From Concern to Action: The Shareholder Requisition Path

wupeicong11
Aug 5
8 min read

An annual general meeting (“AGM”) is a mandatory yearly gathering of shareholders, where routine matters, such as the approval and adoption of financial statements, declaration of final dividends, and the re-election of directors, are addressed. Any general meeting that is not an AGM is referred to as an extraordinary general meeting (“EGM”), which is convened to deal with urgent or significant matters requiring shareholders’ attention and approval.

While general meetings are usually convened by the company’s directors, there may be situations where shareholders disagree with the company's management or strategic direction and seek to challenge the Board’s decisions. In such cases, shareholders who collectively hold a sufficient portion of the company’s shares may requisition a general meeting. This enables them to table specific resolutions - commonly relating to the removal or appointment of directors, or the termination of transactions they believe are not in the company’s best interest.

Section 176 vs Section 177

The common avenue for shareholders to requisition a general meeting are set out under Section 176 and 177 of the Companies Act 1967 of Singapore (the “Companies Act”):

	Section 176	Section 177
Minimum number of requisitionists	1	2
Shareholding of requisitionists	At least 10% of the total number of shares (excluding treasury shares) (“total shares”).	At least 10% of total shares.
Board’s involvement	Requires Board to convene general meeting as soon as practicable.	Directors are not involved in calling the meeting. Shareholders call the requisitioned meeting themselves.
Timeline	S176(1) – The Board immediately proceed to convene an EGM to be held as soon as practicable and not later than 2 months after company’s receipt of requisition. S176(3) – If the Board do not convene the EGM within 21 days after the deposit of requisition notice, requisitionists holding more than 50% of total shares may do so within 3 months of company’s receipt of requisition.	No specified requirement for requisitionists to give any notice to the Board or impose any timeline upon the Board.
Costs	Will be borne by or recoverable from the company.	Company is not obliged to cover costs incurred to convene EGM.
Procedures to be undertaken by requisitionists	Requisition notice must state the objects of the meeting, be signed by the requisitionists and be deposited at the company’s registered office.	Notice of the meeting must be served on every shareholder, not less than 14 days or such longer period as is provided in the company’s constitution. The onus is on the requisitionists to ensure that all applicable procedural requirements relating to the convening and conduct of the requisitioned meeting are adhered to.

An avenue that is rarely used: Under Section 183 of the Companies Act, shareholders holding less than 5% of total shares can submit resolutions for consideration at the forthcoming AGM. To do so, they must deposit a requisition notice at the company’s registered office at least 6 weeks before the AGM, together with a reasonable sum to cover the incremental costs to be incurred to give effect to the requisition.

Notes for requisitionists

Only members of the Company can issue requisition notice

A member is a person whose name is recorded in the company’s register of members or shareholders list. Shareholders who hold shares through custodian banks or nominees are not considered members as the name of the custodian banks or nominees (and not the names of the shareholders) would appear in the shareholders list. Requisition notice issued by these individual shareholders would be invalid.

Likewise, only members can vote in person or via proxy forms in general meetings.
Requirements on requisition notice

A requisition notice should include the names and shareholdings of the requisitionists and a description of the resolutions proposed to be tabled at the requisitioned meeting and be deposited at the registered office of the company. In all cases, requisitionists should not put forth any proposal or material that is clearly frivolous, vexatious or defamatory.
Quorum

If a quorum is not present within half an hour of the scheduled time for a ‘usual’ general meeting, the meeting would be adjourned to the same day, time and place of the following week or another day, time and place as determined by the directors.

In the same situation for a shareholder-requisition general meeting, the meeting would be dissolved.

Listed companies: Actions to take upon receiving a requisition notice

The SGX RegCo expects listed companies to inform shareholders via SGXNet immediately of requisition notices received. All actions shall be geared towards: (1) making prompt and factual disclosures regarding the receipt and details of any requisition notices; and (2) conducting the meeting properly and expeditiously.

Check validity of requisition notice

Verify the identity of the requisitionists and their shareholding percentages.
Engage legal counsels to review the requisition notice and check whether it complies with the Companies Act, the Constitution of the company and the SGX Listing Manual.
If the company disputes the validity of the notice, it should apply to the Court for a ruling within 21 days of receiving the notice.

Read relevant section(s) of the Constitution of the company

Read the Constitution of the company for clause(s) relating to requisition of general meetings and be prepared to comply with them. Example of such clauses are as follow:

“The Directors may whenever they think fit, and shall on requisition in accordance with the Statutes, proceed with proper expedition to convene an Extraordinary General Meeting.”
“Extraordinary General Meetings may be convened by such requisitionists, in accordance with the provisions of the Act. If, at any time, there are insufficient Directors within Singapore capable of forming a quorum, any remaining Director may convene an EGM in a manner as closely aligned as possible with how such meetings are ordinarily convened by the Board.”

Release SGXNET Announcement

In the meantime, the Board should issue a holding announcement via SGXNet to inform shareholders of the receipt of the requisition notice. This is to comply with Rule 703 (Disclosure of Material Information) of the SGX Listing Manual and aligns with SGX RegCo’s expectations. If the proposed resolution may potentially contravene any contractual obligations or materially affect the company’s operations or business, the Board should consider communicating these commercial risks to the requisitionists and disclosing them via SGXNet. Any subsequent material developments, including the filing of any court application, should also be announced promptly.

Initiate Dialogue

The Board is encouraged to engage in dialogue with the requisitionists to better understand their concerns and the rationale of requisitioning the general meeting. Taking a proactive and consultative approach to communicate directly and amicably may help resolve certain issues and accommodate some of the proposed suggestions, potentially avoiding the need to air grievances in the general meeting, a public platform, further harming the company’s image.

Extend Cooperation

In line with ‘Consultation Paper on Facilitating Shareholder-Requisition Meetings’ issued by SGX on 23 April 2024, the company should extend its cooperation to the requisitionists to enable them to comply with the procedural requirements associated with the requisitioned meeting. Such cooperation include:

Releasing SGXNet announcements and related attachments, such as notices of EGM, circulars and proxy forms, in a timely manner.
Sending the above related attachments to the shareholders.
Instructing the share registrar to provide the requisitionists with the shareholders list to facilitate the preparation of mailing labels to be used for sending the above related attachments to the shareholders.
Note: Shareholders list provided in a soft copy format (e.g. Excel or CSV) would enable quick and accurate printing of mailing labels.
Organising a venue for the EGM to be held, including securing the Board’s attendance.
Collating proxy forms submitted by shareholders.
Enabling the appointed scrutineer to discharge his/ her duties under Rule 730A of SGX Listing Rules.
Instructing the share registrar, company secretary, and other relevant agents to provide the necessary support, as they would for any general meeting, and to attend the requisitioned meeting.

Other Considerations: Removal of Directors

Among the various reasons shareholders requisition a general meeting, the removal of directors is by far the most common and consequential. Below are key considerations for both requisitioning shareholders and the Board of Directors when such a resolution is proposed:

Right of directors to attend EGM and be heard

Incumbent directors should not be barred from attending the EGM, as their absence may contravene the Constitution of the company and may render the proceedings procedurally flawed. Under Section 152(3) of the Companies Act, incumbent directors have the right to attend the EGM and be heard on any resolution relating to their removal. Denial of this right may invalidate the resolution.

Special notice to incumbent directors

While directors can be removed and appointed by way of ordinary resolutions, a special notice of the intention to move a resolution to remove a director must be given to the company at least 28 days before the meeting. The Company would then inform the concerned directors, who are entitled to make written representations of a reasonable length, to present his/ her case to the shareholders.
Managing conflict of interest

Directors who are the subject of the removal resolution should recuse themselves from:

- Deliberations or decision-making on matters relating to the requisitioned meeting.
- Providing advice or recommendations to shareholders on the proposed resolution.

This ensures that the board’s conduct remains impartial and avoids any perception of conflict of interest.
Post-removal Board Composition

Listed companies must ensure that board composition continues to comply with regulatory and governance standards following any changes:

SGX Listing Rules - Independent directors need to make up at least 1/3 of the re-constituted Board.

Code of Corporate Governance 2018 (the “Code”)

(Provision 2.2) If the chairman is not independent, majority of the directors need to be independent;
(Provision 2.3) Majority of the directors are non-executive directors; and
(Provision 10.2) The audit committee comprises at least 3 non-executive directors and majority of them (including the audit committee chairman) need to be independent.

Beyond meeting numerical thresholds, boards should also maintain an appropriate level of independence and diversity of thought and background in its composition to enable it to make decisions in the best interests of the company, in line with Principle 2 of the Code.

Appointment of Requisitionists’ Candidate as Director

Where shareholders propose a new director to replace an outgoing one, the Nominating Committee (“NC”) should:

Apply a rigorous and objective evaluation of the proposed candidate’s suitability.
Provide its recommendation to the board in a timely manner.

However, practical challenges may arise:

If the NC members themselves are subject to removal, their ability to assess the candidate may be compromised.
Time constraints and the Board's focus on the requisition may limit the effectiveness of the usual evaluation process.

In such cases, transparency and adherence to corporate governance principles remain critical.

Conclusion

Shareholders’ requisitions play a vital role in corporate governance, empowering members to call for a general meeting to raise and address specific concerns. When a Board receives such a requisition, it is crucial that it is not viewed as a personal challenge or an affront to its authority. Rather, it should be recognised as a legitimate mechanism for accountability—a call to action that reinforces the Board’s fiduciary duty to prioritise the interests of the company above individual considerations.

References

Singapore Exchange – Regulator’s Column: What boards and requisitionists should take note of in shareholder-requisitioned meetings (27 April 2023)

Singapore Exchange - Consultation Paper on Facilitating Shareholder-Requisitioned Meetings (23 April 2024)

Contributors (Cynthia Wu Siying and Christy Poon) and Singapore Academy of Law – Key Considerations when Advising on a Shareholder-requisitioned meeting to Reconstitute an SGX-Listed Board (20 September 2024)

Section 176 vs Section 177

The common avenue for shareholders to requisition a general meeting are set out under Section 176 and 177 of the Companies Act 1967 of Singapore (the “Companies Act”):

Minimum number of requisitionists

1

2

Shareholding of requisitionists

At least 10% of the total number of shares (excluding treasury shares) (“total shares”).

At least 10% of total shares.

Board’s involvement

Requires Board to convene general meeting as soon as practicable.

Directors are not involved in calling the meeting. Shareholders call the requisitioned meeting themselves.

Timeline

S176(1) – The Board immediately proceed to convene an EGM to be held as soon as practicable and not later than 2 months after company’s receipt of requisition.

S176(3) – If the Board do not convene the EGM within 21 days after the deposit of requisition notice, requisitionists holding more than 50% of total shares may do so within 3 months of company’s receipt of requisition.

No specified requirement for requisitionists to give any notice to the Board or impose any timeline upon the Board.

Costs

Will be borne by or recoverable from the company.

Company is not obliged to cover costs incurred to convene EGM.

Procedures to be undertaken by requisitionists

Requisition notice must state the objects of the meeting, be signed by the requisitionists and be deposited at the company’s registered office.

Notice of the meeting must be served on every shareholder, not less than 14 days or such longer period as is provided in the company’s constitution.

The onus is on the requisitionists to ensure that all applicable procedural requirements relating to the convening and conduct of the requisitioned meeting are adhered to.

Notes for requisitionists

Only members of the Company can issue requisition notice

Likewise, only members can vote in person or via proxy forms in general meetings.

Requirements on requisition notice

Quorum

If a quorum is not present within half an hour of the scheduled time for a ‘usual’ general meeting, the meeting would be adjourned to the same day, time and place of the following week or another day, time and place as determined by the directors.

In the same situation for a shareholder-requisition general meeting, the meeting would be dissolved.

Listed companies: Actions to take upon receiving a requisition notice

Check validity of requisition notice

Verify the identity of the requisitionists and their shareholding percentages.

Engage legal counsels to review the requisition notice and check whether it complies with the Companies Act, the Constitution of the company and the SGX Listing Manual.

If the company disputes the validity of the notice, it should apply to the Court for a ruling within 21 days of receiving the notice.

Read relevant section(s) of the Constitution of the company

Read the Constitution of the company for clause(s) relating to requisition of general meetings and be prepared to comply with them. Example of such clauses are as follow:

“The Directors may whenever they think fit, and shall on requisition in accordance with the Statutes, proceed with proper expedition to convene an Extraordinary General Meeting.”

Release SGXNET Announcement

Initiate Dialogue

Extend Cooperation

Releasing SGXNet announcements and related attachments, such as notices of EGM, circulars and proxy forms, in a timely manner.

Sending the above related attachments to the shareholders.

Instructing the share registrar to provide the requisitionists with the shareholders list to facilitate the preparation of mailing labels to be used for sending the above related attachments to the shareholders.

Note: Shareholders list provided in a soft copy format (e.g. Excel or CSV) would enable quick and accurate printing of mailing labels.

Organising a venue for the EGM to be held, including securing the Board’s attendance.

Collating proxy forms submitted by shareholders.

Enabling the appointed scrutineer to discharge his/ her duties under Rule 730A of SGX Listing Rules.

Instructing the share registrar, company secretary, and other relevant agents to provide the necessary support, as they would for any general meeting, and to attend the requisitioned meeting.

Other Considerations: Removal of Directors

Among the various reasons shareholders requisition a general meeting, the removal of directors is by far the most common and consequential. Below are key considerations for both requisitioning shareholders and the Board of Directors when such a resolution is proposed:

Right of directors to attend EGM and be heard

Special notice to incumbent directors

Managing conflict of interest

Directors who are the subject of the removal resolution should recuse themselves from:

- Deliberations or decision-making on matters relating to the requisitioned meeting.

- Providing advice or recommendations to shareholders on the proposed resolution.

This ensures that the board’s conduct remains impartial and avoids any perception of conflict of interest.

Post-removal Board Composition

Listed companies must ensure that board composition continues to comply with regulatory and governance standards following any changes:

SGX Listing Rules - Independent directors need to make up at least 1/3 of the re-constituted Board.

Code of Corporate Governance 2018 (the “Code”)

(Provision 2.2) If the chairman is not independent, majority of the directors need to be independent;

(Provision 2.3) Majority of the directors are non-executive directors; and

(Provision 10.2) The audit committee comprises at least 3 non-executive directors and majority of them (including the audit committee chairman) need to be independent.

Beyond meeting numerical thresholds, boards should also maintain an appropriate level of independence and diversity of thought and background in its composition to enable it to make decisions in the best interests of the company, in line with Principle 2 of the Code.

Appointment of Requisitionists’ Candidate as Director

Where shareholders propose a new director to replace an outgoing one, the Nominating Committee (“NC”) should:

Apply a rigorous and objective evaluation of the proposed candidate’s suitability.

Provide its recommendation to the board in a timely manner.

However, practical challenges may arise:

If the NC members themselves are subject to removal, their ability to assess the candidate may be compromised.

Time constraints and the Board's focus on the requisition may limit the effectiveness of the usual evaluation process.

In such cases, transparency and adherence to corporate governance principles remain critical.

Conclusion

References

Singapore Exchange – Regulator’s Column: What boards and requisitionists should take note of in shareholder-requisitioned meetings (27 April 2023)

Singapore Exchange - Consultation Paper on Facilitating Shareholder-Requisitioned Meetings (23 April 2024)

Contributors (Cynthia Wu Siying and Christy Poon) and Singapore Academy of Law – Key Considerations when Advising on a Shareholder-requisitioned meeting to Reconstitute an SGX-Listed Board (20 September 2024)