Latest Newsletter: MSWG Weekly Newsletter 17 August 2018 (English)
17 August 2018
MESSAGE FROM THE CEO
The SGX Listing Requirements (“LR”) has been amended to clarify expectations under the comply-or-explain regime. The Malaysian regime is an apply-or-explain regime. There are, of course, different nuances when it comes to the words ‘comply’ and ‘apply’.
The recent amendments to the SGX LR are quite interesting when compared to Bursa Malaysia’s Listing Requirements. We will examine four of these:
Disclosure on reasons for not paying dividends
The issuer is required to disclose reasons where directors decide not to declare or recommend a dividend.
Minority shareholders often look forward to dividends. But there are times when declaring a dividend may not be in the best interest of the issuer.
One such instance is when the issuer may fail the solvency test (by declaring the dividend) under the Companies Act 2016.
Another instance is when the issuer needs funds. In this instance, it may be cheaper to plough back the funds to the issuer than to pay out the dividend and borrow funds at higher cost. Hopefully, shareholders may be rewarded by share price accretion instead of dividends if all goes well.