Muscat: With the annual general meeting (AGM) season approaching, companies are forwarding their applications for the approval of ordinary AGMs by the Capital Market Authority (CMA). Most ordinary AGMs convene in March every year.
On the importance of general meetings, Mohammed Saif Al Rashdi, Director of Legal Affairs and Enforcement Department at CMA, said the legislator conferred on the general meetings a regulatory role, including protecting the rights of small shareholders and ensuring integrity, and prohibiting conflicts of interest between related parties as the general meeting is the supreme authority that takes all resolutions in material matters over the powers of the board of directors and the resolutions are final and mandatory.
He added that the general meeting of the company has wide powers in that the shareholder can vote and contest its decisions, in addition to measuring the competency of directors and their ability to contribute to directing the management of the company, as well as electing the directors to lead the company in the interest of the shareholders.
The legislator allowed the shareholders who hold at least five per cent of the shares to suspend the resolutions of the general meeting resolved in favour of a specific group of shareholders or detrimental to them or for the benefit of directors or others by objecting to the board of directors of the CMA.
Al Rashdi said that CMA commenced the approval process of the general meetings of public joint stock companies this season, adding that CMA is keen to provide protection to the shareholders to exercise their rights by organising the timetable of general meetings to ensure their attendance. CMA will dispatch an observer to attend the meetings to ensure consistency of the resolutions with the law. CMA is also monitoring the companies’ disclosure through the MSM system and the key resolutions taken at the general meeting.
Al Rashdi said the legislator has set out an integrated legal framework for the rights of shareholders in the general meeting and provides for a regulatory role at the meeting. However, in reality, some shareholders don’t exert efforts to know their rights or willingly don’t take part in general meetings as many of them speculate in the shares without adequate knowledge about the company’s projects and commercial plans, and others lack the legal, financial and administrative knowledge to actively participate in the discussions.
Normally, the companies disseminate their future plans at the general meeting and distribute brief statements that allow an ordinary person to participate in the decision making at the general meeting to protect his interests and exercise his rights.