General requirements for new issue of securities
6.13
B Sdn Bhd is a subsidiary company of A Bhd, a listed corporation. B Sdn Bhd intends to issue shares to its own director. This director is not a director or major shareholder of A Bhd or its holding company or a person connected with such director or shareholder. Must A Bhd obtain shareholder approval for this issuance of securities?
Subject to Rule 8.23 of the ACE LR, A Bhd need not obtain shareholder approval for the above issuance of securities under the ACE LR. However, pursuant to Rule 6.07(4) of the ACE LR, the board of directors of A Bhd must approve the allotment/issuance to the director and ensure that it is fair and reasonable to the listed corporation, and is in its best interests. Further, A Bhd must make an announcement which contains the prescribed information under Rule 6.07(4)(c) and since it is not an exempted transaction under Rule 10.08(11)(a) of the ACE LR, the announcement must also comply with Rule 10.08(1) of the ACE LR.