COVID-19 Update | 2020 AGMs by Public Companies | Official Letter No. 1916/UBCK-GSDC
“Official Letter 1916” providing guidance on the timing and format of AGMs of public companies in view of the need to prevent the spread of the coronavirus
Dear Clients and Friends,
As the annual general meeting of shareholders (“AGM”) season is approaching and in given the unprecedented Covid-19 pandemic, the State Securities Committee (“SSC”) issued Official Letter No. 1916/UBCK-GSDC to public companies to provide guidance on the timing and format of their AGMs.
Key takeaways from OL 1916 are summarized as below:
A number of local authorities and agencies have issued their guidelines on the implementation of Directive 16 to avoid disruption.
TIMING FOR HOLDING 2020 AGMs
- 2020 AGMs should be held within 4 months from the end of the financial year, which deadline may be extended for another 2 months (*); and
- In holding 2020 AGMs, companies should take measures to prevent and fight against the pandemic as directed by the Prime Minister and other competent authorities (**).
(*) Prior to the issuance of Prime Minister’s Directive No. 16/CT-TTg on the Implementation of Immediate Measures for the Prevention of Covid-19 Pandemic (which imposed a 15-day social distancing period, starting from April 1, 2020), a number of public companies had set their AGM to be held during the 15-day social distancing period. For those companies which have not set their AGM dates, they are recommended not to set their in-person AGM dates during the 15-day social distancing period. The holding of any gathering activities and events of more than 20 people in a room is also restricted in accordance with the Prime Minister’s Directive No. 15/CT-TTg on the Implementation of Immediate Measures for the Prevention of Covid-19 Pandemic. For those companies which have set their AGM dates, they should not hold an in-person AGM during the 15-day social distancing period. After such 15-day social distancing period, companies consider holding a virtual AGM to avoid the situation that the social distancing period may last more than 15 days depending on the Prime Minister’s direction.
(**) For instance, FPT Corporation has changed its AGM venue in order to implement necessary measures to prevent the pandemic (see https://fpt.com.vn//Images/files/cong-bo/2020/Thang-3/CV-85-_thay-doi-dia-diem-va-tai-lieu-hop.pdf).
- A company may consider holding a virtual AGM in lieu of a physical AGM if it is practicable for it to do so;
- A company should check the relevant conditions to hold a virtual AGM under the Law on Enterprises 2014, its charter and internal regulations); and
- If necessary, a company should amend its charter and internal regulations or issue necessary internal regulations to enable it to hold a virtual AGM.
Based on OL 1916, we recommend the following actions to prepare for a virtual AGM:
- Check if the company’s internal regulations contain any guidelines for shareholders to vote in a virtual AGM. If NOT, consider formulating necessary guidelines;
- Check if the company’s charter and internal regulations contain any restrictions on holding a virtual AGM or any requirement which requires an AGM to be held at a specific physical place. If YES, the charter and corporate governance regulations should be revised to remove such restrictions;
- Consider the use of proxy forms in order to minimize the number of individuals who will use individual teleconference facilities which may not be technically practicable;
- Provide shareholders with clear instructions on how to access, speak and vote in a virtual AGM; and
- Work with specialists who provide online meeting services (e.g., VSD and FPT Securities) to seek their advisory opinions on how to successfully host a virtual AGM.
If it is necessary to postpone an AGM, we recommend the following actions:
- The Board of Directors (BOD) should adopt a resolution approving for the postponement of the AGM. A public disclosure of this BOD resolution should be made to SSC, the Vietnam Securities Depositary (VSD) and the relevant stock exchange and in the company’s website within 24 hours;
- The BOD should send a written request for the postponement of the AGM together with the BOD resolution to the local Department of Planning and Investment (DPI) where such company is established; and
- After the DPI’s opinion on the postponement of the AGM is obtained, a public disclosure of such DPI’s opinion should be made to SSC, the Vietnam Securities Depositary (VSD) and the relevant stock exchange and in the company’s website within 24 hours.
We want you to know that the safety and wellbeing of our clients and our teams are very important to us. If you have any questions or concerns, we encourage you to reach out to your contact partner or you can email us at [email protected]
YKVN Covid19 Taskforce