30 June, 2012
Listed companies will now be granted an exemption from the obligation to make a mandatory offer in the case of directors and persons acting in concert with them incurring such an obligation under the Singapore Code of Take-overs and Mergers (“Take-over Code”) in the event of the listed companies buying back shares via a market acquisition (Section 76E of the Companies Act) or an off-market acquisition on an equalaccess scheme (under Section 76C of the Companies Act). The changes are part of broader amendments to the Take-over Code issued on 23 March 2012.
The new procedure requires each director to submit to the Securities Industry Council (“Council”) a duly signed form, Form 2, prescribed by the Council, within 7 days after the passing of a resolution authorising a buy-back. The form requires directors to provide, inter alia, details of the acquired voting rights and the share buy-back and a confirmation that they have abstained from voting in the resolution. The prescribed form should be submitted in electronic form only to firstname.lastname@example.org.
Previously, companies had to apply for exemptions on a case-by-case basis, resulting in voluminous applications for exemptions, especially during times when companies typically held their annual general meetings.
Under the new procedure, parties who comply with the conditions set out in Appendix 2 of the Take-over Code (the Share Buy-back Guidance Note), including submitting the prescribed form, would automatically be exempted from the requirement to make an offer.
For further information, please contact:
Marcus Chow, Partner, ATMD Bird & Bird
Jinesh Lalwani, ATMD Bird & Bird