More than 170 general meetings held via electronic means with attendance over 80% of shareholders

Mohammed Al Abri: Success in convening general meetings electronically reflects new phase in the development of the capital market

Haitham Al Salmi: Happy with the exercise and the portal will use blockchain in the new version 

Capital Market indicators of the Omani market shows that the general meetings season this year overcame the challenges imposed by precautionary measures to deal with the outbreak of coronavirus using electronic means to convene general meetings which resulted in convening  about 170 general meetings electronically varied between ordinary annual general meetings and extraordinary. The average attendance was more than 80% for public joint stock companies and investment funds and about 74% voted prior to the date of the general meeting in addition to other gains such as saving time, funds and efforts employing blockchain technology for higher credibility in the results of voting without human interference with accurate results.

The move was conducted after the rapid response of the CMA to avoid delay in the general meetings of the issuers of securities due to suspension of the meetings in mid March based on the instructions of the Supreme Committee tasked with  dealingwith the developments of the outbreak of coronavirus.

On such development in the Omani capital market Mohammed Said Al Abri, Vice President, Capital Market Sector said the CMA was able to manage the case of general meeting of public joint stock companies and investment funds this year successfully and competently by convening the meetings via electronic means and providing for legislative environment to enable the companies holding the general meeting electronically.

Al Abri added that the general meetings season witnessed a breakthrough in regulatory aspect in that new rules for convening general meeting were passed to meet all legal requirements and the technology in addition to creating electronic portal for convening general meetings supervised by Muscat Clearing and Depository Company (MCDC) which is electronic hall for convening general meetings and the accompanying works as per the legal and procedural requirements adopted by the CMA and appropriate for the needs of such meetings. The portal added great value in recording wide participation by investors in the general meetings and voting on the proposals presented by the boards of directors compared to the attendance in the previous years, hence the portal enabled the investors to follow up the performance of the companies in which they invest remotely further to voting on the resolutions. 

Al Abri pointed out that  the number of general meetings convened through the portal were 170 general meetings varied between ordinary annual general meeting and extraordinary general meetings and most of the meetings were held in the first date appointed for the meeting except 8 extraordinary general meetings and four annual general meetings whereas the quorum was present in the second meeting which is indication the season was able to overcome the challenges imposed by the outbreak and is constructive indicator  confirming the success of electronic general meetings in the Sultanate.

Al Abri said this stage of the scheme contributed to inception of new stage of development in the Omani capital market with the objective of reaching to investors using technology  revolution especially the size of foreign investments in the Omani market ismore than 25% thus, easing virtual attendance of general meetings reflects high level of organization in the MSM which would add confidence and ease the influx of local and foreign capital.

Al Abri pointed out that  CMA has taken all procedures to provide protection to investors and to ensure the rights of the participants of MSM in view of the precautionary measures adopted by all the sectors to curb the spread of the virus. 

The CMA announced suspension of the general meetings of public joint stock companies and investment funds which were supposed to convene within 90 days from the end of the financial year for the entities their financial year ended on 31/12/2019 pursuant to Article 172 of the Commercial Companies Law, then the CMA issued a circular to the public joint stock  companies and investment funds approving distribution of dividends proposed in the agenda sent to the shareholders and approved by the respective regulators. The circular explained that  the record date will be the date specified in the notice of the general meeting and such dividends shall be presented  to the shareholders in the first opportunity to convene general meeting. He added the decision had positive impact on the performance of the MSM as well as the inspirations of investors. He said CMA issued another decision extending the convening of general meetings until June 2020.

Al Abri added the move in the Omani capital market by employing  electronic portal for convening general meetings of the issuers of securities enhances the regulatory readiness of the Omani capital market to be one of the key financing means and for investment initiatives for economic diversification which is a pillar of 2040 Oman Vision  further to the importance of the capital market to be safe and easy in dealing with its procedures to attract local capital  and provide lucrative investment opportunities  for the individuals and institutions in the community for more participation in the promising investment opportunities in the Sultanate through the investment initiatives and productive projects in the era of the renewed renaissance led by His Majesty Sultan Haitham bin Tariq may Allah protect him.

Haitham Salim Al Salmi, Director General of Muscat Clearing and Depository Company commended the electronic portal for convening general meetings for the issuers of securities which is a breakthrough in the regulatory aspect of the Omani capital market and the CMA responded quickly with the events of the season to enable the issuers of securities  continue their corporate actions without delay by endeavoring to  furnish suitable environment  to ensure the rights of shareholders,

Al Salmi said the portal enabled the public joint stock companies and investment funds listed on the MSM to assemble the shareholders in electronic portal or virtual hall to consider, discuss and vote on the resolutions through live display meeting all legal requirements of general meetings such as quorum and transparency. 

Al Salmi pointed out  that the outcome of the exercise  was accurate in presenting the attendance of shareholders in the meeting as the figures indicate  the average attendance of shareholders in the portal was more than 80% which is high percentage compared to the general meetings convened in the past years attended by shareholders personally or by proxy. We expect this percentage to increase in the coming seasons thanks to the increased awareness of shareholders to attend through the portal or attendance in person which is allowed in accordance with the rules approved by the CMA in  normal circumstances. 

Al Salmi pointed out that the portal  witnessed voting on the resolutions of the general meeting prior to convening as the average  voting during the three days that preceded the meeting was about 74% which is good indicator supporting a desire to widen the participation of shareholders in general meetings and enhancing the performance of public joint stock companies and investment funds.

Al Salmi talked about the gains of the electronic portal adding that the companies and funds commended the move for convening general meetings electronically using the portal as it saved a lot of time, funds and effort.

He added that the portal allowed the legal advisor to perform the duties accurately starting from approving the agenda and ending on voting on the resolutions in addition to accurate results of voting and rapid display to all the shareholders of the company and allowed them to communicate with the chairman of the meeting and the directors  and listen to the external auditor clearly and transparently.

The Director general of  Muscat Clearing and Depository Company expressed his happiness for the results achieved by the portal pointing out it will be more effective in the coming season after completion of the new version of electronic portal in the fourth quarter of this year. The company endeavor  to make  the portal  a single station for administering the affairs of general meetings starting from submitting and approving the agenda and ending by filing the minutes with the CMA as the portal will be linked to CMA without the need to use other systems or media such as email etc. He added the second version of the portal will use blockchain technology to enhance the credibility and avoid  interference of hums element in the process.

Al Salmi added the second version of the portal will coordinate with CMA and MSM to send the resolutions of the general meeting related to disclosure to be published on the MSM’s website within few minutes from the end of the general meeting without the need to wait which will enhance disclosure process and allow the participants of the MSM to take sound investment decisions based on clear and accurate information.