Relationship Agreement Listing

Existing listed companies with controlling shareholders have until November 17, 2014 (i.e. six months after the new rules come into force) to establish a compliant relationship agreement or amend an existing relationship agreement to bring it into compliance. If the amendment of an existing relationship agreement or the entry into a new agreement relates exclusively to the requirements of the new rules, the ACF confirmed that this would not be considered a transaction with related parties and that there was therefore no need for an independent shareholder vote. It also stated in PS14/8 that the use of the length and terms and conditions of the arm in these provisions will only apply to transactions made after the new rules come into force. The agreement, which contains the commitments contained in LR 6.5.4R, also includes the majority shareholder concerned: it is likely that proposals to impose minimum substantive requirements for relationship agreements in listing rules will in some way contribute to promoting better corporate governance by establishing a framework to ensure that the issuer`s operations and relationships are at its peak. However, the new requirements for a relationship agreement may cause difficulties throughout the listing transaction if a shareholder becomes a majority shareholder after admission and refuses, for example, to enter into the contract. In addition, the requirement to limit the “position of influence” of a controlling shareholder to the issuer`s operational activities may be problematic in practice when (how often) the majority shareholder is represented on the issuer`s board of directors or the shareholder`s associate partners play leadership roles within the issuer. 1 A candidate holding more than one majority shareholder is not required to enter into a separate agreement with each controlling shareholder if, given its understanding of the relationship between the controlling shareholders concerned, the applicant reasonably considers that a controlling shareholder is in a position to obtain the respect of another controlling shareholder and the controlling shareholder`s associate shareholder with the LR 6.5.4R companies; under the old regime, a “dominant shareholder” was, in this context, a person (or a person acting collectively, whether formal or not) entitled to either exercise or exercise 30% or more of the voting rights at the issuer`s meetings at general meetings (voting rights attached to own shares excluded from the calculation of this percentage); or (ii) may control the appointment of directors who have been able to exercise a majority of votes at the issuer`s board meetings. – enter into a relationship agreement or amend existing agreements to include the necessary provisions for independence.