UK: EY report - annual reporting in 2014 by FTSE350 companies

EY has published a review of annual reporting by FTSE350 companies: see here (pdf). The report is wide-ranging. Focussing on one aspect of the UK governance framework - comply or explain - the report found that 59% of companies complied with every provision of the UK Corporate Governance Code; 85% complied with all or all but one provision. 3% of companies reported non-compliance with more than two provisions and whilst explanations for such non-compliance were provided, the report found that such explanations were of variable quality.

Zambia: new Companies Bill promised by the President

The President, Edgar Chagwa Lungu, opened a new session of the National Assembly earlier this month and delivered his presidential address: see here. New companies legislation is promised; to quote directly from the President: "a new Companies Bill will be presented to this House aimed at strengthening corporate governance and providing for the start-up and functioning of small companies".

UK: FRC consultation - audit framework - Ethical and Auditing Standards, UK Corporate Governance Code and Audit Committee Guidance Guidance

The Financial Reporting Council has published a consultation paper titled Enhancing Confidence in Audit in which it sets out proposed revisions to its ethical and auditing standards, UK Corporate Governance Code and Audit Committee Guidance: see here and here. The revisions being proposed to the Code, available here (pdf), relate principally to the competence of the audit committee and its members; they are being made to reflect changes in the EU statutory audit framework (in particular Article 39 of the revised Statutory Audit Directive 2006/43/EC).

Malaysia: securities law changes - an update

A short overview of the changes made to the securities law framework by the Capital Markets and Services (Amendment) Act 2015 and Securities Commission (Amendment) Act 2015, which came into force on 15 September 2015, has been published by the Securities Commission of Malaysia: see here.

UK: Scotland: Crown disclaimer and the effect of a court order for restoration to the register

The opinion of the Court of Session (Inner House) in ELB Securities Ltd v Love [2015] CSIH 67 was delivered earlier this month by Lady Paton (sitting with Lady Smith and Sheriff Principal Stephen QC). The case, which is now a leading authority, concerned the operation of section 1032 of the Companies Act 2006 and, in particular, its relationship with other sections within Chapter 3, Part 31, of the Act. Section 1032 sets out the general effect of an order for restoration to the register of companies: "the company is deemed to have continued in existence as if it had not been dissolved or struck off the register".

The case concerned a company that had been dissolved and struck off the register on 14 June 2013. On this date, under section 1012, the rights it had enjoyed under a lease vested in the Crown as bona vacantia but, on 15 July 2013, the Queen's and Lord Treasurer's Remembrancer - acting for the Crown - disclaimed the lease under section 1013. A few months later the company was restored to the register and at issue was the status of the earlier disclaimer: was the effect of the section 1032 order that the company retained an interest in the lease as if the disclaimer had not occurred?

Lady Paton stated that section 1032 "merely provides for the general approach ... but that general approach must give way to the specific and detailed provisions concerning the company's property as set out in section 1012 to 1014 and 1020 to 1022" (para. [26]). In her opinion, the company's rights in the lease ended on 15 July 2013 and, when the company was restored to the register, it no longer had any rights under the lease. To hold that the statutory scheme provided otherwise would, she said, lead to "uncertainty and confusion in the commercial world" (para. [28]).