SINGAPORE LAW AND PRACTICE Contributed by: Jeffrey Lim, Daniel Lim, Frederick Tay, Genevi Lim, Lakshmanan Anbarazan, Sarah Lai, Stephanie Goh and Tobias Andreas Satria, Joyce A. Tan & Partners LLC
Compared to full acquisitions, minority investments generally take simpler forms, such as direct subscrip - tions of new equity or convertible instruments or pur - chases of shares from existing shareholders. 3.2 Regulation of Domestic M&A Transactions Outside the limited scope of key sectoral regimes (such as in the finance or media sector, or where the target entity is licensed under a regime that imposes change of control approval or notification require - ments) further discussed in 8. Other Review/Approv- als , there is generally no requirement for regulatory approval of M&A transactions solely due to foreign participation. Nonetheless, foreign investors should be mindful of three potential regulatory touchpoints: • competition law review by the Competition and Consumer Commission of Singapore (CCCS) under the Competition Act 2004, applicable where an M&A could substantially lessen competition (see 6. Antitrust/Competition ); • take-over regulation under the Singapore Code on Take-overs and Mergers, overseen by the Securi - ties Industry Council (SIC), applicable to M&A transactions involving the acquisition of large unlisted public companies (with more than 50 shareholders and net tangible assets exceeding SGD5 million) or public companies listed on the SGX; and • exchange listing rules as set out in the Listing Manual of the SGX, applicable to M&A transactions involving the acquisition of public companies listed on the SGX. 4. Corporate Governance and Disclosure/Reporting 4.1 Corporate Governance Framework For a description of the more common types of cor - porate structures in Singapore, refer to 1.1 Legal Sys- tem . Companies in Singapore are subject to typical cor - porate regulatory rules which are meant to promote transparency, accountability and risk management.
Examples include rules on annual general meetings, annual audits of financial statements, filing of corpo - rate actions, and statutorily prescribed reserved mat - ters requiring shareholders’ approval. Furthermore, directors of companies are subject to statutory and fiduciary duties (under common law) to ensure that they: • act bona fide in the interests of the company; • avoid conflicts of interests; • act for proper purposes; and • act honestly and use reasonable diligence in the discharge of their duties. Such duties imposed on directors aim to ensure accountability and transparency of the directors to the company’s stakeholders (including shareholders). Furthermore, public companies listed on the SGX are subject to additional corporate governance require - ments, such as requirements that the board of direc - tors be appropriately independent, and that all share - holders be treated fairly and equitably, as set out in the Listing Manual and the Code of Corporate Gov - ernance. 4.2 Relationship Between Companies and Minority Investors Generally, from a legal perspective, the Companies Act 1967 (CA) does not generally draw a specific definitional distinction between majority and minority shareholders (one exception is for disclosure require - ments; see 4.3 Disclosure and Reporting Obliga- tions ). Instead, most minority shareholder rights are to be negotiated between the parties and are then typically enshrined within shareholders’ agreements and the company’s constitution. Common examples of such rights include: • mandatory quorum rights; • veto rights; • board appointment rights; and • tag-along rights.
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