trusts, and Debenture Holders—was approved by Parliament based on proposed legislative changes to provide legal certainty on the holding of meetings and is retroactive to 27 March 2020.

The order is applicable for meetings conducted by

  • Companies,
  • Variable capital companies (VCCs) and meetings of classes of VCCs holding shares in respect of a sub-fund,
  • Unitholders of registered business trusts,
  • Unitholders of relevant unit trusts, and
  • Debenture holders.

The order provides that alternative arrangements for convening, holding, conducting, or deferring a general meeting of parties stated above shall apply in respect of meetings to be held under any written law or legal instrument during the following time periods:

  • any meeting convened, held, conducted, or deferred during the control period
  • any meeting convened, held, conducted, or deferred during a period of 30 days after the end of the control period, where notice of the meeting was given during the control period.

Control period refers to the period that either or both the COVID-19 (Temporary Measures) (Control Order) Regulations 2020 and the Infectious Diseases (Measures to Prevent Spread of COVID-19) Regulation 2020 are in force, which will remain in place until 4 May 2020, with the possibility of an extension if the situation does not improve.

Alternative Arrangements for General Meetings

The table below summarizes the alternative arrangements for companies for convening, holding, conducting, or deferring general meetings pursuant to certain provisions of written law or legal instruments. Similar alternative arrangements are applicable for meetings of other parties stated above. See the list of alternative arrangements applicable.

 

No.

Provision of Written Law or Legal Instrument

Alternative Arrangement

1.

Provision for convening, holding, or conducting a general meeting of a company

A meeting of a company may be convened, held, or conducted, whether wholly or partly, by electronic means.

In the case of a listed company, the company must publish the minutes of the meeting on SGXNET and the website of the listed company (if available) within one (1) month after the date of the meeting.

2.

Provision for attendance at a general meeting of a company

A company may provide that a member or person may only attend a meeting by observing and listening to the proceedings of the meetings by electronic means, if access to both an audio broadcast and audio-visual broadcast is provided to the member or person.

3.

Provision of right or entitlement to be heard or to require representations to be read out at a general meeting of a company

A company may provide that a member or person may only be heard at a meeting by electronic means in the matter provided in item 4.

A representation may be read out at a meeting by electronic means.

4.

Provision for right or entitlement to speak on a resolution at a general meeting of a company

A company may require a member or person, before the meeting, to send to the chairman of the meeting, by post or electronic mail, the matters which the member or person wishes to raise at the meeting, and each such matter, if substantial and relevant and sent within a reasonable time before the meeting, is to be responded to at or before the meeting by electronic means.

5.

Provision for quorum at a general meeting of a company

A quorum may be formed by 2 members of the company (or one member if permitted by the legal instrument of the company) personally or electronically present.

A member is electronically present at a meeting if the member —

(a) attends the meeting in the manner provided in item 2;

(b) is verified by the share registrar of the company as attending the meeting in the manner provided in item 2; and

(c) is acknowledged by electronic means by the chairman of the meeting as present at the meeting.

6.

Provision for a member of a company to vote at a general meeting of a company

A company may require a member to appoint the chairman of the meeting as the member’s proxy to vote at the meeting by depositing with the company an instrument of appointment by post, or by electronic mail to an electronic mail address stated in the notice of the meeting.

A member may not vote at the meeting otherwise than by way of appointing the chairman of the meeting as the member’s proxy.

Where a proxy is delivered by a member to the company before 13 April 2020 —

(a) the company may treat the instrument of appointment appointing a person other than the chairman of the meeting as the member’s proxy to vote at the meeting as an instrument of appointment appointing the chairman as the member’s proxy to vote at the meeting, if —

(i) the member indicated how the member wished to vote on each such resolution; and

(ii) the member has been given an opportunity to withdraw the appointment and has not withdrawn the appointment; and

(b) the company may treat the instrument of appointment appointing a person other than the chairman of the meeting as the member’s proxy to vote at an adjourned or postponed meeting as an instrument of appointment appointing the chairman as the member’s proxy to vote at the meeting, if —

(i) the resolutions proposed at the adjourned or postponed meeting are the same as the resolutions to be

proposed at the meeting;

(ii) the member indicated how the member wished to vote on each such resolution; and

(iii) the member has been given an opportunity to withdraw the appointment and has not withdrawn the appointment.

7.

Provision for laying and production of documents at a general meeting of a listed company

A document required to be laid or produced before a general meeting of a listed company may be so laid or produced by being —

(a) sent or published in the manner provided in item 10 with the notice of the meeting; or

(b) published at an online location, the address of which is sent with the notice of the meeting, or published on the website of the listed company.

8.

Provision for laying and production of documents at a general meeting of a company that is not listed

A document required to be laid or produced before a general meeting of a company that is not listed may be so laid or produced by being sent with the notice of the meeting.

9.

Provision for giving of notice of a general meeting of a company

A notice of a meeting may be sent by electronic means and —

(a) must describe the means by which the meeting can be

electronically accessed (including the online location, if the meeting is held at an online location);

(b) must set out how the chairman of the meeting may be appointed by a member entitled to vote at the meeting as the member’s proxy to vote at the meeting;

(c) must state how a member may send to the chairman of the meeting the substantial and relevant matters which the member wishes to raise; and

(d) may be accompanied by any other documents relevant to the meeting.

10.

Provision for giving notice of a general meeting of a listed company

A notice of a general meeting (including an adjourned or postponed meeting) of a listed company may be called by notice in writing of not less than 14 days, published on —

(a) SGXNET; and

(b) the website of the listed company (if available).

However, this does not affect the period of notice required to pass a special resolution.

To avoid doubt, notice of a general meeting of a listed company may be given, sent or served using electronic communications in accordance with section 387A of the Companies Act.

 

Financial Watch-List Change

The Singapore Exchange Regulation Pte. Ltd. (SGX RegCo) operates a Financial Watch-List and places companies on the list to compel them to turn around their financial performance after three years of losses and when market capitalisation falls below S$40 million. In light of current conditions caused by the COVID-19 pandemic, which are both unprecedented and unforeseen, SGX RegCo views that placing listed companies on the Financial Watch-List during this period might cause undue prejudice to companies in navigating the business challenges in this climate.

Accordingly, SGX RegCo will provisionally suspend the half-yearly reviews on the first market days of June 2020 and December 2020 to place listed companies on the Financial Watch-List. The suspension is to enable listed companies to focus on meeting the current business and economic challenges and dealing with any resultant liquidity crunch.

Companies which meet the exit criteria under the listing rules will continue to be able to exit the Financial Watch-List. SGX RegCo shall determine where appropriate, if the suspension requires further extension in due course.

Enhanced Share Issue Limited for Mainboard-Listed Companies

SGX RegCo will provisionally enable Mainboard-listed companies to seek a general mandate for an issue of pro-rata shares and convertible securities of up to 100% of its share capital (excluding treasury shares and subsidiary holdings in each class) versus 50% previously (Enhanced Share Issue Limit).

The Enhanced Share Issue Limit is effective on 8 April 2020 and will be in force until 31 December 2021.

The limit on the aggregate number of shares and convertible securities issued other than on a pro rata basis remains at not more than 20%.

Listed companies intending to raise funds using the Enhanced Share Issue Limit must seek shareholders’ approval by way of an ordinary resolution either through obtaining a general mandate for the Enhanced Share Issue Limit at their annual general meeting (AGM) or via specific shareholder approval by convening an extraordinary general meeting (EGM).

The Enhanced Share Issue Limit is subject to the following conditions:

  • the Board of Directors’ confirmation to SGX RegCo that the Enhanced Share Issue Limit is in the interest of the listed company and its shareholders;
  •  compliance with any applicable legal requirements governing the listed company and the constitution/trust deed of the listed company (or the equivalent in the listed company’s country of incorporation) arising from the Enhanced Share Issue Limit;
  • issue of not more than 100% of the listed company’s total number of issued shares excluding treasury shares and subsidiary holdings in each class at the conclusion of the first annual general meeting of the listed company following the passing of the resolution on the general mandate for the Enhanced Share Issue Limit;
  • The listed company disclosing in the notice of general meeting:
  • why the Board of Directors is of the view that the Enhanced Share Issue Limit is in the interest of the listed company and its shareholders and their basis for forming such views;
  •  that the Enhanced Share Issue Limit may be renewed annually during the listed companies’ AGM and is only valid until 31 December 2021, by which date the shares issued pursuant to the Enhanced Share Issue Limit must be listed; and no further shares shall be issued under this limit; and
  • if the listed company is seeking shareholders’ approval via an EGM and has utilised any part of the existing share issue mandate (Existing Amount Used), the listed company is to disclose as at the latest practicable date, the remaining balance that would be available under the Enhanced Share Issue Limit after deducting the Existing Amount Used. The latest practicable date shall be the date before the EGM for the passing of the Enhanced Share Issue Limit resolution.
  • The listed company notifying SGX RegCo of the following, by way of email to enhancedsharelimit@sgx.com when the general mandate for the Enhanced Share Issue Limit has been approved by shareholders:
  • name of the listed company; and
  • date on which such general mandate is approved by shareholders.
  • The listed company disclosing that it is utilising the Enhanced Share Issue Limit in its announcement of an issue of shares or convertible securities in this regard.

Listed companies shall note that notice of general meeting does not have to be cleared with SGX RegCo and no circular is required.

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Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Singapore
Yap Wai Ming
Claudia Tan