More companies head to court for virtual AGM approval
Published:Sunday | November 1, 2020 | 12:10 AM
The Jamaica Stock Exchange, JSE, will return to the Supreme Court on November 25 seeking approval for another seven companies to conduct their annual general meetings via live-stream or electronic broadcast.
Following on a number of AGM postponements between March and June largely due to gathering restrictions in containing the spread of COVID-19, listed companies have been turning to the Supreme Court, either through representative action led by the JSE or individually, to get a special court order to hold their meetings virtually.
The first hearing took place on June 24, where 16 companies were given the nod for hybrid meetings, that is, on-site meetings combined with a virtual format. Key Insurance chose to petition the court on its own, and while its application was heard close to the date of the meeting, the company got the go-ahead in time for its AGM, which was held as scheduled on October 22 using the hybrid format.
The additional seven that now seek approval – Wisynco Group, NCB Financial Group, KLE Group, Everything Fresh, Ciboney Group, Caribbean Assurance Brokers, and Jamaica Broilers Group – will bring to at least 24 the listed companies cleared by the court to have their meetings done electronically.
Several listed companies, such as Dolphin Cove, have otherwise convened in-person meetings but have been holding votes for shareholders to approve virtual meetings in the future, via amendments to their articles of incorporation.
The initial representative action was organised by the JSE, after numerous letters and phone calls from listed companies who were challenged by the prospect of holding their AGMs amid restrictions on public gatherings imposed by the Government to no more than 10 persons at a time.
After many requests to ease the restrictions, the Holness administration, under the Disaster Risk Management Act, increased the gathering limit for events such as AGMs to 50 persons. But it still did not resolve the challenges for listed companies, most of which have thousands of shareholders, and many of which wanted strong participation to vote on special resolutions, including the adjustment to articles, adjustments to capital via the creation of new authorised shares, as well as share issues through additional public offers or rights issues.
Guidance from the Companies Office of Jamaica currently states that a virtual AGM or an on-site meeting combined with a virtual AGM is not permissible under Jamaican law. Any digression from what the legislation specifies has to be pre-approved through a special court order.
Decisions taken at meetings that do not conform to those procedures can, in theory, be challenged by shareholders in the future.
The 16 companies which previously got permission for virtual AGMs were Barita Investments Limited, Berger Paints Jamaica Limited, Caribbean Cement Limited, FosRich Company Limited, JMMB Group Limited, Lasco Distributors Limited, Lasco Financial Services Limited and Lasco Manufacturing Limited, Main Event Limited, Mayberry Investments Limited, Sagicor Group Jamaica, Supreme Ventures Limited, the Jamaica Stock Exchange, TransJamaican Highway Limited, Victoria Mutual Investments Limited, and Wigton Windfarm Limited.