Covid-19 coronavirus: new rules regarding electronic meetings of Thai companies
22 April 2020
In light of the Covid-19 coronavirus situation and broad social distancing measures, the Thai government brought the Emergency Decree Re: Electronic Meetings B.E. 2563 (2020) (the Emergency Decree) into force on 19 April 2020 to assist companies in electronically convening meetings of directors and shareholders. In summary, the new rules provide that notices to convene a board of directors or shareholder meeting may be sent by e-mail; it is no longer necessary for a physical board of directors and/or shareholder meeting to take place; and it is not necessary for participants joining a meeting electronically to be physically located in Thailand.
If you are interested to know more about how the Emergency Degree applies to your business please contact your usual A&O contact or the Key Contacts listed on this article.
As you may be aware, previously an electronic meeting of directors of shareholders of a Thai company would require a physical meeting of people constituting at least one third of the relevant quorum, and that any people joining a meeting electronically would have to be physically located in Thailand when they did so. This has made it impractical for Thai companies to hold an electronic meeting, especially where any participants are from overseas. However, on 19 April 2020, the Emergency Decree has become effective. The Emergency Decree was issued with an aim to facilitate companies affected by the Covid-19 pandemic in holding the meetings of the board of directors and/or shareholders via electronic media by removing some of the burdensome requirements.
- The Emergency Decree became effective on 19 April 2020.
- The wordings in the Emergency Decree are not entirely clear whether it applies to the shareholders’ meeting of Thai companies. However, based on the remarks at the end of the Emergency Decree, our interpretation is that this will be applicable to shareholders’ meeting of both private and public companies.
- Pursuant to the Emergency Decree, the Notification of the National Council for Peace and Order Number 74/2557 (2014) Re: Electronic Conference (the Notification) was revoked. Accordingly, the following criteria relating to electronic meeting is no longer applicable:
- at least one third of the quorum of the electronic meeting must physically attend the meeting in person at the same meeting venue; and
- all meeting participants in the electronic meeting (whether attending in person or participating via electronic media) must be physically present in Thailand at the time of the meeting.
- In case of a shareholder’ meeting, a proxy holder may also attend the meeting electronically, provided that the executed proxy form has been provided to the chairman of the meeting.
- Although the Notifiation was revoked, certain requirements relating to security measures of the electronic meeting provided in the Notification will continue to apply until a replacement notification is formally announced, provided that such requirements do not contradict with the Emergency Decree. As a result, security measures of the electronic meeting held under the Emergency Decree must still comply with the relevant notifications and orders as previously required under the Notification, including the Notification of the Ministry of Communication and Information Technology Re: Security Policy and Standards of the Meeting via Electronic Media B.E. 2557 (2014)
Therefore, there are still formalities which should be observed by directors and secretary teams responsible for the conduct of the meetings. For example the person responsible for arranging the meeting (eg the board of directors):
- must have remote access to control the meeting to inspect and solve any problems that may occur during the meeting;
- must be able to cut the audio and/or visual or the transmission of information of each participant at any moment of the meeting when needed; and
- must arrange so that all participants are able to express or exchange their opinion via electronic media throughout the meeting period.
- The Emergency Decree also specifies that the notice to convene the meeting may be sent to participants via electronic mail.
However, it is still unclear whether or not the provision of this Emergency Decree which allows the electronic delivery of notice of the meeting will overrule the legal requirements in respect of physical delivery of notice under the Thai Commercial and Civil Code and the Public Limited Company Act, B.E. 2535 (1992), as amended, and/or other requirements in that respect which may by imposed by the articles of the companies. It remains to be seen how this issue will be further interpreted by the relevant regulators.
- The person responsible for arranging the electronic meeting (eg the board of directors) must:
- arrange for the participants to be able to identify themselves through such electronic media before the start of the meeting;
- arrange for the participants to be able to cast their votes (either openly or anonymously);
- arrange for written minutes to be properly taken;
- keep a copy of the notice and related documents as evidence, which may be stored electronically;
- arrange for the recording with audio and/or visual records (as the case may be) of all participants throughout the meeting and treat such records as part of the minutes; and
- ensure that the computer traffic data (including, for example, data related to computer systemsbased communication that shows the sources of origin, destinations, routes, time, date, volumes, etc.) of all participants is stored as evidence and such data must be treated as part of the minutes.