MYANMAR Law and Practice Contributed by: Kana Manabe, Thit Thit Aung, Julian Barendse and Nirmalan Amirthanesan, Myanmar Legal Mori Hamada
4.5 Filing/Reporting Obligations There is currently no market for derivative instruments in Myanmar. 4.6 Transparency There is no requirement for shareholders to disclose the purpose of their acquisitions. There is no practice of hostile takeovers in Myanmar.
required for payments and finance involving Myanmar or Myanmar citizens or companies. 3.2 Significant Changes to Takeover Law There have been no significant changes to takeover laws. No changes are expected during the next 12 months. 4. Stakebuilding 4.1 Principal Stakebuilding Strategies Building a stake in a target prior to launching an acqui - sition offer − albeit possible under the MCL − is not customary in connection with acquisitions in Myan - mar. 4.2 Material Shareholding Disclosure Threshold Under Notification No 1/2016 of the SECM, an extraor - dinary report would be required in connection with share acquisitions that result in: • a change in a public company’s parent company or major shareholder (defined as a shareholder of more than 20% of shares in the company); or • a transfer of a public company’s material undertak - ing. The daily trades by foreign investors in listed com - panies and companies registered on the PLB would need to be reported to the YSX for the purposes of ensuring compliance with applicable restrictions on foreign shareholding (see 2.3 Restrictions on Foreign There are no limits on the ability of a company to include rules in its corporate charter that create bar - riers to an acquirer increasing its stake in a target. However, these kinds of hurdles are unusual. 4.4 Dealings in Derivatives There is currently no market for derivative instruments in Myanmar. It is expected that the regulatory frame - work for such instruments will develop over time as Myanmar’s financial market expands. Investments for more information). 4.3 Hurdles to Stakebuilding
5. Negotiation Phase 5.1 Requirement to Disclose a Deal
There is no obligation to disclose a deal other than where the material shareholding disclosure thresholds are triggered for public companies (see 4.2 Material
Shareholding Disclosure Threshold ). 5.2 Market Practice on Timing
Disclosure of transactions is typically based on the commercial requirements of the parties involved and the applicable legal requirements (eg, disclosure obligations of foreign investors under overseas stock exchange rules). 5.3 Scope of Due Diligence As in other jurisdictions, the scope of due diligence will depend on the risk appetite of the acquirer. A typi - cal legal due diligence would cover: • the corporate information of the company; • compliance with Myanmar law; • verification of its licences and assets (including IP); • review of material contracts; • labour and environmental compliance; and • outstanding financial obligations and securities granted by the company. In Myanmar, it is particularly important to undertake thorough due diligence of the following. • Sanctions risk – as noted in 1.1 M&A Market , sanctions have been imposed by a number of jurisdictions, including the USA, the EU, the UK, Canada and Australia. As a result, it will be impor - tant to review the ownership and management of potential targets in order to assess whether there
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