Notice period for companies’ EGMs to be cut to 7 days

The government has submitted an amendment to the Companies Act to shorten the notice period for Extraordinary General Assembly (EGMs) of companies to seven days.

The bill is sponsored by Feydhoo MP Ismail Nizar.

The Parliament, which is currently in recess, held an extraordinary sitting last week to hear the bill. It was sent to the Economic Committee for review in another extraordinary sitting held on Monday morning.

The bill comes with the Bank of Maldives (BML) set to hold an EGM on September 21 at the instructions of the Finance Ministry to approve changes to its board.

The bill stipulates that companies must issue notice for Annual General Meetings (AGMs) within three days of receiving written requests for such meetings, and hold the meeting within 10 days.

The law currently stipulates that companies must issue notice for AGMs within 21 days of receiving written requests for such meetings, and hold the meeting within three months.

The new bill also stipulates that companies must issue a seven-day notice for Extraordinary General Meetings (EGMs) instead of 14 days.

During the preliminary debate on the bill on Monday, Deputy Speaker Ahmed Nazim, who represents the Dhiggaru constituency, highlighted on BML’s CEO Karl Stumke’s resignation on September 8, ahead of the EGM.

“An EGM needs to be held quickly to appoint a new CEO. Therefore, we need to shorten the process for EGMs. With this revision, we can hold another EGM soon after the one scheduled for September 21,” he said.

Nazim said the changes will benefit not just BML, but also other companies, including the State Trading Organization (STO), which has initiated the process of taking over Fenaka Corporation.

He said that the companies will need to hold EGMs during the process.

The Companies Act currently stipulates that the minimum number of board members in state-owned enterprises will be set by law or a law or presidential decree regarding the formation of such an enterprise.

The new bill states that the minimum number of board members can also be set in the company’s regulations.

It also states that if the number of board directors in public and private companies falls below the minimum requirement, new directors must be appointed within 10 days instead of 30.