JSE advises on the holding of AGMs during COVID-19 outbreak
In light of the social distancing measures designed by the Government to control the spread of the novel coronavirus disease (COVID-19) — which takes effect today — the Jamaica Stock Exchange (JSE) is advising stakeholders to not only be guided by said measures, but by the Companies Act in relation to the holding of annual general meetings (AGM) during the COVID-19 outbreak.
According to the exchange, in keeping with the Companies Act 2004 – section 126, a company has up to 15 months from the date of its last AGM to convene its next AGM. Given the provisions of the Companies Act, it means that listed companies have a grace period of three months within which to convene AGMs.
However, for the companies which are planning their first AGM, the Companies Act allows for a maximum period of 18 months from the date of its incorporation to convene its first meeting.
“We also take this opportunity to inform that while the Companies Act – section 141, provides guidance for directors to participate in meetings by electronic means, there are no similar provisions for members or shareholders of a company. In view of this, we encourage listed companies to examine their Articles of Incorporation regarding the holding of AGMs to ascertain whether there are any instructions given for extraordinary circumstances such as COVID-19,” the exchange stated.
In addition, it noted that in extreme circumstances, the court’s power in accordance with the Companies Act – section 130, could be invoked to order for an AGM be called in such a manner that the court thinks fit.
“As it relates to the postponement of AGMs which were previously communicated to the market, we encourage companies faced with this situation to be guided by the Companies Act and their Articles of Incorporation for the procedures which facilitate the postponement of an AGM,” the statement continued.
For companies not incorporated in Jamaica, the JSE advised that guidance be taken from the relevant jurisdiction’s legislation.
The social distancing policy put forth by the Government mandates that public gatherings are discouraged. If essential, there should be no gathering of more than 20 people, who should maintain a distance of 3-4 feet from each other.
