CSE issues ‘Guidance Note’ for listed entities on holding AGMs

The Colombo Stock Exchange (CSE) has published a ‘Guidance Note’ for listed entities on possible list of alternatives for hosting their Annual General Meetings (AGMs) in light of the COVID-19 pandemic, responding to concerns that holding physical meetings may add to the risk of spreading the disease. “The CSE has formulated a Guidance Note intended to act as a guideline for Listed Entities setting out the possible approaches that may be adopted by the said Entities in hosting the AGMs amidst the restrictions brought about by the COVID-19,” the 
CSE stated.

The range of alternatives include postponement of AGMs, holding Virtual AGMs or Hybrid AGMs, voting by proxy, permitting to submit questions related to the business of the AGM in advance and alternative arrangements for venues to facilitate the AGMs.

As a precautionary measure when holding AGMs physically, it was pointed out that the Listed Entities could implement temperature and health screening measures, which would enable the Entities to turn away shareholders who fail to satisfy the health screen measures.

Meanwhile, the CSE noted that listed firms could consider the payment of an interim dividend instead of the final dividend already announced by the Entity and requires the approval of the shareholders at the AGM, in case the AGM is postponed.

“In such event, the payment of an interim dividend in lieu of the final dividend may be considered by the Entity, provided adequate notice can be given to the market prior to the ‘XD’ date of the interim dividend,” it added.

However, the CSE emphasised that any postponement of the AGM would be subject to the timelines specified in Section 133 of the Companies Act and advised the entities to consult the Registrar General of Companies, under legal advice, if the Entity is unable to comply with the said article of the Act.

Furthermore, the CSE stressed that listed entities need to obtain appropriate legal advice in determining the most appropriate arrangement regarding the conduct of an AGM in the current context.

“This Guidance Note is purely for information purposes and should be construed only as a guide,” the CSE said.