THE Covid-19 pandemic and resulting lockdown have changed the way we conduct our daily activities.
Gathering or meeting in a big group is prohibited. It was not until the country entered the recovery movement control order (RMCO) on June 10 that the government relaxed the rules on gatherings and allowed management bodies of stratified properties to organise their AGMs, EGMs and management committee meetings, subject to strict adherence to the standard operating procedure prescribed by the Housing and Local Government Ministry.
Among others, the SOP restricts the duration of meetings to a maximum of four hours, provides that attendance of the general meeting is on a “first come, first served” basis if the venue cannot accommodate all the attendees, and stipulates that only important motions are to be discussed and decided upon in the meeting, and such decisions are to be recorded. Proprietors above the age of 60 are not encouraged to attend.
While the intention of the SOP is noble, to a certain extent, it curtails the rights of proprietors to participate in a meeting. For example, proprietors wishing to participate in a general meeting may find themselves being denied as the venue has reached its full capacity even before the meeting starts.
As the Covid-19 statistics in the Klang Valley worsened in the middle of October, the government tightened the rules and implemented the conditional movement control order (CMCO). Following this, all general meetings in strata schemes in the affected areas are prohibited once again.
However, as if oblivious to the danger of the increasing number of Covid-19 cases, the Housing Ministry in its latest FAQ dated October 15, still allows physical meetings of management committees, joint management committees and subsidiary management committees in strata schemes as per Item 16:
“Management committee meetings involving physical meeting are allowed on the conditions that they shall not exceed 10 persons in the meeting place, the committee members shall keep at least 1m apart from each other, and they shall take preventive measures against Covid-19. Nevertheless, it is encouraged to hold management committee meetings online during the CMCO period.”
It is important to note that many of the committees have members who are senior citizens, and cannot afford to contract Covid-19. Such meetings are held in a meeting room that usually does not have the sufficient space for effective social/physical distancing. Furthermore, the duration of such meetings is normally long, and in the unfortunate event that an infected person/carrier is present, the build-up of the virus over the long hours in the meeting room will definitely endanger the lives of the committee members, particularly those who are senior citizens.
During the CMCO, many such committees have no choice but to conduct their meetings online with a proper quorum, with the decision-making process being a simple majority vote, where the chairman will have a casting vote if there is an equality of votes. It will be good if the Housing Ministry can confirm that, for the avoidance of doubt, all decisions made and resolutions passed by the committees at such online meetings are valid and do not need to be ratified later in a physical meeting.
Is virtual meeting viable option?
The Singapore government recognised that allowing general meetings of management corporations to be held via alternative arrangements other than physical attendance will go a long way in mitigating the impact of Covid-19 lockdown.
Section 27 of the Singapore Covid-19 (Temporary Measures) Act 2020 allows meetings to be held or conducted in a manner other than provided for in the written law or legal instrument to limit or prevent the spread of Covid-19. Under this provision, the minister may by order prescribe an alternative arrangement for the meeting, include provisions for a meeting to be convened, held or conducted by electronic communication, videoconferencing, teleconferencing or other electronic means.
Pursuant to this provision, the Singapore government prescribed the Covid-19 (Temporary Measures) (Alternative Arrangements for Meetings for Management Corporations, Subsidiary Management Corporations and Collective Sale Committee) Order 2020 (“Singapore Order”). In order to facilitate the implementation of this order, the government devised guidance notes covering various aspects of virtual meetings, from the issuance of notice of a general meeting, quorum of meeting and appointment of proxy to the voting process.
Under this order, the notice of meeting will still need to be issued in accordance with the strata management law. In addition, the notice shall contain such information on how to use and access the relevant electronic system, and how proprietors can cast their votes in the course of a meeting.
The guidance note also provides that the management corporation should ensure that the electronic portal used will enable the secretary of the management corporation to identify and verify the identities of proprietors who “attend and participate” in the meeting conducted via the electronic portal.
Virtual meeting for publicly listed companies
In Malaysia, the Companies Act 2016 allows for its use for the conduct of general meetings.
The Securities Commission issued a guidance note for publicly listed companies on the conduct of fully virtual general meetings during the MCO period. The idea of virtual meetings has received encouraging response from various listed issuers.
For example, Telekom Malaysia Bhd conducted an online AGM that saw the participation of close to 350 shareholders. In this virtual AGM, 14 out of 15 ordinary resolutions and one special resolution tabled were duly approved by shareholders. This goes to show that if equipped with suitable facilities, virtual meetings are equally, if not more fruitful, compared to physical meetings.
Virtual meeting for strata scheme or ‘hybrid’ concept
Unlike the Companies Act 2016, the Strata Management Act 2013 does not contain any provisions that allow AGMs, EGMs or management committee meetings to be held electronically.
Section 59 of the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (Covid-19) Act 2020 (“COVID-19 Act”) provides that a minister charged with responsibility for any act of Parliament, may by order published in the gazette, provide for alternative arrangements for such a statutory meeting, which, in his opinion, is not possible to be convened, held or conducted in the manner provided for in such an act due to the pandemic from March 18 to June 9.
However, the benefit of this provision has been severely watered down as the laws were only gazetted on October 23, and by then, the applicable period of time for this provision had lapsed. By way of comparison, the Singapore order provides that alternative arrangements to conduct general meetings apply for the period from March 2020 until June 2021.
Nonetheless, the prime minister may exercise his power to extend the operation of the Covid-19 Act vide Section 2 of the same act. This power includes extending the period in which statutory meetings are not possible to be convened due to the pandemic.
In this regard, the housing and local government minister ought to look into the possibility of prescribing an order pursuant to Section 59 of the Covid-19 Act, to allow management bodies to convene general meetings and committee meetings either through a fully electronic method or a “hybrid” method.
A hybrid meeting simply means the meeting is conducted both physically and electronically at the same time: coexisting. Hybrid methods may be suitable in a situation where there are a number of proprietors who do not have the equipment or know-how to participate in a virtual meeting. Having a hybrid meeting will allow them to attend the meeting at the designated venue.
Minister’s prescribed order
The proposed prescribed order pursuant to the Covid-19 Act shall emphasise that the legal requirements to convene a general meeting pursuant to the Strata Management Act should still be complied with.
The order shall stipulate that the notice of a general meeting shall contain clear information on how proprietors can use and access the relevant electronic system/portal to attend the meeting, and how proprietors may cast their votes in the course of a meeting, such as providing a user ID and password for login.
The notice shall also inform proprietors of the areas to take note of, including a reminder that proprietors shall exercise all due care and diligence to ensure their login details are not disclosed to any other party, and to ensure that no other party is present at all times throughout the conduct of the meeting, and abide by the rules set for discussion or deliberation of each motion in the course of the meeting. Further, the notice shall provide an email address to which proprietors can submit their queries or questions, in relation to the motions tabled during the general meeting, which the chairman shall address.
Management bodies should ensure that the electronic portal used will enable the secretary to identify and verify the identities of legitimate proprietors who “attend and participate” in the meeting conducted via the portal. The chairman of the meeting shall also acknowledge the presence or attendance of these proprietors.
The quorum of a meeting should include proprietors and proxies who “attend and participate” in the meeting via the portal. Licensed and registered property management companies are trained to undertake such tasks, hence, management bodies should not brood.
Way forward
Having virtual meetings brings a host of benefits, and ideally, shall remain an option even after the pandemic has been controlled. Virtual meetings will encourage more people to take part in general meetings, as they are just a few clicks away.
However, it is important for management bodies to identify the suitable electronic platform or software that will enable a seamless meeting.
The National House Buyers’ Association is a voluntary non-government and not-for-profit organisation manned wholly by volunteers
