Conflicts of Interest – Directors of PLCs Who Sit on Boards of Institutional Investors that Invest in the Directors’ PLCs

The concept of ‘conflict of interest’ is premised on one of the limbs of natural justice…’no man shall sit in judgment of his own course’ (Nemo judex in causa sua in Latin).

When it comes to ‘conflict of interest’, it is equally important to avoid both actual and perceived ‘conflict of interests’. This is because perception shapes reality and sometimes, that very perception becomes the reality.

It is a conflict of interest when directors of Public Listed Companies (PLCs) sit on boards (or committees) of institutional investors, who in turn have shareholdings in the said PLC, from which that director comes from.

It does not matter whether that director can influence the institutional investors’ dealings decisions when it comes to the said PLC’s shares…it is the perception that matters. Of course, that director can abstain from the institutional investors’ deliberations when discussions are held pertaining to that PLC.

But surely, it is much better to completely avoid ‘conflicts of interest’, whether real or perceived, by not accepting any board positions in institutional investors who have interests in their PLC.

Where a director of a PLC sits on the board of an institutional investor, and the institutional investor in turn deals in the shares of the said PLC, minority shareholders are often left wondering whether the share price of the PLC is due to actual market forces, (price discovery), or due to the investment/divestment decisions of the institutional investor. Such wonderings are especially pronounced if that PLC enjoys richer valuations, e.g. higher PE ratios, compared to the PLC’s competitors.

Will there be no conflict of interest if the institutional investor does not invest in the shares of the said director’s PLC? To some extent perhaps, but not completely. The said director may influence his competitors share prices through the institutional investor’s share dealing decisions.

It is better for directors of PLCs to completely avoid sitting on the boards (and committees) of institutional investors so that there is no conflict of interest – whether real or perceived.

It is especially crucial for a director to avoid such directorships at institutional investors where the institutional investor also holds shares in the director’s PLC. In such instances, the conflict of interest becomes so much more obvious and real and breaches the fundamentals of natural justice…nemo judex in causa sua absolutely.

The announcement on the 10th Sep >>>>

1. Details of corporate proposal
Whether the corporate proposal involves the issuance of new type and new class
of securities? N
Types of corporate proposal : ESOS
Details of corporate proposal : Employees' Stock Option Scheme
No. of shares issued under this corporate proposal : 542,600
Issue price per share ($$) : 1.5400
Par Value ($$) (if applicable) : 0.000
Latest issued share capital after the above corporate proposal
In the following
Units : 8,128,619,774
Issued Share Capital ($$) : Malaysian Ringgit (MYR) 1,679,850,644.400
Listing Date : 10/09/2020

2. Details of corporate proposal
Whether the corporate proposal involves the issuance of new type and new class
of securities? N
Types of corporate proposal : ESOS
Details of corporate proposal : Employees' Stock Option Scheme
No. of shares issued under this corporate proposal : 1,767,100
Issue price per share ($$) : 1.5700
Par Value ($$) (if applicable) : 0.000
Latest issued share capital after the above corporate proposal
In the following
Units : 8,130,386,874
Issued Share Capital ($$) : Malaysian Ringgit (MYR) 1,682,801,701.400
Listing Date : 10/09/2020

3. Details of corporate proposal
Whether the corporate proposal involves the issuance of new type and new class
of securities? N
Types of corporate proposal : ESOS
Details of corporate proposal : Employees' Stock Option Scheme
No. of shares issued under this corporate proposal : 1,829,700
Issue price per share ($$) : 1.6300
Par Value ($$) (if applicable) : 0.000
Latest issued share capital after the above corporate proposal
In the following
Units : 8,132,216,574
Issued Share Capital ($$) : Malaysian Ringgit (MYR) 1,685,967,082.400
Listing Date : 10/09/2020

4. Details of corporate proposal
Whether the corporate proposal involves the issuance of new type and new class
of securities? N
Types of corporate proposal : ESOS
Details of corporate proposal : Employees' Stock Option Scheme
No. of shares issued under this corporate proposal : 419,600
Issue price per share ($$) : 1.6900
Par Value ($$) (if applicable) : 0.000
Latest issued share capital after the above corporate proposal
In the following
Units : 8,132,636,174
Issued Share Capital ($$) : Malaysian Ringgit (MYR) 1,686,718,166.400
Listing Date : 10/09/2020

5. Details of corporate proposal
Whether the corporate proposal involves the issuance of new type and new class
of securities? N
Types of corporate proposal : ESOS
Details of corporate proposal : Employees' Stock Option Scheme
No. of shares issued under this corporate proposal : 677,700
Issue price per share ($$) : 3.3000
Par Value ($$) (if applicable) : 0.000
Latest issued share capital after the above corporate proposal
In the following
Units : 8,133,313,874
Issued Share Capital ($$) : Malaysian Ringgit (MYR) 1,689,157,886.400
Listing Date : 10/09/2020

6. Details of corporate proposal
Whether the corporate proposal involves the issuance of new type and new class
of securities? N
Types of corporate proposal : ESOS
Details of corporate proposal : Employees' Stock Option Scheme
No. of shares issued under this corporate proposal : 900
Issue price per share ($$) : 4.2500
Par Value ($$) (if applicable) : 0.000
Latest issued share capital after the above corporate proposal
In the following
Units : 8,133,314,774
Issued Share Capital ($$) : Malaysian Ringgit (MYR) 1,689,151,044.800
Listing Date : 10/09/2020
Remarks:

>>>> the 2nd and the 3rd ESOS listing was rather huge, yes? ....