Committee passes companies bill in under 10 minutes

The Parliament’s Economic Committee passed a government bill to amend the Companies Act to shorten the notice period for Extraordinary General Assembly (EGMs) of companies in under 10 minutes on Monday, after deciding that the legislature requires no further review.

The bill, sponsored by Feydhoo MP Ismail Nizar, was accepted into the Parliament after a preliminary vote with a unanimous vote of 77 lawmakers in an extraordinary sitting held on Monday morning. It was subsequently sent to the Economic Committee for review.

The committee quickly convened for a meeting at 11:30 am, and approved the bill with a majority vote of 8-1. The meeting wrapped up in under 10 minutes.

During the earlier debate, lawmakers from the main opposition Maldivian Democratic Party (MDP) had expressed concern over a provision in the bill which allows companies to increase the number of board directors. Vaikaradhoo MP Hussain Ziyad alleged it is designed to increase political appointments.

ރައްޔިތުންގެ މަޖިލީހުގެ އިޤްތިޞާދީ ކޮމިޓީއިން، ޤާނޫނު ނަންބަރު 7/2023 (ކުންފުނީގެ ޤާނޫނު) އަށް އިޞްލާޙު ގެނައުމުގެ ބިލު ދިރާސާކުރުން pic.twitter.com/kZydxakF1g

— People's Majlis (@mvpeoplesmajlis) September 16, 2024

Kendhoo MP Mauroof Zakir said that the bill provides no remedy to the issues facing companies.

However, they had voted in favor of the bill despite the reservations.

The Companies Act currently stipulates that the minimum number of board members in state-owned enterprises will be set by law or a law or presidential decree regarding the formation of such an enterprise.

The new amendment states that the minimum number of board members can also be set in the company’s regulations.

The bill also shortens certain time frames.

It states that if the number of board directors in public and private companies falls below the minimum requirement, new directors must be appointed within 10 days instead of 30.

The bill also stipulates that companies must issue notice for Annual General Meetings (AGMs) within three days of receiving written requests for such meetings, and hold the meeting within 10 days.

The law currently stipulates that companies must issue notice for AGMs within 21 days of receiving written requests for such meetings, and hold the meeting within three months.

The new bill also stipulates that companies must issue a seven-day notice for Extraordinary General Meetings (EGMs) instead of 14 days.

The bill comes with the Bank of Maldives (BML) set to hold an EGM on September 21 at the instructions of the Finance Ministry to approve changes to its board.

During Monday’s debate, Deputy Speaker Ahmed Nazim, a top lawmaker from the main ruling People’s National Congress (PNC) who represents the Dhiggaru constituency, highlighted on BML’s CEO Karl Stumke’s resignation on September 8, ahead of the EGM.

“An EGM needs to be held quickly to appoint a new CEO. Therefore, we need to shorten the process for EGMs. With this revision, we can hold another EGM soon after the one scheduled for September 21,” he said.

Nazim said the changes will benefit not just BML, but also other companies, including the State Trading Organization (STO), which has initiated the process of taking over Fenaka Corporation.

He said that the companies will need to hold EGMs during the process.