SINGAPORE - Registered societies and companies are now allowed to conduct annual general meetings (AGM) through alternative means, such as video conference, to keep in line with safe distancing measures to fight the coronavirus under a new law passed on Tuesday (April 7).
Speaking during the debate on the Covid-19 (Temporary Measures) Bill in Parliament, Senior Minister of State for Law Edwin Tong said that organisations in different sectors have been unable to complete regular commercial or administrative matters as they were not able to gather stakeholders together due to restrictions on mass gatherings.
The amendment hence allows AGMs to be held without the need for them to be physically present as these meetings can now be held virtually, he said.
The arrangements are designed to be pragmatic given the prevailing conditions, with safety of participants a priority, he said. Safeguards will also be in place to facilitate informed and effective participation, bearing in mind technological constraints and security considerations.
"To illustrate, alternative arrangements for a company AGM may look something like this: the meeting may be completely virtual and there would be no need to physically meet," said Mr Tong.
"A smaller quorum number could also be set. Documents, such as notices of meetings and proxy forms, may be sent by electronic means, instead of hard copy."
He said proxy voting can be used, with one specific office-holder, such as the chairman, designated as the sole proxy, as a safeguard. The meetings must also have live video and audio feeds.
Members must be given the opportunity to submit questions, such as through email, before the meeting, and they must be addressed by the management, he added.
The coronavirus situation has affected firms in the corporate sector, along with others such as charities, societies, co-operative societies, trade unions and MCSTs, or Management Corporation Strata Titles, noted Mr Tong.
"Many companies, including those listed on the Singapore Exchange, have been unable to hold shareholder meetings, including AGMs, to obtain shareholder approval to undertake a proposed course of action by the company," he said.
Meetings must be held for functions such as approving divident payments, which provide crucial cashflow for investors, and for the appointment of company directors, said Mr Tong. However, certain AGMs have been postponed since March 27, when the safe distancing measures were implemented.
"DBS Group Holdings, OCBC, and Great Eastern are three examples of large corporates, where ordinarily more than 1,000 shareholders would attend their meetings, and other companies have had to defer their AGMs, pending the passing of this Bill," said Mr Tong.
"This in turn also meant that they would have had to defer payment of final dividends for the financial year, as these can only be approved at the AGM."
Not being able to hold meetings has brought uncertainty and disruption to various organisations, he said.
Trade unions, for instance, may not have been able to obtain approvals for additional expenditures to assist members affected by the Covid-19 situation. The MCSTs of condominiums may also have been unable to carry out urgent and non-routine work on their estates, where subsidiary proprietors' approvals are needed.
Highlighting that the law will apply retrospectively from March 27 this year, when the safe distancing measures came into force, Mr Tong said: "There may be some variations in the way in which these arrangements might work from one type of meeting to another, from one society to another society. There's not a one size fits all approach."
Earlier in Parliament, Senior Parliamentary Secretary for Home Affairs Amrin Amin said that registered societies in Singapore will be allowed to adopt alternative arrangements in holding their AGMs during the ongoing coronavirus outbreak.
Mr Amrin was responding to a question in Parliament from Nominated MP Walter Theseira, who asked if the Registry of Societies will assist societies to continue governing their affairs in accordance with applicable regulations during the pandemic.
Mr Amrin said the Government has announced legislation allowing entities, including societies, to adopt alternative arrangements, so that meetings can be conducted in a manner compliant with safe distancing measures.
"These prescribed alternative measures can be adopted, notwithstanding the requirements in the entity's constitution.
"They include allowing meeting to be held by video conferencing or other electronic means, or to be postponed, or for the quorum of a meeting to be reduced," he said.
"In view of the Covid-19 situation, the Registry of Societies (ROS) will allow societies to adopt such alternative arrangements. ROS will advise societies on the details soon."
In response, Professor Theseira emphasised that the guidelines for the societies will have to be easy to understand, since most societies are very small and do not have the legal staff to interpret the Bill that is passed.
"So they really do need very clear guidelines on what you can and cannot do, to avoid any misunderstandings," he said.
In a statement on Tuesday, the Accounting and Corporate Regulatory Authority (Acra) said that all listed and non-listed companies which are supposed to hold their AGMs between April 16 and July 31 this year will be given a 60-day extension to do so in light of the Covid-19 situation.
Companies that had previously already been granted extensions will also be given a further 60-day extension from the last date of extension.
There is also a 60-day extension for Annual Returns (AR), which are due to be filed between May 1 and Aug 31 this year.
There is no need for these companies to apply for the extension of time with Acra.
"Acra will also not impose any penalties on listed and non-listed companies whose AGMs are due during the period 1 April to 15 April 2020 if they hold the AGM within 60 days of the due date.
"Their AR filing due dates will also be extended for 60 days. There is no need for these companies to apply for the extension of time," it said.