Hong Kong: the recognition of foreign liquidations

Judgment was given last month in Provisional Liquidator of Global Brands Grpup Holding Ltd v Computershare Hong Kong Trustees Ltd [2022] HKCFI 1789. I note the decision here because - to my mind - it is now one of the leading Hong Kong authorities on the recognition of foreign liquidations.

Singapore: the oppression remedy - buy out orders, valuation and the discount for lack of marketability

Judgment was given earlier this month by the Court of Appeal in Kiri Industries Ltd v Senda International Capital Ltd and another and other appeals and other matters [2022] SGCA(I) 5. The decision is an important one because of the guidance it provides, when valuing shares that are the subject of a buy-out order under the oppression remedy (section 216 of Companies Act (Cap 50)), about the appropriateness of a discount to reflect the lack of control (DLOC) or the lack of marketability (DLOM). The court observed (para. [241], emphasis in the original): 

The approach to the application of a DLOM in the making of a buyout order under s 216(2) of the Companies Act has not been authoritatively determined by the courts in Singapore. The variety of cases which were cited tended to turn on their own facts or were distinguishable in one way or another without enunciating any general principle. In the view of this court, it is appropriate that courts making buyout orders and referring the question of valuation to an independent expert or experts should first determine whether it is appropriate to order a DLOC and/or a DLOM. The answers to those questions respond to a broader principle than the quantification of the discounts, which is properly within the sphere of the experts. This accords with the approach taken by the House of Lords in O’Neill v Phillips [1999] 1 WLR 1092, dealing with the valuation of shares subject to a buyout order under provisions of the Companies Act 1985 (c 6) (UK) that are analogous to s 216(2) of the Companies Act".

 

UK: The Statutory Auditors and Third Country Auditors (Amendment) Regulations 2022

The Statutory Auditors and Third Country Auditors (Amendment) Regulations 2022 was made earlier this month and come into force on July 27: see here or here (pdf). The accompanying explanatory memorandum is available here (pdf). The Regulations will, amongst other things, grant full adequacy - for an indefinite period - to the competent authorities of the United States (the PCAOB and SEC). 

UK: FRC position paper - the transition to the new regulator and other reforms

The Financial Reporting Council has today published a position paper in which it sets out the steps it will take, in support of the Government's recently announced proposals, to reform the UK's governance and audit framework, including its transition to the Audit, Reporting and Governance Authority: see here (pdf). 

The paper proposes, amongst other things, revisions to the UK Corporate Governance Code and the guidance that supports it on (a) board effectiveness, (b) audit committees and (c) risk management, internal control and related financial and business reporting. No revisions to the UK Stewardship Code are proposed because, towards the end of 2023, a review of the regulatory framework for effective stewardship, including the Code, is planned. This review will be undertaken by the FRC, FCA, Department for Work and Pensions and the Pensions Regulator.

UK: FRC publishes research exploring impact of the revised Stewardship Code

The Financial Reporting Council has today published commissioned research which set out to explore the impact of the revised UK Stewardship Code: see here (pdf). The research concludes that there has been a positive impact on the practice and reporting of asset managers and owners. For a short overview of the research findings, see here.