English

VOICE OF MINORITY SHAREHOLDERS WATCH

The AGM season is gaining momentum and we have attended a few AGMs. Below are some of our observations:

1. Step-up practice of 9 year tenure limit for independent directors

Step-up 4.3 of MCCG states that the board has a policy which limits the tenure of its independent directors to nine years.

Step-up practices are meant to encourage companies to go a step further in strengthening their governance practices and processes. Companies that aspire to achieve excellence in corporate governance in particular, Large Companies, should consider the adoption of Step-ups.

Some companies have erroneously stated that they have adopted the Step-up and then go on to say that beyond the 9 years they would put up the independent director’s re-appointment for shareholders’ approval at the AGM.

The Step-up prohibition is absolute in that the independent director cannot continue as an independent director after 9 years.

30.03.2018

VOICE OF MSWG

There has been a lot of fuss in the news recently over the Fake News Bill.

From the capital-markets perspective, ‘Fake News’ can have real and damaging consequences to unsuspecting members of the public who fall prey to the fraudulent investment advice on various online investment platforms purportedly written by market experts and ‘gurus’ but which are essentially ‘pump and dump’ schemes benefiting the perpetrators.

According to the SC, spreading such false information about listed companies for fraudulent self-benefit is an offence under Section 178 of the Capital Markets and Services Act 2007 (CMSA). Section 178 is aptly titled ‘Fraudulently inducing persons to deal in securities’.

The SC has always taken a stern stance on white-collar crime. This is also reflected by the recent charging of two investment bankers, Tan Giap How and Ng Ee Fang, and another Executive Director of a public listed company, Daniel Yong Chen-I, for offences relating to the insider trading of Hirotako Holdings Bhd shares in 2011 when it was the subject of a takeover by MBM Resources Bhd. Insider trading is an offence under Section 188 of the CMSA which carries an imprisonment term not exceeding ten years and to a fine of not less than one million ringgit.