DIGITAL MEETINGS

Regulator issues guidelines on virtual AGMs for listed firms

In Summary
  • NSE listed firms must send details of how the meeting will be held
  • It also agreed to approval and payment of dividends and appointment of auditors, which can be ratified once AGMs are convened. 

Nairobi Securities Exchange (NSE) listed companies will have to obtain a no-objection order from the Capital Market Authority (CMA) before setting up  virtual shareholder meetings.

In a circular sent to all listed firms, the regulator also them to send details of how the meeting will be held, and demonstrate how requisite information will be provided to shareholders to enable them to make informed decisions. 

In a press statement, CMA said the guideline is in line with the recent High Court ruling; the challenges posed by the Covid-19 pandemic and the government directive banning public gatherings.

 

In late April, the Court ordered and directed that any company listed on the Nairobi bourse, which finds it impracticable to conduct a general meeting due to the COVID-19 pandemic or other justifiable reason, be allowed to hold virtual general meetings.

This was after WPP Scan Group Plc sought court’s option on Article of Association, which restricted listed firms to hold virtual general meetings.

According to the CMA Acting chief executive, Wyckliffe Shamiah, the regulator will process all complete applications received from issuers within fourteen days and hence listed companies must factor in this time as they plan for their AGMs.

''Upon receipt of a no objection, issuers are at liberty to issue a 21-day statutory notice of the intended general meeting to its shareholders,’’ Shamiah said.

He added that in order to protect the rights of all shareholders,  all  should be given ample time to raise questions and receive explanations from the management.

He lauded the Judiciary for the landmark ruling, which enables the capital markets industry to leverage technology to facilitate general meetings.

CMA has also agreed with stakeholders to waive the need for listed companies and market intermediaries to publish their financials in newspapers and the flexibility to use websites and social media channels instead.

 

It also agreed to approval and payment of dividends and appointment of auditors, which can be ratified once AGMs are convened. 

The Circular applies to any issuers of securities to the public who finds it impracticable to conduct a general meeting in the manner required by its articles of association due to the measures set out by the Government in view of the Covid-19 pandemic. 

In line with the commitment to support national efforts to address the adverse effects of the Coronavirus pandemic, the capital markets industry stakeholders led by CMA donated Sh30 million to the Covid-19 Emergency Response Fund.