In response to the COVID-19 crisis, Thailand has imposed measures limiting both international and domestic travel, which in turn have impacted companies’ operations, including meeting the statutory requirements for holding an annual general meeting of shareholders (AGM). These meetings must be held in person at a physical location within four months after the fiscal year end.
Under current law, there are no alternatives to holding shareholder meetings in person at a physical location. Shareholders may appoint proxies to attend on their behalf, but the proxy must still attend the meeting. Convening such meetings by electronic channels, such as via teleconference or video conference is permitted, but the attendees must still be somewhere in Thailand and no more than two-thirds of the quorum can attend electronically. Paper meetings or circular resolutions are not permitted.
The Department of Business Development of the Ministry of Commerce of Thailand (DBD) has attempted to address this issue by waiving the fine for those companies that fail to hold their AGM by the deadline. In order to take advantage of this waiver, the company is required to submit a letter to the DBD immediately after holding the AGM stating that (i) the meeting was held after the four-month deadline and (ii) the reasons for the delay as a result of the COVID-19 crisis. The DBD will have discretion in granting a waiver request on a case-by-case basis. The waiver does not apply to the requirement to submit audited financial statements and the list of shareholders, and so these items are still subject to regular filing requirements.
On a related matter under a separate DBD announcement, audited financial statements and updated lists of shareholders must be done through the DBD’s e-Filing system only from 1 April 2020 until revocation of the DBD announcement. In other words, while the DBD announcement is in effect, manual submission of the list of shareholders and approved audited financial statements will not be accepted by the DBD.
From our experience in dealing with such relief measures which involve some degree of regulatory discretion or approval, there are often unforeseen hurdles. Thus, if a company is able to hold its AGM in the normal course despite the difficulties presented by the COVID-19 crisis, it should consider doing so. Physically holding the AGM by having the shareholders issue proxies to local representatives should be considered. Electronic meetings would be a second-best option given the somewhat restrictive conditions for holding such meetings.
Price Sanond is happy to assist companies in arranging to hold their AGMs during this pandemic to ensure that they are held in compliance with Thai law.