BAHRAIN Law and Practice Contributed by: Noor Radhi, Fatima Alali and Saifuddin Mahmood, Hassan Radhi & Associates
or that would reasonably be expected to have a major influence on any investor’s decisions. The Offering of Securities Module Issued by the CBB This Module contains the CBB’s Directive (as amended from time to time) relating to the issu - ing and offering of securities. The directive in this Module is applicable to all market participants and relevant persons, including but not limited to: issuers of securities or any person acting on their behalf, listed companies, any person acting for or on behalf of listed companies, and share - holders of listed companies. This Module describes, among other things, the eligibility criteria for issuing securities and the application procedures for obtaining the regula - tor’s approval. Most importantly, it explains the requirement for companies to prepare a pro - spectus or offering circular when they offer their securities to the public or on private placement basis. The directors of the company must accept responsibility for the accuracy of the content of such prospectus or offering circular. The Takeovers, Mergers and Acquisitions Module by the CBB This Module applies to persons involved in, engaging in or intending to engage in an offer for, takeover or merger or acquisition of a control - ling interest (30% or more) in a company whose primary listing of its ordinary equity securities is on a licensed exchange in Bahrain. Each director of an offeror and of the offeree company, as well as those acting in concert and their professional advisers, has a responsibility to ensure, so far as they are reasonably able, that the requirements of the Module are complied with in the conduct of transactions subject to it.
While this Module applies to listed companies in which control may change as mentioned above, there are circumstances, such as where an unlisted company is a target of a listed com - pany (reverse takeover), in which it is necessary to consider the spirit, general principles, stand - ards and rules of this Module wherever it is appli - cable. When there is any doubt as to whether a proposed course of conduct accords with the spirit, general principles, standards and rules of this Module, parties or their advisers should consult the CBB in advance. 2. Corporate Governance Context 2.1 Hot Topics in Corporate Governance The market is closely monitored by the Ministry of Industry and Commerce, the Bahrain Bourse, and the CBB through the various directorates under its umbrella. As a result of close moni - toring, regulations, circulars and directives are issued on a regular basis, focusing on transpar - ency, efficiency, clear communication, fairness, accountability and anti-money laundering. 2.2 ESG Considerations Companies with activities that are environment- related are subject to the rules and regulations governing this sector and are required to adhere to the laws on Environment and Public Health as well as the regulations and standards of the Supreme Council for Environment. Ensuring compliance with the law is good governance and is the responsibility of the company and its board of directors. Social responsibility is one of the principles of corporate governance detailed in 1.2 Sources of Corporate Governance Requirements . Compa - nies are considered to have social responsibility and the board of directors is expected to have
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