Companies allowed to pay dividends as CMA set guidelines to hold AGM during COVID-19 pandemic

Co-operative bank building. Image|Courtesy

Firms can now pay dividends to shareholders as Capital Markets Authority set guidelines to the next Annual General Meetings during the Covid-19 pandemic.

So for, firms like the Co-operative Bank, Kakuzi and British American Tobacco (BAT) have been allowed to pay dividends.

This follows CMA move to set rules for firms listed in the Nairobi Stock Exchange (NSE) to conduct their Annual General Meetings, after the High Court ruling which allowed WPP Scangroup Plc to convene and hold a virtual general meeting.

"This court order supports the Authority’s strategic objectives of leveraging on technology and facilitating innovation in the capital markets," CMA said.

The meeting, according to the ruling, will be subject to compliance with the provisions of the Capital Markets Act and the Regulations.

The Court ordered and directed that any company listed on the NSE, and exhibit impracticability to conduct a general meeting due to the COVID-19 pandemic to be allowed to hold virtual general meetings subject to a No Objection from CMA.

“The court’s decision will benefit all listed companies that could not hold virtual general meetings due to the Articles of Association restrictions. Listed companies will apply to the Capital Markets Authority for a no objection, to proceed as directed by the court,” CMA said in a statement.

Guidelines

The listed firms will be required to issue a statutory notice to shareholders on the intended general meeting and obtain a No Objection from CMA least 14 days prior.

They will also need to set out in detail in the request to CMA, how the meeting will be held, whether virtual, electronic technology or a hybrid of both.

The companies need to confirm and demonstrate that shareholders shall be provided with a notice of the general meeting as provided for under the Companies Act 2015 and sufficient information to make informed decisions on any resolutions placed before the meeting.

Firms are also required to provide shareholders with sufficient opportunity to ask questions and seek clarifications from directors as well as an opportunity to vote, with clear registration and voting procedure.

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