Overhaul of Companies Act also gives Provident Fund investors equal rights at shareholder meetings
Singapore’s parliament has scrapped the country’s ‘one share, one vote’ policy for public corporations to give them more options when issuing shares as part of an overhaul of business law meant to ease regulation and give companies more flexibility, according to local media reports.
The amendment – one of 200 passed to the country’s Companies Act – will allow the 800 or so non-traded public companies in Singapore to issue various classes of shares, bringing legislation in line with that of most developed nations.
The change has been debated hotly in Singaporean politics in recent years, with those opposed to it saying it would concentrate power in the hands of corporations, cause problems regarding the pricing of various types of shares and create ‘second-class shareholders’. But the government says the overhaul of the Companies Act will be accompanied by a series of ‘checks and balances’ to safeguard the rights of shareholders.
‘The bill will require public companies to clearly demarcate the different classes of shares, so shareholders know the rights attached to any particular class of shares,’ said Josephine Teo, Singapore’s senior minister of state for finance, after parliament passed the amendments, as reported by Singapore’s Today newspaper.
Singapore Exchange, South East Asia’s largest bourse operator, and the Monetary Authority of Singapore are still debating whether to allow currently listed companies to take advantage of the rule. Companies on Singapore Exchange include SingTel (the country’s largest traded company by market capitalization), Singapore Airlines, Jardine Strategic Holdings, DBS, OCBC Bank and UOB Group.
Changes to the Companies Act also include an amendment that creates a ‘multiple proxies regime’ that will give investors in the Central Provident Fund, a social security savings plan for senior citizens, the same rights as direct investors regarding voting at shareholder meetings.