MOF, Acra accept proposals that make it harder to buy out minority shareholders in an offer
FUTURE compulsory acquisitions by controlling shareholders could soon be tougher, as the Ministry of Finance (MOF) and the Accounting and Corporate Regulatory Authority (Acra) have accepted proposed amendments to the Companies Act – closing a well-used loophole.
Observers said the proposed amendments are “fairer” to minority shareholders, especially when shareholders are faced with low-ball privatisation offers.
The Companies Act – specifically Section 215 – allows an offeror to exercise the right of compulsory acquisition once it obtains at least 90 per cent of a target company’s shares that it and its related companies do not already own.
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