On 27 April 2020, the Minister of Finance, Economic Planning and Development (Minister of Finance) issued two important regulations under the Companies Act 2001 (Companies Act) and the Insolvency Act 2009 (Insolvency Act).
It is to be noted that both regulations came into force on 30 April 2020.
Regulations under section 360(1)(b) of the Companies Act
The Companies (Amendment of Schedule) Regulations 2020 (GN 82 of 2020) (Shareholder Regulations) amend the Fifth Schedule of the Companies Act.
The Fifth Schedule of the Companies Act regulates meetings of shareholders of a company. In particular, a company is required to serve written notice of a meeting to every director, secretary and auditor of the company not less than 21 days before the meeting. Insofar as the contents of the notice is concerned, it must set out the following details namely (a) the nature of the business to be transacted at the meeting in sufficient detail as would enable a shareholder to form a reasoned judgment on it and (b) the text of any special resolutions which are to be submitted to the meeting.
As a result of the Shareholder Regulations, a company is now required to confirm two additional elements in the written notice of the meeting. First, the date of the meeting. Secondly, a detailed agenda together with any other document which is relevant to the meeting.
Regulations under sectionS 232(2C) and 411 of the Insolvency Act
The Insolvency (Administration) (Equal Treatment to Classes of Creditors) Regulations 2020 (Creditors' Regulations) (GN 83 of 2020) apply to a Mauritian company which is under voluntary administration. In particular, the Creditors' Regulations provide guidance on the meetings to be held by an administrator.
The Creditors' Regulations provide that creditors are to be divided into classes identified under the Insolvency Act. Each such class shall vote separately on matters for which certain classes are required to vote. Of importance, the Creditors' Regulations confirm that an administrator must accord equal treatment to creditors who fall within the same class. It therefore follows that an unsecured creditor cannot be placed in the same class as those identified as preferential creditors and each of these classes of creditors must vote independently of each other on matters where these classes are entitled to vote. Furthermore, an administrator must treat all preferential creditors alike and the same extends to unsecured creditors in the example given.
On the question of the notice of a creditors' meeting which an administrator is required to issue, the Creditors' Regulations confirm that it must meet with the requirements of section 232(8) of the Insolvency Act. Thus, a notice of a meeting of creditors of a company must be in writing and confirm the following details:
- the administrator's postal, email and street addresses;
- the names of the related companies in respect of which the joint meeting is to be held;
- the creditor to whom the notice is sent may object to the joint meeting by a written objection to the administrator at the latter's contact details as detailed above within the time specified in the notice; and
- that unless the creditor objects in accordance with the notice, the creditor will be taken to have agreed to the joint meeting.
The passing of regulations of the nature outlined above by the Government of Mauritius comes at an important moment given the worldwide prevailing circumstances triggered by the COVID-19 pandemic. It demonstrates its willingness as a State to ensure business continuity at a critical time when, just as other Governments globally, it is deploying its efforts to cope with the concerns of a business community plagued by the consequences of the national lockdown imposed by the COVID-19 pandemic, amongst which, the very real threat or reality of insolvency. The awaited changes to Workers' Rights Act 2019 is expected to address the threat of unemployment which faces employees regardless of their position within their institutions.
Sharvada Bholla, Thodda, Regional Compliance Manager, and Vaishali Damonaiko, Pupil to Sharmilla Bhima, also helped in the preparation of this article.
Originally published Appleby, May 2020
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