Companies put AGMs on hold

Investors in listed companies have been dealt a double blow by the COVID-19 pandemic as they cannot meet for annual general meetings (AGMs) to elect directors and conduct other business due to the ban on gatherings, Barbados TODAY has learned.

While some companies were reportedly considering hosting virtual AGMs, Barbadian company law does not allow for holding anything other than in-person AGMs for shareholders. But the hosting of AGMs has been delayed indefinitely due to Government’s emergency measures to contain COVID-19.

In the interim, the Financial Services Commission (FSC) has given regulated entities such as credit unions, mutual funds, pension funds and listed companies an extension to file unaudited financial statements and other important documents without facing penalties,

Any decisions taken using virtual meetings would be illegitimate, Barbados TODAY was told.

But insurance giant Sagicor Financial Corporation, which is now listed on the Toronto Stock Exchange and is expected to delist from the Barbados Stock Exchange (BSE) soon, is set to make history next month when it holds its first ever online shareholders AGM

In a statement on its website, Sagicor said: “An annual and special meeting of shareholders will be held on Monday, June 15, 2020 at 11 a.m.

“The board of directors of Sagicor has been closely monitoring the evolving coronavirus (COVID-19) situation. It has determined that, following the introduction of social distancing measures and prohibitions on non-essential travel and public gatherings by several governments, this year, Sagicor will hold its meeting in a virtual-only format via live online webcast.

“As such, it will not be possible for shareholders to attend this year’s meeting in person.”

General Manager of the Barbados Stock Exchange (BSE), Marlon Yarde told Barbados TODAY: “Sagicor is registered and incorporated in Bermuda. Their bylaws and the legislation in Bermuda facilitates that.  Barbados’ legislation does not facilitate that. Trinidad’s legislation facilitates it too but not ours.”

Asked what will happen to other listed companies, he said: “The law does not permit it [virtual AGMs] and the legislation has not changed. So until the legislation has changed and or the Emergency Management Act allows more than ten people to gather, you have to abide by what the law says.”

Representation has been made to the FSC, the Corporate Affairs and Intellectual Property Office through the Law Review Commission requesting that “changes be made to the legislation to facilitate electronic AGMs. Right now the legislation only facilitates electronic board meetings”, Yarde said.

In an update issued more than a month ago to regulated entities, the Financial Services Commission (FSC) stated: “Entities are encouraged to file unaudited financial statements or financial returns including quarterly and annual financial statements in accordance with the requisite deadlines.

“Entities who are unable to file the unaudited March 2020 quarterly financial statements or returns by the deadline April 30, 2020 as a result of the COVID-19 disruption, may complete their filings on or before May 30, 2020 without regulatory action.

“An entity seeking a further period of time for the filing of the March 2020 statements or returns; or an extension in respect of other unaudited financial statements or returns is required to submit an application outlining the reasons for the extension request and include supporting information.”

The FSC informed credit unions: “Where a credit union’s ability to convene its AGM in respect of its latest financial yearend has been impacted by COVID-19, that credit union may postpone the holding of that AGM for a period of up to three months after the expiration of the initial three month period stipulated by the Co-operative Societies Act CAP 378A without regulatory action.

“This applies in respect of credit unions whose latest financial year ends prior to September 30, 2020.”

Retail and financial services conglomerate Cave Shepherd & Co. which includes Fortress Funds Limited, Colombian Emeralds, Cave Shepherd Stores, SigniaGlobe and Duty Free Caribbean, has told shareholders on its website that the AGM has been postponed indefinitely.