Market-watchers say a number of firms may need to focus instead on conserving cash under current economic landscape
Our Partner, Yang Eu Jin with assistance from Partner, Chew Kok Liang of our Corporate and Capital Markets Practice highlighted that when looking at final dividends payout, shareholders will have to bear in mind that even though it is recommended by the board, there is no legal obligation on the part of the company to pay dividends until they are declared and approved in a general meeting. He further adds that the best practices for companies in need of cash are to inform shareholders if the proposed dividends have been withdrawn due to cash flow reasons arising from COVID-19 instead of waiting for the AGMs to take place.
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The article was first published in The Business Times on 27 April 2020.
Source: The Business Times, 27 April 2020