New Regulations due to the Impact of the Coronavirus Pandemic (COVID-19) in Relation to Necessary Formalities in Holding –
2020 Annual General Meetings of Shareholders
(as of 22 April 2020 until further notice)
Due to the occurrence of the Covid-19 pandemic situation since the end of December 2019 until present (22 April 2020), during which the Thai government has encouraged the population to practice social distancing; this has led to problems in holding Annual General Meetings of Shareholders (“AGM”), as well as other formalities which affect, among others, the submission of the audited financial statement and tax filing. In this regard, competent authorities; including the Department of Business Development (“DBD”), the Securities Exchange Commission (“SEC”) and the Stock Exchange Thailand (“SET”), have launched several laws, notifications and guidance for tackling the current situation in order to facilitate business entities in handling their various corporate formalities for 2020, as summarised in this newsletter Additionally, for alternative of the meeting at this situation, the Emergency Decree on Meetings held via Electronic Means B.E. 2563 (2020) has been in effect since 19 April 2020 in order to provide a more flexible alternative in the holding of a meeting via electronic means.
- A case where a juristic person is are unable to hold a meeting or are delayed in holding the meeting beyond the statutorily prescribed period
According to the Notification of the DBD on “Supportive measures against the Coronavirus 2019/COVID-19 pandemic, which may cause an impact on the holding of meetings by juristic persons dated 4 March B.E. 2563 (2020) (“DBD Notification dated 4 March 2020”); any juristic person affected by said COVID-19 pandemic can delay their meeting beyond the statutorily prescribed period and, after holding the meeting, the involved company shall prepare a letter clarifying the reasons why the meeting could not be held, or why holding the meeting was delayed beyond the statutorily prescribed period. Furthermore, for the benefit of juristic persons, limited companies and public limited companies should send a clarification letter together with the list of shareholders to the DBD once the AGM is finally held.
For a listed public company, the SEC launched Circular Letter No. SEC. ChorTor-1. (Wor) 9/2563 (2020) to facilitate a listed company in accordance with the DBD Notification dated 4 March 2020. However, for further details on additional issues of a listed company and guidance thereon, please see item 3.
- Legal timeframe for limited companies and public limited companies with supportive measures in place against the Covid-19 pandemic
(1) Holding a meeting of shareholders
|2.1 A copy of the list of shareholders||2.2 Financial statement|
|Limited company||Not scheduled||Within 14 days from the AGM||Within one month from the AGM|
|A letter, clarifying the reasons why the meeting could not be held at such time, as stipulated by the law, shall be prepared and submitted to the DBD after the meeting can finally be held.|
Limited Company A has the expiration date of the accounting period on 31 December 201; consequently, the meeting must be held under the law by 30 April 2020.
|30 June 2020 (due to being affected by the COVID-19 pandemic, the meeting date was postponed for two months).||14 July 2020||31 July 2020|
|Limited Company A prepared and delivered a letter, clarifying the reasons why the meeting could not be held at such time, as stipulated by the law, shall be prepared and submitted to the DBD after the AGM can finally be held.|
|Within one month from the AGM||Within one month from the AGM|
|A letter clarifying the reasons why the meeting could not be held shall be prepared and submitted to the DBD after holding the meeting.|
Public Limited Company B has the expiration date of the accounting period on 31 December 2019; consequently, the meeting must be held under the law by 30 April 2020.
|30 June 2020 (due to being affected by the COVID-19 pandemic, the meeting date postponed for two months)||31 July 2020||31 July 2020|
|Public Limited Company B prepared and delivered a letter, clarifying the reasons why the meeting could not be held at such time, as stipulated by the law, to the DBD after the AGM can finally be held.|
3. Legal timeframe for public limited companies listed on the SET with supportive measures already in place against the Covid-19 pandemic, as per guidance from the SEC and SET
In addition to the formalities under items 1 and 2, the SEC and SET has launched their flexible guidance measures to facilitate corporate formalities for a listed company, as follows:
- The flexibility to permit a listed company affected by the COVID-19 pandemic to be able to submit its financial statement of the first quarter of 2020, which is audited by the auditor appointed by the company and affirmed by the SEC, at this stage in order to be able to disclose the information and submit the financial statement of the first quarter to the SEC. Notwithstanding, such listed company shall propose the agenda for the appointment of an auditor to the AGM once the AGM is finally held, according to Newsletter of SEC No. 65/2563 dated 26 March 2020 and Circular Letter No. SEC. ChorTor-1.(Wor) 9/2563 (2020).
- In a case where there is an obstacle in holding its AGM, a listed company may consider postponement of the AGM according to the following guidance:
- In case of the AGM date being postponed but still using the record date that has already been imposed, the board of directors (BOD) or the appointed person authorised by the BOD can then impose the new AGM date. However, both the original and new AGM dates shall have a gap between them of not more than two months).
- In case of the AGM date being postponed and the company opts to impose the new AGM date, the BOD shall hold the meeting by imposing both the new AGM date and new record date as prescribed under Section 89/26 of the Securities and Exchange Act.
- For the amendment of date, time and venue of an AGM which has already been notified to the shareholders, the BOD or the person appointed by the BOD may hold the meeting to impose a new date, time and venue of the meeting; or the listed company may immediately publish the information of such change through a media news channel in order to issue the notification of the SET, as well as on the website of the listed company If there is sufficient time, the BOD should also send a notice to its shareholders.
- For dividend payment, a listed company may opt for an interim dividend payment in replacement of the dividend payment via the AGM via the BOD holding a meeting to resolve the agenda of the interim dividend payment. The listed company may use the shareholders list in order to ascertain who has the right for dividend, and may use the information of profit from the financial statement of the accounting year ending 31 December 2019 to consider the interim dividend payment. The listed company shall then pay the interim dividend payment to the shareholders within one month from the BOD meeting date and notify the interim dividend payment to the shareholders in the AGM.
- For the amendment of directors who retired by rotation and the payment of directors’ remuneration, which shall be approved by the AGM, in the case where the AGM is postponed; the same BOD members shall remain in their roles as directors until the AGM is finally held to consider the replacement of directors who retired by rotation.
- For directors’ remuneration, as per the normal practice, the AGM would have an agenda to resolve the directors’ remuneration in the second quarter of the year, of which such remuneration has already been paid since the first quarter of the same year. Thus, for 2020, if the AGM is postponed, a listed company may use the same guideline for remuneration payment, for the time being.
In addition to the formalities stated above, a company is also obligated to adhere to other related laws, e.g. tax filing.