The novel coronavirus, now known as COVID-19 has continued to spread around the world and Thailand has not been spared from this global crisis since the first reported case at least three months ago. Government and private sectors are struggling to minimize the disruption to ensure economic stability and business continuity.
Currently identified ways to contain the spread of the virus is through washing your hands, wearing a face-mask and practice social distancing by avoiding crowded areas.
Some companies may have planned or be planning to have their Annual General Meeting (AGM). Nonetheless, requiring shareholders to be in one place may expose the shareholders to a greater risk of infection. Some of the preventive measures as suggested by The Stock Exchange of Thailand (SET) and the Department of Business Development (the “DBD”) that they can take include:
- Postponement of AGM to a later date
A public company may consider postponing the AGM even though the record date has already been designated. The board of directors shall resolve to approve the new AGM date having the same record date provided that the new AGM date is within two months from such record date and the approval of the new AGM date is resolved before such designated record date. Alternatively, the company may consider postponing the AGM to be held on a date to be further determined and cancel the designated record date. The new record date can be designated again after the situation has been resolved.
- Declare Interim Dividend prior to the adjourned AGM
Provided that it is permitted under the Articles of Association, SET and DBD suggest that if the AGM cannot be held and the company has retained earnings, a public company may consider declaring interim dividend through the board of directors’ resolution and inform such interim dividend payment at the AGM.
- Video Conference
DBD encourages the company to carry out the AGM through video conferencing. In the case of a public company, of which the Articles of Association does not state about video conference, the DBD has now allowed such public company to hold AGM through video conference for ease of business operation amidst the outbreak. However, holding any video conference must comply with the Announcement of the National Council for Peace and Order No. 74/2557 on Teleconferences through Electronic Devices, and the Announcement of the Ministry of Information and Communication Technology on Security Standards for Teleconferences through Electronic Devices B.E. 2557.
- Granting Proxy to Independent Director
The SEC encourages the shareholders of listed companies to grant proxy to independent director(s) as well as encourages listed companies to raise awareness to the shareholders by highlighting this in the invitation for the shareholders’ meeting. Please find a sample of an excerpt of the option to appoint independent director(s) below:
“According to the World Health Organization (WHO), the COVID-19 viral disease has spread across various countries and is now declared a pandemic. In view of the current situation and our continuous efforts to stay abreast with the current updates, the Company hereby recommends that any shareholder who has come or had close contact with persons from abroad within 14 days prior to the date of the 2020 Annual General Meeting or having the symptoms and conditions reasonably suspected of being infected with the COVID-19 shall appoint any person as deemed appropriate or the independent director(s) of the Company as his/her proxy to attend the meeting and vote on his/her behalf. In this regard, the 2020 Annual General Meeting will strictly comply with “Recommendations on prevention and control of COVID-19 for meetings, seminars, or other mass gatherings” of the Department of Disease Control, the Ministry of Public Health dated 11 February 2020.”
- Submission of Clarification Letter to the Ministry of Commerce (the “MOC”)
DBD also issued a notification related to entities that may have directly or indirectly been affected by the outbreak. If the entities failed or delayed in carrying out meetings within the specific deadline prescribed by the relevant law, they are permitted to submit a clarification letter to MOC after holding the meetings. Please find a sample clarification letter provided by DBD here, or you may submit clarification via an online platform provided by the DBD here. Should you require any assistance in the preparation of a clarification letter, please do not hesitate to contact us.
Pursuant to an official notification dated April 3, 2020 issued under the Emergency Decree on Public Administration in Emergency Situation B.E. 2548, mass gathering activities that may cause risks to the spread of any disease, etc. is prohibited. Any person who fails to comply with the foregoing will be subject to a fine of not more than THB 40,000, or imprisonment of not over 2 years, or both. However, we note that there has been no clear statement from any relevant authority concluding that the gathering of people such as attending an AGM would not be considered a violation of the notification. We will promptly provide you updates if there is a new announcement with respect to this matter.
For further information, please contact our team at Kudun and Partners.
Authors:
Kudun Sukhumananda
Partner
kudun.s@kap.co.th
Piti Kerdpu
Associate
piti.k@kap.co.th
Nutthar Hongchutchaval
Associate
nutthar.h@kap.co.th
