1.2
Definition of "independent director"
(v)
Paragraph 5.1 of Practice Note 13 in relation to paragraph (g) of the said definition states that a person is disqualified from being an independent director of a listed issuer if he had engaged personally in transactions with the listed issuer or its related corporation (other than for board services as a non-executive director) within the last 2 years, or is presently a partner, director or major shareholder of a firm or corporation ("the Entity") (other than subsidiaries of the listed issuer) which has engaged in transactions with the listed issuer or its related corporation within the last 2 years and the consideration in aggregate exceeds 5% of the gross revenue on a consolidated basis (where applicable) of the person or the Entity or RM1 million, whichever is the higher ("the said Threshold"). Mr A is an independent director of X Bhd, a listed issuer. If Mr A were to purchase a car from X Bhd for his own use, the value of which exceeds the said Threshold, would he be disqualified from being an independent director of X Bhd pursuant to paragraph (g) of the said definition and paragraph 5.1 of Practice Note 13?
As clarified under paragraph 5.2(a) of Practice Note 13, an acquisition of a car from the listed issuer will not be considered a "transaction" where it is purchased for personal use provided that the transaction is on normal commercial terms. Therefore, Mr A would not be disqualified from being an independent director of X Bhd pursuant to paragraph (g) of the said definition and paragraph 5.2(a) of Practice Note 13 due to the purchase of the car, provided that the purchase is on normal commercial terms.