Conversion Of AB Shares into ordinary shares.
Concept & Meeting Arrangement
- In Malaysia, if a company has different classes of shares with different rights, such as A Shares and B Shares, and intends to convert them into ordinary shares, it must hold separate shareholders’ meetings for A Shares and B Shares.
- This type of meeting is known as Meeting With Respective Class of Shareholders (MWR), where each class of shareholders holds its own meeting.
Notice Requirement
- Each class of shareholders must receive at least 21 days’ notice before the meeting.
Approval Requirement
- At each respective class meeting, at least 75% approval must be obtained for the conversion proposal to be passed.
Subsequent Procedures
- Once both A Shares and B Shares have been approved, the company may proceed to the next steps, including:
- Amending the Company Constitution
- Filing documents with the SSM (Companies Commission of Malaysia)
- Updating the Register of Members
Compliance Requirement
- It must also be ensured that the Company Constitution or Shareholders’ Agreement does not contain any provisions prohibiting such conversion, in order to ensure the process is legally compliant.