The High Court has cleared private companies to hold virtual annual general meetings (AGMs), putting them at par with listed firms that were allowed to hold remote meetings following the ban on mass gatherings in the wake of Covid-19.
Kenya Private Sector Alliance (Kepsa) had applied for court clearance given that holding physical AGMs has been rendered impossible by Covid-19 and related public health regulations issued to contain the spread of the virus.
The court had in April cleared listed firms to hold virtual AGMs despite their internal rules only allowing for physical meetings, leaving out private companies.
“Leave be and is hereby granted to Kepsa Limited’s members who are not listed limited liability companies, who so desire, to hold, convene and/or otherwise conduct general meetings employing the use of technology,” directed the court.
This will allow hundreds of private entities to join their listed counterparts in holding virtual shareholder meetings.
Analysts reckon it will help firms whose financial year ended in December to hold AGM before the June 30 deadline.
“This is timely intervention since most companies with a December year did not have virtual provisions in their articles of association,” said Bernard Kiragu, managing partner at Scribes Services, a company secretary and corporate governance consultancy.
“The harder bit now is ensuring the meetings don’t infringe on members’ rights.”
The postponements of the AGM meant shareholders were not able to vote on resolutions such as dividend payments, changes to the directorship, approval of accounts, share splits and bonus issues.
Some private firms had applied to defer the AGMs.
Several listed firms who have held AGMs have so far changed their articles of association to allow for virtual meetings, meaning that they may not require special clearance in future.
High Court has, however, reminded private firms holding the meetings to abide by provisions in the Companies Act as well as the guidelines that were issued by the registrar of companies in holding hybrid or virtual meetings.
The Companies Act 2015 require all companies, except for single-member companies, to hold AGMs.
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