BACKGROUND
On 28 February 2023, The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) published an updated Guide on General Meetings (the "Guide"). The Guide was first issued on 24 September 2010, and it has been updated from time to time. The Guide assists issuers in convening and conducting general meetings, including annual general meeting ("AGM"), extraordinary general meeting ("EGM") or special general meeting ("SGM") and consolidates the relevant provisions of the Corporate Governance Code and the Rules Governing the Listing of Securities on the Stock Exchange (the “Listing Rules”).
The key updates are summarised as follows:
KEY UPDATES
Update 1: Notice of General Meeting
Issuers should be aware of the following updates regarding the timeline for giving notice of the meeting, content of the notice, and service of meeting notice.
Reasonable written notice of general meetings should be given to shareholders. The timeline for giving notice was updated from at least 20 clear business days to at least 21 days for an AGM, and from at least 10 clear business days to at least 14 days for other general meetings.
Issuers are now required to specify the format of the meeting in the notice, i.e. whether it is a physical, virtual or hybrid meeting.
To the extent permitted under the law of the issuer's place of incorporation and its constitutional document, the notice shall be given to all shareholders in printed form or electronic form.
Update 2: Virtual/Hybrid General Meeting
Under the effects of COVID-19 pandemic, there has been a rise in the use of virtual meeting software in the context of shareholders’ meetings of companies. There is now an express clarification under the Companies (Amendment) Ordinance 2023 which will become effective on 28 April 2023 that shareholders’ meetings may take place either as a physical meeting, as a virtual meeting, or as a hybrid between the two. For further details on various updates to the Companies Ordinance regarding the holding of virtual shareholder meetings, please refer to the HK Company Law Update published by us previously and the “Guidance Note – Good Practice on Holding Virtual or Hybrid General Meetings” issued by the Companies Registry.
Similarly, the Guide has been updated to encourage issuers to consider holding general meetings virtually or in hybrid form using virtual meeting technology to promote better engagement with and to maximize participation by shareholders.
Issuers should be aware of the below when holding virtual or hybrid meetings:
- The notice of general meeting should provide the arrangements for a virtual or hybrid meeting, including instructions on pre-registration and verification procedures, and how to access the virtual meeting technology.
- If registration and authentication are required, issuers should provide shareholders with the relevant information before the meetings and consider using secure methods of authentication, such as providing each shareholder with a unique meeting login ID and password or sending a one-time unique personal identification number to a shareholder's phone number or email address.
- Necessary arrangements should be made so that shareholders attending virtually could listen, speak, and submit real-time questions during the meeting. It is preferable for virtual or hybrid meetings to be accessible in both video and audio formats.
- Issuers should consider and mitigate potential technical issues and make necessary contingency plan. Technical support should be provided to shareholders during or before the meeting.
- Arrangements should be made to enable shareholders can cast their votes by electronic means in real-time. Issuers should implement safeguards to validate votes submitted electronically. Voting recording should be provided for audit and verification of accuracy.
Update 3 - Resolutions About Directors
Issuers should be aware of the number of listed company directorships of a proposed independent non-executive director holds. If the candidate will be holding his 7th (or more) listed company directorship, issuers should disclose why the board believes the individual would still be able to devote sufficient time to the board.
Update 4 - Supplemental Information
Certain parties may be restricted from voting in favor of a resolution for specific
transactions. However, they may vote against the resolution if their intention to do so has been stated in the circular or listing document. After publication of the circular or listing document, if an issuer becomes aware of a change in the shareholders' voting intention, it must take immediate actions to publish a supplementary circular or an announcement not less than 10 business days before the date of the general meeting.
Update 5 - Shareholders' Requisition of Meetings
Shareholders holding minority stake must be able to convene a general meeting and add resolutions to a meeting agenda. Issuers should set out in their constitutional documents the minimum stake for convening a general meeting after taking into account the Listing Rules and the laws of their places of incorporation.
Update 6 - Corporate Representatives
There is an express clarification in the Guide that every corporate shareholder shall be entitled to appoint representatives to attend and vote at the general meeting.
Update 7 - Minutes of Meeting
It is no longer only a good practice for issuers to record key points and queries raised by shareholders (or their proxies) as well as responses from the board and management. The recording of the above is expressly recommended by the Guide. Such records should also be made available to shareholders.
Update 8 - No Counting of Votes Cast in Contravention of Listing Rules
Where any shareholders are, under the Listing Rules, required to abstain from voting on any particular resolution or restricted to vote only for or only against any particular resolution, any votes cast in contravention of such restrictions shall not be counted.
Update 9 - Cumulative Voting Arrangements
Cumulative voting mechanism may be adopted for election of directors and (for PRC issuers) supervisors at general meetings (given it is permitted by the laws of their places of incorporation and their constitutional documents). Issuers should clearly disclose the adoption of cumulative voting mechanism in the notice of general meeting, proxy form and poll results announcement.
Update 10 - Poll Results Announcement
There is an update on the requirement for the poll results announcement to include the number of shares actually voted but excluded from calculating the poll results, and directors' attendance at the general meeting.
Issuers should familiarise themselves with the above updates when convening and conducting AGMs, EGMs or SGMs. For further details, please refer to the Guide published by the Stock Exchange on http://www.hkex.com.hk.
关于本行
何韦律师行是一所香港独立律师行，其律师经验丰富，具创造性及前瞻性思维。
我们的主要业务领域包括：企业／商业事务及企业融资；商事及海事争议解决；医疗疏忽及医护；保险、人身伤害及专业弥偿保险；雇佣；家庭及婚姻；物业及建筑物管理；银行业务；欺诈行为；不良债务；金融服务／企业监管及合规事宜。
作为一家独立的律师行，我们能将法律和商业上利益冲突的情况减至最低，为各行各业的客户处理各种法律事务。 本行合伙人在香港发展事业多年，对国际业务及亚洲地区业务有深刻的了解。
免责声明： 本电邮所载资料及任何附件仅提供作就参考用途，并不旨在提供法律意见。 如阁下有任何疑问，请电邮至[email protected]。