Reed Smith Client Alerts

Businesses around the world are facing unprecedented challenges brought about by the COVID-19 pandemic. For those conducting business in Hong Kong, regulations announced at short notice could make some of the routine financial reporting or corporate shareholder meetings difficult.
Hong Kong sunny day

This client alert deals specifically with the Prevention and Control of Disease (Prohibition on Group Gathering) Regulations (Cap 599G, Laws of Hong Kong) (the Regulations) which were enacted with effect from 29 March 2020 for three months. The Regulations prohibit group gatherings of more than four people in public places. Although the framework regulations have a three month validity, the immediate direction is that for a 14 day period i.e. up to and including 11 April 2020, subject to limited exceptions, no meetings of  more than four people will be allowed in public places.

If you are a Hong Kong listed company with a December financial year end and are planning your annual general meeting or any other shareholder meeting, this is relevant to you. By now, you will either have issued your audited financial statements or have announced your unaudited preliminary results with an indication of when your audited financial statements will be available. You will either be planning an AGM in the next three months or have to think about what to do about a shareholders’ meeting originally to take place on or before 11 April 2020. The 14 day period may also be extended or implemented from time to time during the next three months.

Breach of the Regulations without lawful authority or reasonable excuse, means that participants in such meetings can be fined HK$2,000 and if you organized such meetings, you could be liable for a HK$25,000 fine and imprisonment of 6 months.