• Dr. Omran: The new amendments aim to protect shareholders rights in listed companies
FRA’s BOD approved new amendments to listing and delisting rules to protect shareholders rights in listed companies in line with international best practices in this regard.
Dr. Mohammed Omran, FRA’s Chairman explained that introducing these amendments stemmed from the Authority’s regulatory role to protect investors through ensuring adherence to listing and delisting rules and following up investment decisions of listed companies.
FRA’s Chairman says that the amendment adds two new items: The first stipulates that listed company can acquire shares of unlisted companies whose fair value equal or more than 100% of the market value (at the date of acquisition) in accordance with the report of an independent financial consultant . In addition, the acquired companies shall meet the requirements and conditions that allow continuing listing on the Stock Exchange. On the other hand, if the aforementioned acquisition results in an increase in the capital of the listed company and losing the condition set for the percentage of free-traded shares, the company must fulfill the requirements of continuing listing within a period not exceeding a month from the date of completing acquisition procedures. This shall be stated in the prospectus or in a disclosure report approved by the Authority.
Dr. Omran adds that the second item states that if the company has waived its right to participate in capital increases of one of the companies which it contributes to 10% or more of the shareholders ’rights or revenues from the reality of the latest financial statements and / or other fiscal year revenue, an approval from the company’s General Assembly shall be obtained.
Listing and delisting rules are the legal framework regulating the controls and procedures for listing and delisting on the Stock Exchange, pursuant to the provisions of Article (16) of the Capital Market Law. These rules regulate all matters related to companies and entities wishing to list their securities on the stock market, whether Egyptian or foreign. These rules clarify the conditions required to list securities and the procedures to be followed in this regard. Also, it clarifies listing conditions on FRA’s registry. It states the obligations incurred by the company during the period of listing on the Stock Exchange, namely disclosures that it must adhere to, requirements of governance , protection of minority rights, as well as provisions related to treasury shares and controls to amend the capital, ending with defining cases of listing and delisting , whether it is optional or compulsory.
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