Mar 20 Legal Update
(i) SFC and HKEX issued a joint statement on how the government’s recent COVID-19 restrictions on public gatherings might impact annual general meetings (“AGMs”), extraordinary/special general meetings (collectively as “EGMs”).
Such prohibition is currently in force until (as extended) 23 April 2020. Exemptions include gatherings required to be held within a specified period under applicable law and regulations.
The regulators have consulted the Government, and understand that AGMs are therefore exempted. EGMs will only be exempted if they satisfy this condition.
Notwithstanding such exemption, the regulators issued guidelines for listed issuers to consider as regards the timing/manner of holding meetings. These factors relate to safety concerns and public policy measures taken to combat the pandemic.
Firstly, should consider if it is possible to adjourn/delay for a reasonable period until after the prohibition period.
Secondly, on management of physical meetings.
Thirdly, on follow-up shareholder communications, explaining latest meeting arrangements.
What you should know/do:
Summary of guidelines
- Adjourn/delay possible?
— Mandatory legal/regulatory timing requirements?
— Extension of time, waiver, variation?
— Nature of business: urgency and importance; would delay materially harm the interests of the company and shareholders as a whole?
- Encouraged to consider a longer adjournment/delay
— Monitor the situation
— Consider alternatives: voting by proxy; technology (e.g. “virtual” meetings); submit questions to management in advance
- Management of physical meetings
— Safety precautions
— Measures to limit the number of attendees
— Listing Rules require that all shareholders be treated fairly and equally; but no requirement on format of meetings
— But need to check laws of their place of incorporation; constitutional documents
- Follow-up shareholder communications (meeting notice already sent)
— Confirm meeting status
— Explain the necessity of holding the meeting during the prohibition period
— Meeting arrangements and precautionary measures
- HKICS also issued useful guidelines to its members, including practical tips on managing physical meetings
- Our observations: considerations like payment/timing of dividend is also relevant
(ii) Privacy Commissioner issued a media statement on impact of COVID-19.
It addressed practical issues like whether employers can collect health data from employees; work-from-home arrangements and risks of personal data privacy breach.
The Commissioner stated that public health and safety of the community during the pandemic remains its primary concern. The Commission should be mindful of the compelling public interests when considering compliance with data protection laws, which should not be seen as hindering such measures.
Employers’ collection of additional personal data to help control the spread of disease should be “specifically related to” and “used for the purposes” in relation to public health; limited in duration and scope. (Principles of “minimization”, “purpose specification” and “use limitation”).
Transition to work-from-home arrangements might mean higher risks for privacy data breaches, e.g. loss of portable devices, malware as health alerts, etc.
There are useful Q+As, including security tips for working-from-home.
The Commission continues its operations to enforce the Competition Ordinance which remains in effect during the COVID-19 outbreak.
However, it recognises that there could be a need for additional cooperation between businesses in certain industries on a temporary basis, particularly to maintain the supply of essential goods and services.
It intends to take a pragmatic approach in its enforcement and advisory functions in respect of temporary measures which are genuinely necessitated by the COVID-19 outbreak and in the interests of Hong Kong consumers and society.
Where businesses propose such temporary measures, they or their relevant industry bodies should contact the Commission to discuss.
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