Most Read Contributor in Hong Kong, September 2016
Though it is widely known that Hong Kong has adopted a
"no-par" regime since the commencement of the
Companies Ordinance, Cap 622 (the "New Ordinance") in
2014, minor details in routine practice may easily slip away.
Recently, there has been a notable increase in listed companies
making clarification announcements for failing to replace
references to "issued share capital" with
"number of issued shares" in their annual
general meeting (AGM) notices.
In light of the abolition of the concept of "nominal
value" (also known as "par value")
under the New Ordinance, The Stock Exchange of Hong Kong Limited
(the "Exchange") made a number of amendments in April
2015 to replace "nominal value" or
"issued share capital" under various parts of
the Listing Rules, with "number of issued
shares", or "issued voting shares".
Among the amendments include changes to Rules 10.06(1)(c) and
13.36(2) which relate to the respective restriction on the size of
the repurchase mandate and the general mandate that issuers may
seek from their shareholders in an AGM.
Apparently, the Exchange has in recent months taken actions to
remind issuers of the Listing Rules amendments by requesting them
to make necessary changes in the AGM notices and publish
corresponding clarification announcements.
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This article provides information and comments on legal
issues and developments of interest. The foregoing is not a
comprehensive treatment of the subject matter covered and is not
intended to provide legal advice. Readers should seek specific
legal advice before taking any action with respect to the matters
discussed herein. Please also read the JSM legal publications
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Failure to comply with company law in Hong Kong can be very expensive for businesses. In a highly dynamic business and regulatory environment such as Hong Kong, it is challenging for business owners to remain fully aware of the latest legal requirements.
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