Referring to the facts as set out in Question 10.38 above, D Sdn Bhd, is entering into a transaction with Y Sdn Bhd. Mr Z who is a director and a substantial shareholder of D Sdn Bhd is also a director and a substantial shareholder of Y Sdn Bhd. A Bhd has no holding company. Assuming that Mr Z has no interest in A Bhd, the listed corporation, is this a related party transaction?
Yes, this situation is considered a related party transaction. However, pursuant to Rule 10.08(9) of the ACE LR, A Bhd does not need to obtain shareholder approval, issue a circular or appoint an independent adviser or engage the service of a Sponsor or Adviser. A Bhd must however make an announcement which contains the prescribed information under Rule 10.08(1) of the ACE LR. In addition, the board of directors of A Bhd must approve the transaction before the terms of the transaction are agreed upon and ensure that the transaction is fair and reasonable to A Bhd and is in the best interests of A Bhd.