CMA extends deadline for AGMs to April 30 over COVID-19

March 18, 2020

The Capital Market Authority (CMA) has decided to extend the deadline for holding the annual general meetings (AGMs) of public joint stock companies by a month to enable firms to reschedule meetings to comply with the government directives on COVID-19.

‘The CMA has extended the period for holding general meetings of public joint stock companies to April 30 instead of March 30 as part of the efforts exerted by the competent authorities in the sultanate to prevent the spread of the coronavirus,’ the market regulator said in a notification on Tuesday.

Meanwhile, the Ministry of Commerce and Industry (MoCI) through a tweet also announced to postpone the AGMs of closed joint stock companies in the sultanate. ‘In the context of the precautionary measures approved by the Supreme Committee to limit the spread of COVID-19, the ministry has decided to postpone the annual ordinary general assemblies of closed joint stock companies,’ MoCI said in the tweet.

The CMA’s notification said that the companies desirous of postponing the AGMs must disclose the same on the Muscat Securities Market website.

The CMA also asked all public joint stock companies, auditors and legal advisors to observe preventive measures for COVID-19 to combat infections and curb the spread of the disease during general meetings. These measures include restricting attendance to shareholders and stakeholders only, speedy proceedings of the general meeting, and making provisions for sanitisers along with avoidance of shaking of hands.

The CMA explained that the move comes as part of the efforts taken by the authorities to deal with the development related to the outbreak of coronavirus.

As per the regulatory guidelines, all publicly listed companies are required to hold AGMs before March 31. According to market experts, holding AGMs are mandatory for taking shareholder’s approval before distributing dividends, and a delay or postponing of AGMs could also potentially delay dividend distribution by the companies.

“The CMA’s circular to extend the deadline has come only today, so we are not sure about its impact. The companies may take some more time before rescheduling AGMs,” said Joice Mathew, head of research at United Securities.

He said so far no company has announced the postponement of AGMs, and ‘it is not easy to reschedule AGM as there are number of people including company’s directors, officials, auditors, shareholders and other professionals involved in the process’.

“Moreover, rescheduling any event has some logistic challenges, and some of chairmen and directors and other officials may not be available on the new proposed date. So, we have to wait and watch, how companies are going to respond to it,” said Mathew.

Usually shareholders of public joint stock companies expect dividend distribution in the end of March for the previous year. According to market experts, a significant number of shareholders are waiting for dividends so to sell their holdings in the wake of recent fall in the MSM following a global sell-off due to ongoing economic turmoil.

Similar content