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  • TMA-2.2 TMA-2.2 Independent Advice and Shareholder Approval

    • Appointment of Advisors by Offeree

      • TMA-2.2.1

        A board which receives an offer or is approached with a view to an offer being made, must, in the interests of shareholders, appoint an independent professional adviser to advise the board as to whether the financial terms of the offer is, or is not, fair and reasonable. Such advice, including reasons, must be obtained in writing and made known to shareholders by including it in the offeree board circular along with the recommendation of the offeree company’s board regarding acceptance and voting, where applicable, of the offer. The board must announce the appointment of the professional adviser in the initial announcement of the offer or possible offer, or as soon thereafter as the appointment is made.

        Amended: January 2024
        Amended: January 2022
        Amended: October 2019

      • TMA-2.2.1A

        For the purposes of Paragraph TMA-2.2.1, the offeree company’s board, prior to appointment of an independent professional adviser, must ensure that the independent professional adviser has sufficient experience and a satisfactory work record in corporate finance or in a related field over the period of at least the past 5 years.

        Added: January 2022

      • TMA-2.2.1B

        For the purposes of Paragraph TMA-2.2.1A, a professional adviser is considered to have the relevant corporate finance experience if it has provided advice for any of the following:

        a) IPOs;
        b) Mergers and acquisitions involving listed companies;
        c) Fund-raising exercise through the capital market by listed companies; and/or
        d) Restructuring exercises involving listed companies.
        Added: January 2022

      • TMA-2.2.2

        [This Paragraph was deleted in October 2019].

        Deleted: October 2019

      • TMA-2.2.3

        When it is not possible to give a recommendation or there is a divergence of views amongst board members or between offeree board and the professional advisor, as to the merits of the offer or recommendation being made, then it must be stated in the offeree board circular and an explanation given, including the arguments for the recommendation to shareholders with regards to acceptance or rejection of the offer. The views of any directors who are in a minority must also be included in the offeree board circular.

        Amended: January 2024
        Amended: October 2019

      • TMA-2.2.3A

        If a director has a conflict of interest, he must not be joined with the rest of the board in the expression of their views on the offer. The conflict must be disclosed, in the offeree board circular, to the shareholders.

        Added: January 2024

      • TMA-2.2.4

        [This Paragraph was deleted in October 2019].

        Deleted: October 2019

    • In-Eligible Professional Adviser(s)

      • TMA-2.2.5

        A person shall not be appointed as an independent professional adviser if the person is a related company to the offeror or offeree or who has, or had, a significant connection, financial or otherwise, with either the offeror or the offeree company, or the controlling shareholder(s) of either of them, of a kind likely to create, or to create the perception of, a conflict of interest, or reasonably likely to affect the objectivity of his advice.

        Amended: October 2019

      • TMA-2.2.5A

        For the purposes of Paragraph TMA-2.2.5, a professional adviser would not generally be considered independent if the professional adviser:

        (a) holds voting rights in the offeror or the offeree at any time during the preceding 12 months from the beginning of the offer period. While determining the voting rights, shares held under trust arrangement, discretionary managed funds or other form of non-beneficial ownership by the professional adviser in the offeror or offeree company are not to be taken into consideration;
        (b) provides or has provided any audit and/or review services during the preceding 12 months from the beginning of the offer period;
        (c) has a business relationship with the offeror or the offeree, at any time during the preceding 12 months from the beginning of the offer period that contributes to more than 10 per cent in revenue or profit of the adviser, based on the latest financial statements;
        (d) has a representative on the board of the offeror or the offeree;
        (e) has a representative from either the offeror or the offeree on its board;
        (f) is or will be involved in the financing of the offer;
        (g) is a substantial creditor of either the offeror or the offeree, based on the latest financial statements; or
        (h) has a financial interest in the outcome of the offer other than as outlined in paragraphs TMA-2.2.5A(a)–(g) above.
        Added: January 2022

      • TMA-2.2.5B

        For the purposes of Paragraph TMA-2.2.5A(g), a professional adviser would be considered to be a “substantial creditor”, if:

        (a) the loan (including hire purchase, leasing, corporate bonds and Islamic financing) extended by the professional adviser to the offeror or the offeree represents more than 10 per cent of the loan outstanding in the offeror or the offeree; or
        (b) the loan (including hire purchase, leasing, corporate bonds and Islamic financing) extended by the professional adviser to the offeror or the offeree represents more than 10 per cent of the latest audited shareholders’ funds of the professional adviser; or
        (c) the professional adviser is a lead banker in a syndicated loan (including Islamic financing) extended to the offeror or the offeree, at any time during the period of 12 months preceding the beginning of the offer period.
        Added: January 2022

      • TMA-2.2.5C

        Paragraph TMA-2.2.1 requires the professional adviser to have a sufficient degree of independence to ensure that the advice given is proper and objective. Accordingly, in certain circumstances it may not be appropriate for a professional adviser who has had a recent advisory relationship with an offeror or offeree to give advice. In such cases, the CBB should be consulted. Also, a professional adviser may conduct functions such as corporate finance, lending, stockbroking, fund management and corporate advisory activities on a day-to-day basis quite separately within the same organisation, but it is necessary for the professional adviser to satisfy the CBB that it arranges its affairs to ensure that there is total and effective segregation of those operations (Chinese wall), and those operations are conducted without regard for the interests of other parts of the same organisation or of its clients.

        Amended: January 2024
        Added: January 2022

    • TMA-2.2.6

      [This Paragraph was deleted in January 2024].

      Deleted: January 2024
      Amended: October 2019

    • Independent Committee

      • TMA-2.2.6A

        If any of the directors of an offeree company is faced with a conflict of interest, then such directors must notify the offeree company’s board and their interest and they must not vote on the resolution to be adopted in regards of the offer, and if possible, the offeree company board should establish an independent committee of the board to discharge the board’s responsibilities in relation to the offer. If it is not possible to form an independent committee, responsibility for representing the interests of independent shareholders must reside primarily with the professional adviser. In case of doubt the CBB must be consulted.

        Added: January 2024

      • TMA-2.2.7

        Members of an independent committee of a company’s board of directors (established to discharge the board`s responsibilities in relation to the offer) must consist of non-executive directors of the company who have no direct or indirect interest in any offer or possible offer for consideration by the independent committee other than, in the case of a director of the offeree company, as a shareholder of the offeree company.

        Amended: January 2024
        Amended: October 2019

    • Shareholder Votes to be Conducted by Way of a Poll

      • TMA-2.2.8

        Whenever this Module requires a matter to be approved by shareholders or any class or group thereof in general meeting the vote must be conducted by way of a poll. The results of the poll must be announced.

        Amended: October 2019

    • Approval of Delistings by Independent Shareholders

      • TMA-2.2.9

        [This Paragraph was deleted in January 2022].

        Deleted: January 2022
        Amended: October 2019

    • Board of Offeror Company

      • TMA-2.2.10

        Where an offeror is a listed company, and the offer being made is a reverse takeover or when the directors of the offeror are faced with a conflict of interest, the board of the offeror must appoint an independent adviser and obtain professional independent advice as to whether the making of the offer is in the interests of the offeror’s shareholders. The advice must be obtained before announcing an offer or revised offer. The offer or revised offer must also be made subject to the approval of the shareholders of the offeror in a general meeting. The advice must be in writing and sent to the shareholders with the notice of the meeting. If an offeror considers that these requirements should not apply, where for example the offer is not material to the offeror, it may apply to the CBB for a waiver of these requirements.

        Amended: January 2024
        Amended: October 2019

      • TMA-2.2.10A

        For the purposes of TMA-2.2.10, a conflict of interests, amongst others, includes:

        a) significant cross shareholdings (10% or more) between an offeror and the offeree company;
        b) a number of directors common to both companies; or
        c) a common controlling shareholder in both companies is a director of or has a nominee director in either company.
        Added: January 2024

    • TMA-2.2.11

      [This Paragraph was deleted in January 2024].

      Deleted: January 2024
      Amended: October 2019

    • TMA-2.2.12

      [This Paragraph was deleted in January 2024].

      Deleted: January 2024
      Amended: October 2019

    • TMA-2.2.13

      [This Paragraph was deleted in January 2024].

      Deleted: January 2024
      Amended: October 2019