The outbreak of the COVID-19 pandemic has severely disrupted the convening of annual general meetings in Malta. Until the end of June, restrictions were still in force by the health authorities forbidding mass gatherings which prohibited companies from organising their annual general meeting (AGM).

It was customary practice in the past that companies with a December

financial year-end would have held their AGM by the end of June. Companies used to convene their AGM generally within a period of circa 12 months from the previous shareholder meeting. This was done notwithstanding the fact that according to the Companies Act, a company has a deadline of 15 months from the date of one AGM to the next.

Following the lifting of restrictions on mass gatherings on July 1, a total of eight companies will be organising their AGM next week with seven of these doing so in the traditional manner by having a physical meeting.

Although these companies are holding a physical meeting at one of the many conference facilities of the larger hotels, they are still encouraging shareholders to appoint the chairman as their proxy so as not to have too many individuals convening for the meeting in view of public health considerations. Moreover, these companies also stated that no reception will take place after the formal meeting, so shareholders will not be able to socialise after the event.

Meanwhile, International Hotel Investments plc announced that “in view of the advice to still exercise caution when it comes to mass gatherings”, it will be holding this year’s AGM on a ‘remote basis’ on July 31. This must not be interpreted that shareholders can use one of the very popular video conferencing facilities such as Zoom or Microsoft Teams to follow the conduct of the meeting. In fact, the IHI meeting will not be transmitted live but will be held behind closed doors.

The holding of an AGM on a remote basis became possible following the entry into force of The Companies Act (Public Companies – Annual General Meetings Regulations) 2020 on July 10. These regulations brought about a number of changes to the Companies Act apart from the holding of a general meeting remotely (whether annual or extraordinary). One of the other amendments is the extension of the period for holding an AGM. The regulations provide for a five-month extension to the 15-month period stipulated in the Companies Act.

With respect to the regulations for the holding of meetings remotely, a number of procedures must be followed. Shareholders will only be able to appoint the chairman of the meeting as their proxy and they are to indicate on the form of proxy, the manner in which such proxy is to vote on each resolution put to the meeting.

The regulations also specify that sufficient time must be allowed for shareholders to ask questions which are pertinent and related to the items on the agenda, by submitting such questions within 48 hours prior to the meeting. The questions can be submitted either electronically or by letter addressed to the company. The questions will then be answered by the directors or by such persons delegated for this purpose and the answers to the questions submitted must be uploaded on the website of the company within 48 hours from the termination of the meeting.

Given the huge technological advances in recent years... hopefully some AGMs will eventually start taking place virtually

All other companies whose equity is listed on the Malta Stock Exchange have postponed their AGM to an unspecified date as yet. In line with the new regulations, they now have to convene the meeting within 20 months from their last AGM that took place in 2019.

The regulations also stipulate that if the Memorandum and Articles of Association of a company allow that a general meeting (whether annual or extraordinary) is held ‘virtually’, then this can take place provided that in the notice calling the meeting, there shall appear the means used for the virtual meeting as well as the procedure of how any member is entitled to attend and vote, can participate in the discussion and how such member can vote.

The holding of a virtual general meeting is also catered for in Chapter 12 of the Listing Rules. Listing Rules 12.21 states that “issuers may allow their shareholders to participate in the general meeting by electronic means, including any or all of the following forms of participation (i) real-time transmission of the general meeting; (ii) real-time two-way communication enabling shareholders to address the general meeting from a remote location; and (iii) a mechanism for casting votes, whether before or during the general meeting, without the need to appoint a proxy holder who is physically present at the meeting”.

Given the huge technological advances in recent years and the significantly increased usage of video conference facilities especially during COVID-19, hopefully some AGMs will eventually start taking place virtually assuming that the technical procedures specified in the new regulations and also in Chapter 12 of the Listing Rules can be adhered to.

In my view, whichever method will be chosen for the holding of an AGM – whether it is the traditional approach, remotely or virtually – due to the understandable difficulties being encountered by most companies from the impact of COVID-19, all companies should publish an announcement following their AGM to provide an update on current business operations. This will indeed be helpful for the many shareholders who will not be attending or cannot participate in the meeting to keep abreast of ongoing developments.

Shareholders are evidently concerned about the impact of COVID-19 on all economies worldwide, and updated views by the directors on any type of recovery being experienced by their company, additional measures taken to preserve cash as well as the projected business pipeline should be shared publicly via a company announcement to assist in the conduct of an orderly capital market.

Meanwhile, shareholders who are either attending the meetings physically or submitting proxies to the chairman are urged to ask some of these important questions so as to stimulate a discussion and enable all market participants to have access to such important information.

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