Session 15

A. Disclosure by officers
• Directors and officers to disclose conflict (see general law
conflict rules and s 156 CA in sessions 11, 12 & 13 worksheet).
- Co. has to keep register of dir’s and CEO’s shareholding under
S164 CA.
- Directors and CEOs to notify co of interests they have in co’s
shares and changes to such interests:
(a) S 165 CA for unlisted co
(b) S 133 SFA for listed co
[refer to table in ICPAS reading for similarities/differences
between 2 sections]
 A. Disclosure by
substantial shareholders
• Substantial shareholders has to notify co:
- interests in voting shares : s 135 SFA
- changes in percentage level of interests in voting shares:
s 136 SFA
- cease to be a substantial shareholder: s 137 SFA

Note: Directors and CEOs need to give notice of ALL

changes in interests in shares. Substantial shareholders
have to give notice of CHANGE IN PERCENTAGE LEVEL of
shareholding.
 A. Disclosure by
company
• Financial records to be kept: s 199CA
• Financial reporting: s 201CA
• Minute books of members’ meetings, directors’ meetings
and managers’ meetings: s 188CA
• Register of debentures (s 93 CA), register of directors’
and CEOs’ shareholdings (s 164 CA), register of members
kept by public co (s 190 CA).
• Lodgment of documents : s 26, 33, 71, 173, 197 CA
• Additional disclosure for public listed co (see slides 6 to
12)
 B. Substantial shareholder
• Substantial shareholder : person has interest in voting shares in
the co and the total votes is not less than 5% of the total votes
attached to all voting shares: s 2(4) SFA
• Substantial shareholders has to notify co:
- particulars of interests in voting shares, within 2 business days
after person becomes aware he is substantial shareholder (s 135
SFA)
- changes in percentage level of interests in voting shares, within 2
business days after person becomes aware of change (s 136 SFA)
- cease to be a substantial shareholder, within 2 business days after
he becomes aware he has ceased to be substantial shareholder
 C. Public listed company
• Co. has to make announcement when notified by its director,
CEO, substantial shareholder of interests in changes or
changes in such interests: s 137G SFA
• Continuous disclosure under Rule 703 and 704 Listing
Manual
• In annual report, disclose corporate governance practices
with reference to SCCG : Rule 710 Listing Manual
• Disclose interested party transactions as required by Chapter
9 Listing Manual
• Disclose realisations and acquisitions required by Chapter 10
Listing Manual
 C. Public listed co
S203 SFA and Chapter 7 Listing Manual
• Co required by Listing Manual chapter 7 to
notify the securities exchange of information
on specified events or matters as they occur or
arise so that securities exchange can make that
information available to a securities market.
• If co does not comply with Listing Manual
chapter 7, s 203 SFA makes it an offence.
 C. Public listed co
• Interested person transaction (IPT) under chapter 9
provides for a specific type of conflict situation – where
person closely associated with co enters into transactions
with the co.
• S 156(1) CA requires disclosure where director/CEO
interested in transaction with the company.
• IPT under chapter 9 different from s 156 CA in that :
chapter 9 IPT covers more persons than just director, CEO ;
covers not just listed co but subsidiary of listed co and
associated co ; may require disclose or obtain shareholder
approval depending on quantum.
 C. IPT under Chapter 9

Transaction Interested
Entity at risk
• Provision or receipt of person
financial assistance
• Listed company
• Acquisition, disposal or • Director, CEO,
• Unlisted controlling
leasing of assets
subsidiary • Provision or receipt of shareholder of
• Unlisted the listed
services
Associated • Issuance or subscription company
company where • associate of
of securities
the listed issuer • Granting or being granted director, CEO
together with options or controlling
interested • Establishment of joint shareholder
person(s) control ventures or joint investments
the associated co
9
 R905 R906
Threshold 1 Threshold 2
≥ 3% of ≥5% of
group’s latest group’s latest
audited NTA audited NTA
Transaction
value
• shareholder’s
approval

• immediate
announcement

10
 C. Chapter 10 Listing Manual
Rule 1006:
(a) Net asset value of assets to be disposed of, compared to
group’s net asset value [NA for acquisition of assets]
(b) Net profits attributable to the assets acquired or disposed of,
compared to the group’s net profits
(c) Aggregate value of the consideration given or received,
compared with the issuer’s market capitalisation based on
total number of issued shares
(d) Number of equity securities issued by the listed co as
consideration for an acquisition, compared with the number
of equity securities previously in issue
(e) Aggregate amt of reserves to be disposed of compared with
aggregate of group’s reserves [NA to acquisition of assets]
 C. Chapter 10 Listing Manual
Category Situation Disclosure/Approval
Non-disclosable All figures computed under Co may announce
transactions Rule 1006 amount to 5% or transaction if it chooses.
less.
Disclosable transactions Any of the figures Immediate announcement
computed under Rule 1006 after terms have been
exceed 5% but does not agreed.
exceed 20%.
Major transactions Any of the figures Immediate announcement
computed under Rule 1006 after terms have been
exceed 20%. agreed. Transaction
conditional on shareholder
approval.
Very substantial Acquisition of assets where Immediate announcement
acquisitions or reverse any of figures computed after terms have been
takeover under Rule 1006 is 100% or agreed. Transaction
more, or which result in conditional on shareholder
change in control of co. approval and approval of
SGX.