Coronavirus contingency planning for general meetings of shareholders
ISLAMABAD: In light of the threat posed by the evolving COVID-19 situation (CoronaVirus) and to protect the wellbeing of shareholders, the Securities and Exchange Commission of Pakistan (SECP) advised all companies to modify their usual planning for annual general meetings. Meeting of the Board of Director may also be held through tele / video conferencing.
SECP has recommended all companies to consider and evaluate the risks in the present situation. Every company, is required to hold, an annual general meeting (AGM) within sixteen months from the date of its incorporation and thereafter once in every calendar year within a period of 120 days following the close of its financial year. As AGM season for December end companies is approaching, the directors and secretaries should modify their usual planning for their company’s AGM in light of the threat posed by the evolving COVID-19 situation.
Directors should consider if members can consolidate their attendance and voting at AGMs into as few people as possible through proxies, while honoring quorum provisions. In order to avoid large gathering at one place, the companies may consider provision of video link facilities at different locations considering the geographical dispersal of its members. The companies shall consider basic protective measures during the meeting including facility of cleaning hand with sanitizers or soap and water. Moreover, for safety of members seating arrangement shall be made at appropriate distance.
Furthermore, voting through postal ballot may be considered by the chairman of the meeting or by the members present in person or through video-link or by proxy having not less than one-tenth of the total voting power by demanding poll for resolutions. This is safer option in current situation.
The members of a private company or a public unlisted company (having not more than 50 members), may pass a resolution (ordinary or special) by circulation signed by all the members for the time being entitled to receive notice of a meeting, except for the ordinary businesses specified under sub-section (2) of section 134 of the Companies Act, 2017 to be conducted in the annual general meeting.
The directors may hold their board meetings through tele or video link provided that the minutes of such meeting are approved and signed subsequently by all the directors.